At least two dozen U.S. energy firms, including Dominion Energy Inc (D.N) and Sempra Energy (SRE.N), have started producing hydrogen or testing its viability in natural gas pipes to take advantage of existing infrastructure as the world prioritizes lower-carbon fuels. Nations worldwide are trying to reach net-zero carbon emissions by 2050, but that will rely heavily on technology – like hydrogen – that is in developmental stages. Utilities have a potential advantage if they find that clean-burning hydrogen can be successfully transported in existing gas pipes and power plants.
But governments need legislation and regulation to encourage energy companies to spend billions in order to reduce production costs for green hydrogen, analysts said, before it can displace fossil fuels. Almost all of the world’s hydrogen production is currently through fossil fuels, and large utilities are currently mostly testing blends of natural gas and hydrogen in their pipelines.
The companies experimenting with hydrogen are in early stages. Canada’s Enbridge Inc (ENB.TO) is blending up to 2% hydrogen into its natural gas distribution systems in Ontario, and just received approval to blend hydrogen in Quebec.