Renewable Roundup: Europe goes big on hydrogen
We have looked at applications of hydrogen, and specific projects. Here is an analysis of the entire European Union hydrogen market through 2030. The problem, as with many technologies, is reducing costs to be competitive with fossil fuels.
But there are applications where that is not necessary. When renewable energy is overproduced in some area, it has been spilled or curtailed. At that point, the cost of the excess renewables is effectively 0 or even negative. Then it can be used to split water into hydrogen and oxygen without regard to the usual financial analysis. Hydrogen thus becomes a form of energy storage, with an extra value for balancing the grid.
The European Commission has sent the European Green Deal on its way and a preliminary version of its anticipated hydrogen strategy has been leaked. The plan does not lack ambition, as the EU seeks to assert tech leadership in green hydrogen through coordinated efforts across the value chain.
The European Union’s energy system has taken center stage in much of the bloc’s recent political undertakings. After a European Green Deal was crafted in the first 100 days of the new European Commission, lawmakers parried an attempt to dismantle the agreement due to the Covid-19 outbreak with a €1.8 trillion recovery bill, much of which will be used to boost the clean-tech sector.
Subsequently, a number of high-ranking EU officials have noted that the full decarbonization of the economy would require the substantial use of hydrogen. Now, a draft version of the EU’s hydrogen strategy, “Towards a hydrogen economy in Europe: a strategic outlook”, has been leaked. The strategy is scheduled for publication on July 8, but already some clear trends can be seen.
Green hydrogen is produced from renewables without any carbon emissions, while the blue and grey versions are reformed natural gas and therefore release carbon emissions. Blue hydrogen captures, stores or reuses carbon emissions to offset their impact. At the moment, grey hydrogen can be produced for as little as €1.5/kg – a benchmark the EU wants to achieve with green hydrogen, in order to attain price parity. The plan also specifies that the EU will not use any grey hydrogen.
The International Energy Agency (IEA) estimates that the price for green hydrogen is around €3.50 to €5/kg at the moment. The cost of clean energy and electrolysis are the main price drivers here. The draft strategy repeatedly mentions the potential for a hydrogen economy in the European Union, in terms of geopolitics and job creation at the domestic level. Currently, the hydrogen economy in Europe has a turnover of €2 billion. That figure is poised to jump to €140 billion by 2030, accompanied by some 140.000 jobs that could be created.
Still, rolling out green hydrogen at scale in Europe seems to be a long way off. Current sector support for a hydrogen economy amounts to €4 per capita in China, €3 in Japan, €0.75 in the United States, and just €0.50 in the European Union.
To further coordinate the strategy, a European Hydrogen Alliance will be formed, also on July 8. The alliance will feature six separate technology-based sectorial CEO roundtables. The idea behind this is to represent the pillars of the hydrogen value chain: production, transmission, mobility, industry, energy, and heating. Jointly, the alliance will facilitate the implementation and of key projects, such as a clean steel program.
Oct 14, 2019 – It’s early days for renewable hydrogen, but the potential is enormous, and several nations have an eye on the driver’s seat.
A 100% efficient electrolyser requires 39 kWh of electricity to produce 1 kg of hydrogen. The devices today require as much as 48 kWh/kg. So, if electricity costs are 0.05 US$/kWh, the power cost for the electrolysis process alone is 2.40 US$/kg of hydrogen.
As of 2019 almost all hydrogen production is from fossil fuels, and emits 830 million tonnes of carbon dioxide per year.
In parts of the world, steam methane reforming is between $1–3/kg on average. This makes production of hydrogen via electrolysis cost competitive in many regions already, as outlined by Nel Hydrogen and others, including an article by the IEA examining the conditions which could lead to a competitive advantage for electrolysis.
- Hydrogen produced by zero emission energy sources such as electrolysis of water using wind power, solar power, nuclear power, hydro power, wave power or tidal power is referred to as green hydrogen.
- Hydrogen produced from coal may be referred to as brown hydrogen,,
- and when fossil fuel derived, is generally referred to as grey hydrogen.
- When derived from natural gas, if the carbon dioxide is captured, it is referred to as blue hydrogen.
As of 2020 green hydrogen costs between $2.50-6.80 per kilogram and blue hydrogen $1.40-2.40/kg compared with high-carbon grey hydrogen at $1–1.80/kg. Deployment of hydrogen can provide a cost-effective option to displace fossil fuels in applications where emissions reductions would otherwise be impractical and/or expensive. These may include heat for buildings and industry, conversion of natural gas-fired power stations, and fuel for aviation and possibly heavy trucks.
If those finances sound confusing, it’s because they are when you try to understand the math. But properly-organized competitive markets don’t have to do the math in order to come to aggregate supply and demand decisions. Each user and supplier does its bit of the math for its own interests, and the market balances, to use an important technical term, automagically. If you have trouble with that idea, consider the level of the oceans. Water molecules don’t do any math. They just respond to local gravity and pressure, and even out pretty nearly worldwide, subject to wave and tide.
(Crossposted with DailyKos)