Goldman Sachs Says ‘Hydrogen Generation’ Can Be A Trillion Dollar Market

Goldman Sachs – major banker and think tank – says that hydrogen has a key role to play in the transition to net-zero carbon emission scenario and that hydrogen production has the potential to create a niche market worth more than $1 trillion every year.

In a recent media interaction, Goldman Sachs’ commodity equity business segment head of the EMEA region, Michele DellaVigna, said that if the world wants to achieve the net zero carbon system, it can’t be done through renewable energy alone and Hydrogen can replace the natural gas to manage seasonality and intermittency.

He echoed a recent report by the bank that was published in early February which predicted that by 2050 the hydrogen generation could be a global market of more than $1 trillion. Today, the market size hovers around $125 billion. DellaVigna co-authored this research report. He also opined that stock investors should look for taking advantage of the clean energy’s projected growth and there are two good ways to invest in hydrogen.

Investors can invest in electrolyzer companies that create pure hydrogen or invest through conglomerates like gas companies, energy service companies and oil & gas companies that have hydrogen as a part of their running businesses.

He based his projections about the hydrogen market on the diverse range of applications of the fuel which can be used in a wide range of industries – heavy transport, heating and heavy industries.

He also emphasized on the green generation systems for hydrogen to realise a net-zero carbon world. Production of hydrogen without carbon dioxide emission is the key. One of the best methods to produce green hydrogen is electrolysis where electric current splits water into oxygen and hydrogen elements. But the electricity used in the process must come from renewable sources like wind or solar to make the entire process ‘clean.’

Blue hydrogen produced employing natural gas which has CO2 emissions. This carbon has to be captured and sequestered. DellaVigna says, “Whether we do it with electrolysis or we do it with carbon capture, we need to generate hydrogen in a clean way.”

He believes that these solutions can pave the way for hydrogen to capture global markets by at least 15 per cent that will be more than $1 trillion per annum in days to come. He also says that hydrogen can replace natural gas in the near future.