The energy industry is on a journey to net zero, and COVID-19 has accelerated the transition towards renewables
globally. The use of hydrogen as an alternative to fossil fuels is growing rapidly and is expected to play a major
part in the energy transition - a market that BloombergNEF estimates could be worth as much as USD 700 billion
by 2050.
Hydrogen has the highest amount of energy per unit weight of any substance (120-141MJ/kg compared to
44MJ/kg of gasoline), but its lower density brings complications with unit energy transportation costs.
The good news is that hydrogen production technology forms an integral part of many of today’s established
processes (including refining, reforming and gasification) so it is not a new alternative. The challenge is that
upscaling and mass deployment will present significant challenges to the sector. The magnitude size increase in
electrolysis capabilities and challenges to storage also adding complexity.
To grasp this opportunity, it is vital that the energy industry both understands and articulates the risk transfer
challenges that are experienced throughout the lifecycle of hydrogen. By doing so projects can proceed to be
executed lowering companies carbon footprint and at the same time improving their ESG credentials.
“The world is transforming at an unprecedented pace. At Zurich we believe we can have
a positive impact in our role as an insurer and in society. Zurich’s aim is to help
customers transition from carbon-intensive industries. We see the emergence of
Hydrogen as a clear example where there is a need for innovative product offerings to
support the de-risking of projects and provide additional balance sheet protection to
clients.”
Frank Streidl, Head of Energy, Marine & Construction, Zurich Insurance PLC.
Hydrogen production is categorised into three main types; hydrogen captured from fossil fuels but which
generates CO2 (grey hydrogen), hydrogen generated from fossil fuels but which captures and stores the CO2
emitted (blue hydrogen) and hydrogen generated from electrolysis using green electricity (green hydrogen).
Hydrogen’s application is broad, from fueling transport, powering heavy industry and providing the heating in our
homes. Through continued investment in infrastructure hydrogen has the capacity to provide a green energy
solution for the future.
Under the banner of the Aon Energy Transition Group, Aon has brought together a highly technical team to offer
market-leading services for clients in the hydrogen value chain. Our focus is on supporting companies as they
navigate the complexities of the energy transition, with a team of cross-class specialists that is helping clients
manage and outperform in the evolving landscape through the following areas;
- Generating new and sustainable insurer capacity for the hydrogen value chain
- Product innovation and wording development, offering client solutions to enable projects and the energy transition
- Scaling up our global resources in combination with a risk-based approach
Aon views insurance as an enabler, to build confidence and provide the catalyst for new projects and developments.
Contact
To discuss any of the topics raised in this article, please contact
Euan Nicolson or
James Stretton or
Rob Colver.
Euan Nicolson
Chief Commercial Officer Global Energy
London
Rob Colver
Energy Risk Engineer
London
James Stretton
Chief Commercial Officer Global Energy
London