Is Hydrogen the Backbone of the Decarbonization Revolution?By Jeroen Visser | Tue, 09/14/2021 - 15:06
Now is the time to act, the time to change. The decarbonization of human activity starts today.
Evidence suggests that the effects of climate change are already impacting Mexico. On Aug. 11, 2021, CONAGUA (Mexico’s National Water Commission) said in the Federal Official Gazette that a severe drought was affecting almost 87 percent of the Mexican territory, with some states having seen their worst drought in 30 years. The effects of climate change are particularly important for Mexico, where the average temperature increase is one of the steepest around the globe. This will have consequences not only on the climate itself (less rain and more droughts) but on economic activities as well.
The decarbonization effort, as with all industrial revolutions, must be driven by the private sector. Governments and environmental policies are not enough to change the global economy at the pace needed to reach Net Zero by 2050. A combined effort is needed, as well as a mix of different technologies, to decarbonize all human activities as fast as possible, and not only within the power generation sector. The only way to cope with decarbonization in hard-to-abate sectors is a mix of green hydrogen, its derivatives and renewable electricity.
More and more companies are initiating and following new and stronger ESG trends that demand structural changes from industries around the globe. In the next few years, the use of green hydrogen will play a major role in effectively strengthening the sustainability performance (therefore the financial performance too) and profile of every public company and operation.
As mentioned, hydrogen is a complement to an energy mix that includes electricity based on wind and solar power, and, until the transition is complete, natural gas. A successful energy strategy and management of this mix is critical to achieving sustainability goals with confidence and maintaining competitiveness in the sector itself. Northland Power Inc. (NPI) recognizes this global reality, along with the specific constraints and challenges that companies face.
In Mexico, one of the challenges is to guarantee that 100 percent renewable energy is used to power hydrogen production, due to the regulation that rules the electricity market, which has both capacity and energy as its main products. A greater challenge is guaranteeing compliance with the regulatory framework while guaranteeing a firm power supply and keeping power prices competitive. NPI has overcome the power supply challenge through the deployment of a comprehensive strategy that takes advantage of NPI’s company deployment in Mexico. Having companies along the power production value chain, NPI is able to deliver an integral solution. Moreover, NPI’s experience in Mexico allows us to offer creative and innovative power supply solutions and share the savings that these strategies can create with our commercial partners while implementing solutions to meet their decarbonization objectives.
NPI is committed to Mexico. Through its strategic choice to incorporate green hydrogen in the renewable energy mix, and together with companies active across the Mexican industrial value chains, it is tackling the decarbonization challenge. NPI has launched an ambitious initiative to realize the local and on-site production of green hydrogen for the benefit of those companies that are already starting the journey toward decarbonization of their operations. NPI intends to establish an integrated green hydrogen value system in Mexico, from production and logistics to use applications.
NPI’s green hydrogen initiative will help the participating companies to gain invaluable experience and knowledge about future, broader implementation of green hydrogen. The global challenge is clear: stricter international policies and regulations being formulated and implemented to reach Net Zero by mid-century will demand the deployment of 100 percent clean energy and feedstock.