Opportunities in the Digitalization of the Hydrogen Industry

Hydrogen is an indispensable element of the journey to the energy transition. At the same time, it has the reputation of being the “champagne of energy sources” because its production requires large amounts of energy. The determined digitalization of the hydrogen industry involving current energy providers could soon make this problem a thing of the past.

Technological and political developments have given a massive boost to hydrogen (H2) as an energy source. Viewed in the setting of the energy transition, hydrogen will offer a viable alternative source of energy for an increasing number of use cases during the next decade. The German Energy Agency DENA, for example, expects demand for hydrogen to increase eightfold within the next ten years. The State of Baden-Württemberg projects annual revenues of the German hydrogen industry that could equal the combined annual revenues of EnBW, RWE, and Vattenfall as early as 2030.

Energy providers will have an essential role as players during this development. In addition to providing renewable electricity from wind farms, hydroelectric plants, biomass facilities, and solar power plants for the CO2-free generation of green hydrogen, they must utilize intelligent grid planning in active support of the conversion of industrial processes. Additional business fields are being created through the use of current resources. For example, the BDEW [German Association of Energy and Water Industries] estimates that around two-thirds of the current natural gas (storage) network (especially in “underground cavern storage facilities”) can also be used for the hydrogen industry. Research, development, and knowledge resources of power generators, particularly with respect to low-carbon gases, also serve as a foundation for the sustainable transition to H2.

These numerous opportunities, however, are also contrasted with manifold challenges, raising in particular questions such as these:

  • What are the visions, goals, strategies, and end-to-end (E2E) processes in the business field hydrogen?
  • How will hydrogen be integrated into the present ecosystem of energy providers, and what strategic partners will be required? How will synergies be leveraged?
  • What scalable resources are needed to integrate hydrogen projects into the current IT infrastructure?
  • What innovative IT solutions are available for optimizing and automating processes in the hydrogen sector?
  • Which changes in terms of organization and processes must be realized within the framework of change management? How can these projects be conducted efficiently and effectively?

The consideration of these and other issues opens the door to the novel opportunity to think digitally about the development of the infrastructure of an innovative energy carrier from the very beginning.

On the one hand, a digital infrastructure that is scalable to hydrogen demands efficient realization of the transformation process. On the other hand, smart technologies already offer a wide range of application fields that can be embedded in hydrogen programs at low cost. Holistic solutions for complex problems become possible when hardware and software components designed with the issues in mind are used. With respect to the infrastructure, a key crossover task will be the establishment of a concept that integrates data from various areas and initiatives into a single pool. The data pool is crucial, especially for the monetization of data from hydrogen projects. For one, more efficient knowledge management and the resultant acceleration of the learning curve effects become possible; for another, hydrogen projects are unique in that they cannot be realized unless the approach that is taken cuts across various technologies. The integration of external and internal hydrogen and electricity data is the foundation for practical planning, control, and evaluation of loads and demand, provided that suitable tools support targeted data analysis.

Once this core issue has been secured, state-of-the-art, cutting-edge technologies can be used to design processes at low cost with the aid of E2E process management, automation, etc. Classic application areas of trending topics include the use of AI for load forecasting, green hydrogen certificates via blockchain, trading and dashboarding of hydrogen activities on platforms, and the utilization of smart IoT sensor technology. All in all, the use of AIoT solutions (solutions based on artificial intelligence on the Internet of Things) could reduce the capex and opex of green hydrogen by as much as 25 percent in the future. There will no longer be any talk of champagne.

Digital technology supports the integration of hydrogen into the current project and product landscape.

Learn more about this subject in our hydrogen portfolio for the energy sector (German only).