Hydrogen’s momentum is building, as European ministers consider approving a new ‘Hydrogen Initiative’ this week that aims to “maximise the great potential of sustainable hydrogen technology.” With funding from the EU’s Fuel Cells and Hydrogen Joint Undertaking, a consortium of industrial heavyweights in the H2FUTURE project is already ramping up production of hydrogen from renewable sources. But, as the International Renewable Energy Agency notes in a new report, for hydrogen to really take off would require broad political support.

Already undergoing a major resurgence on the international sustainability agenda, it looks like hydrogen could get a major boost in European political support this week. As energy ministers gather in Linz, Austria on 17 and 18 September for an informal meeting, they have also been invited to attend a conference “to discuss the role of sustainable hydrogen, storage and the contribution of the energy-intensive industry to the energy transformation.” (See footnote, editor.)

At the event, organised under the auspices of the Austrian presidency of the EU Council, they will be encouraged to sign a ‘Hydrogen Initiative’, a non-binding political declaration of support for hydrogen development.

As reported on 11 September in Energy Post Weekly, a slew of recent reports and initiatives are now promoting hydrogen’s potential role in the energy transition. The focus is on power-to-hydrogen, or ‘green’ hydrogen, produced using electricity generated from renewable sources to power electrolysers that split water into hydrogen and oxygen.

Published on 6 September, the International Renewable Energy Agency (IRENA)’s technology outlook ‘Hydrogen from renewable power’ cites the potential for green hydrogen to be used as energy storage for surplus renewable electricity, as an energy carrier and in sectors otherwise difficult to decarbonise through electrification. At present, one-third of global energy-related emissions come from sectors, mostly energy-intensive industry and freight transport, for which there is no economically viable alternative to fossil fuels.

Over 95% of current hydrogen production is fossil-fuel based: most commonly steam-methane reforming (SMR), followed by oil and coal gasification. The hydrogen feedstock market is well established, with a value estimated at USD$115 billion.

The lion’s share of the demand for this comes from the chemicals industry, for producing ammonia for example, and in refining for hydrocracking and the desulphurisation of fuels. Other sectors also use hydrogen, such as iron and steel, glass and electronics, but their combined share of total global demand is small.

“As renewable energy capacity demand increases and prices drop, the cost of hydrogen production by 2030 could drop by 70% from current levels”

Although the green hydrogen production process is emissions-free, its expense has been a limiting factor in its wider use. However, the rapid expansion of low-cost renewable energy may bring costs much closer to that of SMR.

Commenting on recent research from investment bank Morgan Stanley, Carolina Dores, co-head of the Morgan Stanley European Utility team, said: “As renewable energy capacity demand increases and prices drop, the cost of hydrogen production by 2030 could drop by 70% from current levels. The key to cost savings could be hydrogen production facilities built jointly with wind/solar farms, so producers could generate power without incurring grid fees, taxes and levies.”

Hydrogen in Europe

Over the past ten years, EU funding of more than €100 million has been channelled, via the public-private partnership Fuel Cells and Hydrogen Joint Undertaking (FCH JU), to 30 projects using hydrogen in the ‘greening’ of energy-intensive industry.

Its flagship project is H2FUTURE, an experimental hydrogen production facility currently under construction in Linz on the premises of Voestalpine. The steelmaker is a project partner in the H2FUTURE consortium that also includes Verbund, Austria’s biggest utility and one of the largest hydropower producers in Europe. The consortium has received funding of €12 million from the FCH JU and an additional €6 million from the project partners.

“The IRENA report is really significant for us. 96% of our output is generated from renewables, mainly hydropower but also wind. Over the last few years, we’ve increasingly looked into investing in hydrogen as a green energy carrier,” says Walburga Hemetsberger, Verbund’s representative in Brussels, in an interview with Energy Post. Verbund is coordinating the H2FUTURE demonstration project and will provide renewable energy to power it.

“It’s only through coordination at the European level and the type of public-private cooperation enabled by the Fuel Cells and Hydrogen Joint Undertaking that projects on this scale can happen”

“From the utility perspective, the long-term benefit we see is the new degree of freedom hydrogen gives for storing and shifting large amounts of energy between seasons, although, of course, we regard it as very important to find solutions for energy-intensive industries that are difficult to decarbonise, such as steel,” says Hemetsberger.

The H2FUTURE project is also a demonstration of sector coupling, a new buzzword in sustainable energy, meaning closer integration of energy-consuming sectors – buildings (heating and cooling), transport and industry – with power generation.

“There are long-term strategic interests for each sector – energy suppliers, the steel industry, technology providers and research – represented by the partners in this project,” says Hemetsberger. “It’s only through coordination at the European level and the type of public-private cooperation enabled by the FCH JU that projects on this scale can happen. Working in isolation is not an option,” she adds.

Siemens is supplying the proton exchange membrane (PEM) electrolyser for the plant, a rapidly emerging technology for water electrolysis in which Europe has a leading position that has been assisted by funding from FCH JU.

It can operate more flexibly and reactively than current alkaline electrolysers technology – a “significant advantage in allowing flexible operation to capture revenues from multiple electricity markets,” according to the IRENA report. Alkaline electrolysers have been used by industry for nearly a century, but the rapid recent increase in power of PEM electrolysers (for example, from 100kW in a 2011 FCH-funded project Don Quichote, to 6MW in H2FUTURE) means that they are gaining market traction.

Once generated, the hydrogen from the H2FUTURE test facility will be fed directly into Voestalpine’s gas network for steel production. The ultimate aim is to replace coking coal – used to reduce iron ore into molten metal – with green hydrogen in the production of crude steel. “Voestalpine is the single biggest source of carbon emissions in Austria,” explains Hemetsberger. “This is a demonstration project, but if it succeeds in scaling up, this would really be a major achievement.”

Future prospects

However, forecasts from IRENA, the Hydrogen Council and DNV GL see a bigger role for hydrogen in transport than in industry. Hemetsberger also “expects hydrogen to play an important role in decarbonising mobility – battery electric vehicles won’t do it alone. We think it will be a combination of both battery electric and fuel-cell vehicles.”

The forecasts on how big a part green hydrogen will play in the overall future energy landscape vary considerably. IRENA’s own economic assessment (using the Remap cost methodology) estimates hydrogen’s economic potential in addition to feedstock uses at about 8EJ at the global level by 2050 –around 2% of final energy consumption. Most of this would be utilised in transport, with significant use also in industry, mainly by the steel and chemicals sectors.

A (much) more upbeat outlook for hydrogen is envisaged by the Hydrogen Council, a fuel cell and hydrogen industry coalition that includes major players such as Toyota, Total and Shell. It forecasts that by 2050, 18% of the world’s final energy demand could be met by hydrogen – equal to about 78EJ, of which 19EJ are feedstock uses.

In contrast, a recent report, Energy Transition Outlook, from global technical consultancy DNV GL predicts that hydrogen will not constitute more than 0.5% of energy supply in 2050, although in some regions and some segments (for example, where there is a lot of gas infrastructure), the percentage will be much higher, according to the authors.

In an interview with Energy Post, DNV GL project leader Sverre Alvik said: “That is not a lot. What we wanted to know is what it would take for hydrogen to play a bigger role.” The answer, he added, is: “large-scale policy support on a global scale. Right now, some countries like Japan and the UK give support to hydrogen, but that’s not enough. You need the type of policy support that renewables and electric vehicles are getting to bring costs down. Only if that happens are we likely to see a broad take-off.”

“I can tell you that, until very recently no one was talking about hydrogen here in Brussels. Now, it is mentioned at all the major conferences”

The provision of that type of policy support could be signalled by Europe’s energy ministers if they approve the Hydrogen Initiative this week. Signatories will “collectively aim to maximise the great potential of sustainable hydrogen technology,” according to the text of the initiative, which calls for renewed efforts in research and innovation, the raising of public awareness and acceptance for hydrogen technology, and the promotion of “a worldwide supporting framework for sustainable hydrogen technology.”

This is clear indication that hydrogen is moving up the sustainability agenda, says Hemetsberger: “I can tell you that, until very recently no one was talking about hydrogen here in Brussels. Now, it is mentioned at all the major conferences – especially in relation to sector coupling, hydrogen is the main focus point.”

Note

The EU ministers did sign the Hydrogen Initiative document on 18 September, as reported by Reuters here.

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