Q&A – Mitsubishi Power: Cultivating the conditions for growth

The EU's Fit for 55 package aims to reduce greenhouse gas emissions by 55% by 2030 and achieve climate neutrality by 2050.

Despite the importance of hydrogen in the energy transition market, the nascent technology continues to face obstacles on the path to achieving the required widespread adoption and scale.

With news of hydrogen producers like HH2E filing for insolvency and entering self-administration due to lack of investment, there remains a clear need for stronger regulatory support and investment incentives to realise the potential of H2.

With a range of hydrogen combustion technologies on hand, and a number of projects under its belt, Javier Cavada, president and CEO of Mitsubishi Power, EMEA, spoke with inspiratia on the changes needed to energise the H2 market and Mitsubishi Power within this landscape.

We know you have been calling for a firm commitment from government and policymakers to the development of the hydrogen economy in Europe, and in particular the right regulatory frameworks. What does the right regulatory frameworks look like for you?

Today, hydrogen technology is already established, and we have already validated it commercially for power generation. However, if we are serious about scaling low-carbon technologies like hydrogen, I strongly believe that regulation must come first. We see encouraging progress in Europe through frameworks like the recent EU legislation (the Gas Directive 2009/73/EC and the Gas Regulation 715/2009) on renewable and natural gases. But we are at a tipping point, and there is still much to do.

For me, the right regulatory framework has three key elements: investment certainty, affordability, and scalability.

Hydrogen projects are capital-intensive and require long-term confidence. Regulatory mechanisms should reward the services hydrogen can provide, such as capacity reliability in the electricity market, which gives operators a predictable revenue stream. The UK's capacity market offers a good example of how this could work.

We also need to address affordability. The US Inflation Reduction Act (IRA) has shown how powerful financial incentives can be in making technologies cost-competitive. For hydrogen to thrive in Europe, similar instruments are needed to lower CapEx and OpEx costs and close the gap between hydrogen and conventional energy sources.

Finally, scalability. Hydrogen has the potential to decarbonise some of the hardest-to-abate sectors, but we need to act boldly to unlock this potential. Policies and incentives must drive cross-border collaboration and global trading, helping hydrogen scale to the level needed for rapid decarbonisation.

Governments must step up, close the policy gaps, and create the conditions for private capital to follow.

Are the new hydrogen investments and contracts for difference (CfD) a step in the right direction?

The success of Contracts for Difference (CfDs) in renewable power generation has inspired their application to other sectors like clean hydrogen and carbon capture, usage and storage (CCUS). CfDs play an essential role in addressing financial uncertainty, which is one of the major barriers to scaling hydrogen technologies. By guaranteeing a fixed price for hydrogen production, CfDs reduce the risk associated with market fluctuations, thereby providing confidence for investors and project developers to move forward.

Certainty is needed for reaching the Final Investment Decision stage, particularly in an emerging sector like hydrogen, where upfront costs are high, and the supply chain is still developing.

The UK is already implementing the Hydrogen Production Business Model, which is designed to support low-carbon hydrogen production by bridging the cost gap between hydrogen and fossil fuels.

The HPBM highlights how tailored CfD models can incentivise emerging clean technologies, provided they address complexities like the lack of established hydrogen markets and enforce measures to avoid market distortions. So, the success of CfDs must be complemented by robust policies that support infrastructure development, such as production hubs, pipelines, and storage facilities, to ensure long-term scalability.

With the news of other H2 projects struggling to secure enough investment (i.e. HH2E). Do you think the risk profile for hydrogen from an investment perspective is too high and/or too nascent?

For a sector still in its early stages of development, this is a natural part of the growth curve as hydrogen transitions from an innovative solution to a scalable, commercially viable energy source at scale.  

Similar to the trajectory of solar and wind energy, hydrogen is following a familiar path where early investments pave the way for cost reductions, technological advancements, and eventual scalability.

History has shown that targeted investment and supportive policy frameworks can rapidly de-risk emerging technologies. For example, subsidies and incentives were instrumental in driving the rapid adoption of renewables, leading to a significant reduction in their levelised cost of energy. The same approach can be applied to hydrogen to stimulate production, build infrastructure, and expand its use cases.

But above all, hydrogen's potential to decarbonise hard-to-abate sectors such as steel, cement, aluminium and heavy transport underpins its long-term value proposition. Mitsubishi Power is already demonstrating how hydrogen-ready gas turbines can integrate hydrogen into existing power systems to reduce emissions while offering operators a clear pathway to full decarbonisation.

Innovation can ignite rapid progress with the right mix of policy support and strategic collaboration. The hydrogen economy holds great potential, and those who invest today are positioning themselves as leaders in the energy transition of tomorrow.

What opportunities are there for the UK in particular to become a global hydrogen leader?

Given its strong renewable energy base, progressive policy frameworks, and focus on innovation, the UK is in a prime spot to lead global green hydrogen. It has already demonstrated its commitment to the hydrogen economy through the UK Energy Security Strategy, which targets 10GW of low-carbon hydrogen production by 2030, with at least half coming from green hydrogen via electrolysis. Complementing this, the strategy aims to have up to 1GW of carbon capture, utilisation, and CCUS-enabled hydrogen operational or under construction by 2025.

With more than 40% of its power from renewable energy, primarily offshore wind, this achievement is one of the UK's greatest strengths in advancing its clean energy transition. By integrating electrolysis into its renewable energy mix, the UK can generate green hydrogen at scale, which would position it as a major player in the global hydrogen supply chain. The ability to pair renewable electricity generation with hydrogen production allows the UK to address intermittency challenges in renewables while ensuring a reliable energy supply.

The UK also has the opportunity to lead in the development of hydrogen storage and transportation solutions. For example, repurposing existing gas pipelines for hydrogen distribution could reduce infrastructure costs and accelerate adoption. Similarly, building strategic hydrogen hubs and clusters (like the proposed H2H Saltend project) can serve as models for regional and international collaboration, showcasing the UK's ability to integrate hydrogen across industrial, transport, and power sectors—and we are proud to be part of it.

Another key strength lies in the UK's policy and regulatory environment. As mentioned earlier, mechanisms like CfDs for hydrogen production provide much-needed investment certainty. Beyond this, the UK has the potential to advance hydrogen certification and global trade agreements to ensure that its hydrogen meets international standards and is competitive in the global market.

Also, by investing in research and development, the UK can drive down costs, improve efficiency, and unlock new applications for hydrogen.

How do we respond to the electrification of everything?

We are living in a time where everything is being electrified, and that is creating new demands for clean power every single day. In fact, the International Energy Agency predicts that global electricity demand will double by 2050. A big part of this is driven by industries like data centres, which currently use over 1% of the world's electricity—and that is expected to rise to 8% by 2030. 

As the world pushes toward net zero, we also need to ensure that the power we generate to meet growing demands is clean, reliable, and affordable. While renewable energy is growing, it is still not ready to be delivered directly to homes without backup. That is where technologies like natural gas peaker plants come in to help keep the grid stable. But to really make the energy transition work, we need clean technologies like renewable hydrogen to step in and bridge that gap. 

Hydrogen is incredibly versatile. It can decarbonise hard-to-abate sectors like heavy industry, transport, and power generation. The IEA estimates that hydrogen could meet 10% of global energy needs, and the Hydrogen Council predicts it could cut CO2 emissions by a massive six billion tons every year by 2050. 

What makes hydrogen stand out is its ability to be produced with zero emissions at the source, especially when it is made using electrolysis powered by renewable energy. We call that "green hydrogen" because it is clean, efficient, and has a minimal carbon footprint. 

One great way hydrogen can help right now is by blending it with natural gas in existing power plants, which could cut emissions significantly. And because hydrogen can also store energy over the long term, it is perfect for regions that rely heavily on intermittent renewable sources like wind and solar.

How do we futureproof existing power infrastructure?

In light of the evolving energy landscape, futureproofing power infrastructure means ensuring it can meet the exponential growth in electricity demand while advancing decarbonisation goals.

As mentioned earlier, we are seeing new power demand, driven by energy-intensive sectors like AI, data centres, and cryptocurrencies, that will put a lot of strain on the grid.

Gas remains the most viable option for reliable, dispatchable power to stabilise grids. Gas peaker plants play a critical role by providing on-demand power during peak times, ensuring the reliability required for growing renewable energy integration. We already see that transitioning from coal to gas using gas turbine combined cycle systems reduces emissions by nearly 50%.

To take this further, integrating renewable hydrogen into existing gas infrastructure offers a sustainable decarbonisation pathway. Hydrogen blending, such as using a 30% hydrogen mix in gas turbines, can deliver significant emissions reductions, equivalent to taking 50,000 cars off the road per turbine. This approach allows us to cut emissions immediately while scaling up the production and availability of renewable hydrogen.

Futureproofing also requires scaling complementary clean technologies like long-duration energy storage, interconnectors, and smart grids to enhance grid flexibility and resilience. By combining gas and hydrogen with these innovations, we create a power system capable of adapting to evolving energy needs while reducing its carbon footprint.

We also need increased investments in digital technologies, such as smart grids and advanced monitoring systems, to enable operators to optimise performance and anticipate maintenance needs, which helps in reducing downtime and costs. 

Where is Mitsubishi's place in this hydrogen-based ecosystem? Specifically, how is it positioned to help its customers meet their green energy ambitions? 

At Mitsubishi Power, we see ourselves as enablers in the hydrogen ecosystem by helping our customers achieve their green energy ambitions while addressing the practical realities of today's energy landscape. We do this in two ways. One is to deliver our hydrogen-ready gas turbines that can blend up to 30% today and 100% in the near future for new power plants. The other way is by retrofitting gas turbines to co-fire hydrogen blends.

With our hydrogen-enabled gas turbines enabled at 30%, this means the infrastructure is already future-proofed for the transition to low-carbon gases. These solutions let operators mix hydrogen with natural gas, cutting emissions significantly—even at low hydrogen percentages. For example, our advanced turbines have successfully operated with 50% hydrogen blends, and we are on track to commercialise 100% hydrogen-fired turbines by 2030.

A great example of hydrogen's potential is Germany's Power Station Strategy, which prioritises hydrogen-powered gas plants to help industries like steel and cement decarbonise by 2045. This is not just about reducing emissions; it is about transforming energy-intensive industries with zero-carbon solutions.

Over in the US, the ACES Delta Hub is making history. Set to become the largest hydrogen storage facility in the country, it will combine hydrogen production, storage, and transmission at an unprecedented scale. When it launches in 2025, it will use two of our M501JAC turbines, initially running on a 30% hydrogen blend and scaling to 100% green hydrogen by 2045. Plus, its salt dome caverns—each the size of the Empire State Building—will store enough hydrogen to power the Western US.

Looking ahead, our vision goes beyond technology. We are working to scale hydrogen globally, integrating it into energy systems to complement renewables and stabilise grids.

Hydrogen is not just a clean fuel. It is a strong pillar of the energy transition. At Mitsubishi Power, we are committed to making it affordable, scalable, and impactful for a sustainable future.