The opportunities in the energy transition include a vast potential for clean hydrogen produced with renewable energy or from fossil fuels with carbon capture. The expected uses range from the substitution of traditional fuels in hard-to-abate industries like steel, transportation such as trucks and buses, energy storage for seasonal variation in the electricity grid, to clean power generation. However, nowadays, practical examples of this vision are scarce. Projects in the construction phase and ready for financing opportunities are only just emerging. Currently, private investors view clean hydrogen as a risky sector and have concerns about profitability. The client, Crédit Agricole Corporate and Investment Bank (CACIB), is aiming to be a leader in financing the energy transition and looking for early opportunities to invest.
This Capstone project captured the best approach to understanding the current and next steps of undertaking investments in hydrogen for an accelerated disruption. The project involved modeling the levelized cost of green hydrogen to examine its cost drivers and assessing cost gaps. Based on evaluations of regional and policy factors such as geographical considerations, political priorities, regulations, and market incentives, the team identified and analyzed the most advanced markets/countries: USA, Chile, Spain, Australia, Japan, and Saudi Arabia. They are likely to present early-stage and/or high-volume investment opportunities. This examination works as a toolkit for CACIB and other key private actors to assess opportunities, risks, and mitigants as they explore hydrogen-related infrastructure investments and also serves as the basis for other countries and policy-makers developing a hydrogen roadmap.