Seizing the Hydrogen Opportunity: A Future-Ready Organization to win in the Hydrogen Market

Authors: Sven Kossack, Matthias Kruehler, Erik Rakhou.

As the horizon of 2030 approaches, clean hydrogen and Hydrogen derived fuels are poised to emerge as a significant market. These fuels will play a pivotal role in satisfying energy and feedstock demands across regional demand centers like Japan, Korea, Europe, US, India, China and beyond.

Achieving success – developing sufficient large-scale projects in this dynamic landscape hinges on a new organizational set-up, one that adeptly navigates four (4) crucial success factors:

1. Customer Engagement: Establishing robust and lasting customer relationships, thereby securing long-term demand.

2. Value Chain Mastery: Expertly navigating both global and regional value chains to ensure streamlined and efficient operations.

3. Strategic Project Development : Gaining access to strategic production positions that are economically advantageous (via low LCOE for renewables or good connections to pipelines and/or ports) across the globe.

4. Policy Adherence and Advocacy: Ensuring alignment with local and global policies and regulations while advocating for the integration of hydrogen in future energy landscapes.

A future proof hydrogen organization therefore needs to bridge the gap between local production and global markets, between local consumers and global regulations.

A critical decision looms: Can existing organizational structures be leveraged, or should a fresh unit be incubated to address these requirements?

Experiences offer insights into optimal operational models.

In our experience, mature hydrogen organizations in leading corporations house business units ranging from 10 to over 100 full-time employees. Early-stage development of hydrogen projects typically spans 2-3 years and necessitates up to 20 FTEs, with a team that is able to drive project to FID, and execute post-FID.

Alternatively, the option to acquire and integrate hydrogen developers is a viable shortcut. In the nascent phases, such an entity would be entrusted with managing stakeholder relations, local market developments, and on-the-ground progress, all while maintaining agility and adaptability embedded in the global context of the buyer.

So, what does the initial operational blueprint entail for the first 2-3 years?

Unlocking the full spectrum of value chain opportunities necessitates the establishment of a dedicated business unit or entity with a strong local presence in both source and target markets. This entity must possess a comprehensive skill set with at least 5 following features:

• Technical Expertise: To evaluate, develop, and operate hydrogen and power-to-X facilities, along with creating access to renewable energy sources. This includes ability to directly, or via partnerships and venturing to be monitoring latest technological innovation and development in Hydrogen space.
• Commercial and Business Development Acumen: To identify and secure hydrogen consumers in target markets, explore new ventures, and foster partnerships. Partnerships must include attention to managing diversified supply chains.
• Government and Policy Affairs: To engage with regulators and stakeholders in target and source markets.
• Legal Support: To facilitate permitting, contracts, and other legal aspects, all while harmonizing with commercial goals.
• Central Organizational Support: to support financial and (internal) stakeholder alignment, as well as having access to a strong recruitment and training support. The recruitment and training support is key to develop a recruitment strategy which may include upskilling existing or new personnel given novelty of the business side of Hydrogen markets, and rapidly, at scale developing technologies.

What about leadership?

At the helm of this venture, leadership is pivotal. Needed are leaders that can deal with ambiguity of uncertain markets, equipped with techno-commercial prowess able to grasp hydrogen technologies value for organization and oversee large scale projects build-up, adept at innovative dealmaking, capable of navigating the intricate policy landscape, and able to source funding and investment capital.

What's next?

The emergence of the hydrogen economy calls for visionary leadership, strategic innovation, and a dynamic organizational structure that can steer through uncharted waters, securing a place at the forefront of the green energy revolution.

In particular, at this stage of Hydrogen market we need leaders and their teams to excel both in complex projectmanagement to/post-FID, and able to organise the needed ingredients of success such as timely securing access to supply chains.

What are your views? Share with us.