Toyota hydrogen truck
The idea of a hydrogen-based economy has been around since the oil crises of the 1970s, but it has not materialised up to this point. Yet according to Jan Cihlar of Ecofys, a Navigant company, hydrogen could still become a key enabler of the low carbon transition, if it is produced with renewable electricity. The potential of further cost reductions make this a possibility in some applications in transport and industry.Â
Most hydrogen produced today is used in the petrochemical sector and for manufacturing fertilizers. 99% of it comes from fossil fuel reforming as this has been the most economical pathway. This does not have any real climate benefits, since CO2 is emitted in the process.
However, a scalable and potentially low greenhouse gas (GHG) emitting alternative is available through water electrolysis. Such âgreen hydrogenâ could have numerous applications ranging from industrial feedstock to fuel cell vehicles (FCVs) and energy storage.
Whereas its use as a chemical feedstock in the industrial sector and as fuel in transport could soon gain momentum, utilization in stationary applications (e.g. in energy storage) is expected to remain modest
The key question is: can it be competitive? Electrolysis production costs are connected to electricity prices,which have prevented widespread application thus far. However, as prices of renewable electricity are falling, as illustrated by recent record-low solar and wind bids between $24/MWh and $53/MWh, the doors could be opening up.
Cost reduction potential
We evaluated various scenarios for the cost evolution of water electrolysis. Data on current production costs are scarce, mainly because few very large electrolysers have been built so far. In the current state of play, electrolyser capital cost (CAPEX) for a typical polymer electrolyte membrane (PEM) electrolyser (1MW) is around $1000/kW. For large alkaline systems it is about $600/kW.
Although PEM technology is more expensive now, it possesses much bigger cost reduction potential than alkaline, if scaled up. The US Department of Energy estimates that electrolyser capital cost can go down to $300/kW. At this level, if optimal electrolyser efficiency (approximately 75% in power-to-gas applications) is realised, prices for renewable energy continue to fall and carbon taxes rise to between $50-100/ton, green hydrogen based on electrolysis can become a cost-competitive option. If we assume a levelized cost of feed-in electricity in the range of $10-30/MWh, green hydrogen could become 45% cheaper than hydrogen derived from natural gas steam reforming.
For the transport sector, this translates to cost of $5-6/100 miles in end-user fuel costs. This compares favourably to fossil fuel alternatives:
End-user fuel cost comparisons in passenger transport[1]
Source: Ecofys – A Navigant Company
Hydrogen has a premium value in transportation as the tank-to-wheel conversion efficiencies of fuel cells can be substantially higherâtypically by a factor of twoâthan those of internal combustion engines (ICEs). This advantage is further emphasised if a carbon tax is added to the price of fossil fuels. These factors are included in the comparison, as are the additional investments needed for hydrogen infrastructure. It is unclear, though, who will finance these.
However, the comparison does not incorporate the difference between purchase prices of ICE vehicles versus FCVs. These currently outdo the cost advantage of using hydrogen instead of gasoline. In other words, even if operating expenses (OPEX) are comparable, the purchase cost of the vehicle (CAPEX) will favour ICE vehicles. In order to make hydrogen competitive, either its retail cost will have to drop way below that of fossil fuels or economies of scale would have to drive down the cost of FCVs significantly. This is certainly not an impossibility.
Seriously engaged
An uptake of green hydrogen would probably unfold in stages, driven by its different applications. Whereas its use as a chemical feedstock in the industrial sector and as fuel in transport could soon gain momentum, utilization in stationary applications (e.g. in energy storage) is expected to remain modest.
One stationary application is the use of green hydrogen to provide flexibility for the grid via conversion of excess electricity from renewables to hydrogen and back to electricity (power-to-gas-to-power). This could in theory be useful at times of high generation and low demand (or vice versa) for security (e.g. grid stability) or economic (e.g. viable business case) reasons, but the costs are currently prohibitive.
Japan plans to have 5.3 million households using hydrogen-based fuel cell micro combined heat and power systems by 2030
Although green hydrogen, then, is still in early phase, many companies and organisations are seriously engaged in its production. For example, in February 2017, Austrian Voestalpine AG announced it is developing one of the worldâs largest polymer electrolyte membrane electrolysers using only green electricity to test hydrogen use in various stages of steel production. A similar initiative will be pursued by a joint venture between SSAB, LKAB and Vattenfall in Sweden.
In January 2017, at the World Economic Forum in Davos, a consortium of 13 companies with cumulative revenue of $1 trillion formed the Hydrogen Council. Its primary purpose is to advance the knowledge and use of hydrogen as an energy source. Japan plans to have 5.3 million households using hydrogen-based fuel cell micro combined heat and power systems by 2030, while the city of Leeds in the United Kingdom has proposed converting its natural gas grid into a hydrogen grid by 2026. In transport, hydrogen-based trains, buses, and trucks are all trying to gain acceptance to fast-track their development.
With a cost potentially as low as $12/GJ (approximately $1.4/kg)[2] for onsite applications[3] and $0.05/mile travelled inclusive of infrastructure costs, the opening is presentâfirst for mobile applications and as a replacement for fossil fuel reforming and other premium applications in industries.
Editor’s NoteÂ
Jan Cihlar is a consultant at Ecofys, a Navigant company. He is an all-round sustainable energy expert and has been advising industrial companies on topics including low-carbon innovations, role of industrial waste in the circular economy or financing models for energy efficiency.
[1] The difference in total production costs between scenario 1 and scenario 2 is caused by varying electricity cost ($30-10/MWh).
[2] For comparison, 1 kg of hydrogen (or about 0.12 GJ of potential energy) has about the same energy content as a gallon of conventional gasoline.
[3] I.e. excluding the cost of compression, storage and dispensing.
High-temperature hydrogen production ought to be considered, too:
https://en.wikipedia.org/wiki/Hybrid_sulfur_cycle
Hi José, thank you for your comment. What is the current status of that production method? The Wiki page does not say much.
I suppose it’s still in the proposition stage. Possible, but what it would cost in the real world is anyone’s guess.
First deployment of EVHT on-going with the CEA spin-off called Sylfen http://sylfen.com/en/home/
Also in development by Sunfire in Germany: http://www.sunfire.de/en/products-technology/hydrogen-generator
OK, based on wishes the capital cost of electrolysers can go down to $300/kW. Add in cost of real estate, staff, and financing.
Now add in the cost of compressing the hydrogen.
Now add in the cost of electricity and water. Buy 100 kWh of clean electricity and after electrolysis and compression you’ll have 50 kWh of energy left. (Physics) To get 2 cents of H2 energy you need to spend 4 cents for electricity.
Now add in cost of transportation. Hydrogen packs less than 10% as much energy per volume as gasoline and diesel. You’ll need more than 10x as many transport trucks.
You’re going to use the H2 in a fuel cell? Fuel cells are only 50% efficient. If you, instead, had used the electricity to charge batteries for an EV you’d lose only 10% at this level.
H2 and fuel cells? Perhaps in some unidentified niche purpose. But not for transportation. Much too inefficient a storage method. And, apparently, you know that.
The tell?
You compare H2/fuel cells to ICEVs, not to EVs.
Thanks for your observations Bob! I will try to answer to each of the points you raise one by one.
1 The electrolyzer CAPEX is based on the US DOE H2A Distributed Production Model 3.0, which actually operates with standard economic assumptions (equity financing, target ROI, staff, etc.). The cost of compressing, storage and dispensing is included in Figure in the article.
2 The efficiency you mention is accounted for in the analysis. You state 50% power-to-gas overall, we use 75% partial (it’s an technology outlook)- before compression, which is calculated separately (as cost).
3 I would not say that truck transport has to be the go-to option. Actually, it makes more sense to create regional hubs with H2 production and build short-distance pipelines to refueling centers (e.g. in long-haul transport you will need only few of these in the EU).
4 Yes, using H2 as a fuel will be always less energy efficient than having a battery electric vehicle. More on this in point (5).
5 On the EV / FC(E)V debate in transport. OPEX wise (“fuel” cost) EVs will definitely be ahead, but there are some advantages of H2 which make just outdo this (for instance – range, increase battery prices for EVs as they go to mass market because of lithium scarcity, etc.). This debate is far from over and it will be interesting to see how it develops. And indeed, my point was to try to show how could H2 be competitive with fossil fuels (displace the incumbent), not with electric vehicles.
1. The figure compares H2 to gasoline and ethanol. Gasoline and ethanol are not H2’s competition.
2. “You state 50% power-to-gas overall, we use 75% partial (itâs an technology outlook)”
What does “technology outlook” mean? How do you do “partial” and end up with compressed H2?
3. Trucks, pipes. Big distribution cost. And hydrogen is a tiny, tiny little bugger. He’s sneak through the very smallest opening
4., 5. Forget lithium scarcity. The planet has massive amounts of lithium. And it is not used up but recyclable. Do not confuse “resources” with “occurrence”.
At 20 mg lithium per kg of Earth’s crust, lithium is the 25th most abundant element. Nickel and lead have about the same abundance. There are approximately 39 million tonnes of accessible lithium in the Earthâs crust.
” This debate is far from over and it will be interesting to see how it develops. ”
Just look how things are progressing. Do you see any company producing FCEVs in any meaningful numbers? Do you see any market interest in FCEVs?
Hi again Bob. I think we could debate the technical details endlessly (I still respond to your comments below), but that is not the purpose here in my opinion. The aim of the article is to show green H2 potential, and indeed there are many (big) companies taking this very seriously at the moment.
To your comment regarding EV/FCEV, my simple response would be: How many companies were producing EVs in meaningful numbers have we seen 5 years ago? Actually, a survey from KPMG suggests that automotive executives believe that H2 transport is the longer-term future, not EVs. Not that this is decisive of course. https://home.kpmg.com/xx/en/home/insights/2017/01/global-automotive-executive-survey-2017.html
On your comments:
1 Most certainly the incumbents of the transport market (gasoline, ethanol) are H2 competition and so is electricity.
2 Yes. You state 50% efficiency while accounting for compression. Our analysis focuses on cost. So, we use 75% efficiency for future power-to-gas conversion (US DOE outlook) and account for costs of compression separately. Hope that clarifies.
3 Agreed, but there is intensive research going on and several interesting start-ups working on low-cost H2 delivery.
4 Apologies for not being clear. I referred to cost of lithium, which might be a future problem if the lithium demand spikes fast.
“How many companies were producing EVs in meaningful numbers have we seen 5 years ago?”
Renault, Nissan and Tesla come to mind. We have no companies producing FCEVs in meaningful numbers and I see no market interest or enthusiasm for the few FCEVs now manufactured.
I have yet to see a single “Oh, WOW! The Toyota Mirai is one heck of an exciting car!!” review. And I have an alert set for the Mirai so I see news about it on a regular basis.
1. That makes no sense. We have to get off petroleum. The alternative which offers the best price will almost certainly take the market. The market will shift based on economics, not for climate change concerns. Beating gasoline is not sufficient, the winner will be the overall least expensive alternative.
2. You wave the number 75% efficient by talking only about the cost of conversion. That’s “false advertising”. We can’t use H2 at atmospheric pressure to run vehicles. Can you imagine the enormous tanks we’d have to haul around?
3. Delivery will take infrastructure. Trucks, pipes or something. And that will cost money. The cost of fuel for a H2 FCEV would have to include the cost of delivery infrastructure and maintenance.
The electric grid is in place. EVs can be “opportunistic users”. The average EV needs to charge less than 3 hours a day which means that (with smart charging) EVs will be able to use the grid when it is being underused by other demand.
4. We may well see a jump in lithium prices if demand peaks without warning. But at this point lithium suppliers see this round of demand increase coming. Tesla, for example, has already contracted for the lithium they will need for their Gigafactory. I’m sure LG Chem, BYD and other rapidly growing battery manufacturers have done the same.
What we should expect is for the price of lithium to drop. The scale of production is about to boom. That means a lot more companies getting into the business. Move innovation and other economy of scale factors coming into play which, in general, lowers price.
Hello Bob,
I completely understand your enthusiasm for electric vehicles. I also tend to agree that for personal transport EVs are likely to dominate the market in foreseeable future. The situation is quite different though for long-range vehicles in my opinion – we see H2 initiatives for trains (Germany), buses (France) and possibly trucks coming up.
There is a good overview of what’s happening and what the prospects are in the NEL presentation (mind you, it’s a company presentation, so we might take it with a grain of salt).
http://nelhydrogen.com/assets/uploads/2017/06/Nel-ASA_Presentation_May-2017_v2.pdf
I reply to your points below. In case of any further questions, please don’t hesitate to send an email over.
1 Exactly. We have to get off petroleum. There are options (H2, biofuels, electricity) and it’s not clear which one will win in the longer term.
2 I never stated that. I explained before that we account for cost of compression, distribution and storage separately (it’s in the figure). 75% is for power-to-gas (atmospheric pressure) conversion efficiency.
3 Our analysis does include that, based on US DOE estimates of these costs. Explained in point 2.
– You talk about EVs dominating the market (meaning a lot and lot of cars) and being opportunistic users? That is highly unlikely with very high EV penetration (load shifting).
4 I like your point on lithium. Exactly the same goes for H2 at economies of scale. Also, H2 production costs could be driven down by developments in other sectors than transport (industrial, energy storage).
Thank you for the conversation,
Jan
“Actually, a survey from KPMG suggests that automotive executives believe that H2 transport is the longer-term future, not EVs”
I’ve taken a quick look at your linked article.
78% of surveyed auto execs believe FCEVs will win out over EVs due to the ability to fill H2 tanks faster than batteries can be changed.
That tells us that those 78% need to be replaced with competent people. (Or at least given an EV to drive for a month. They do not understand how EVs operate.)
[censored]
Mercedes doesn’t seem too keen on all electric cars. This year they discontinued selling their B Class EV, and have sold their small stake in Tesla. Good time to sell while Tesla’s share price is high.
https://electrek.co/2017/07/31/mercedes-kills-electric-b-class/
BMW offer one small EV. The rest are hybrids.
European quality car makers could make life very very tough for Tesla if they wanted. Perhaps not enough car buyers want quality EVs yet to make it worth making them.
So until customers are forced to ditch ICEV cars, German car makers seem happy to sell just hybrids.
Mercedes have committed to 4 new models by 2020 and 10 by 2022. BMW currently have 7 Current Plugin models and have stated at least 9 by 2019 and 25 by 2025. Hydrogen cannot compete with EVs and the cost curve on batteries is accelerating on a downward trend. Sorry but I’ll fuel my EV from my solar panels and not be captured by a new hydrogen cartel.
“Mercedes-Benz parent company Daimler is speeding up its shift towards electrification.
The auto-maker remains on track to bolster its portfolio with 10 electric vehicles, but theyâll arrive three full years sooner than expected.
The battery-powered cars are now scheduled to debut by 2022 instead of by 2025, company officials have confirmed. Thatâs an ambitious goal, especially because the electric cars will use brand-new technology, but Daimler is investing 10 billion Euros (about $10.8 billion) to make it happen.
Daimler needs to make âfundamental changesâ to remain successful, according to analysts who spoke to Bloomberg. Many of the new models will be part of a recently created sub-brand named EQ, an acronym that stands for electric intelligence.
The first one will take the form of a Mercedes-Benz GLC-sized crossover whose design will echo the Generation EQ concept shown last year at the Paris Auto Show.
Mercedes-Benzâs commercial vehicles division has already announced plans to launch a battery-powered heavy-duty truck developed for delivery duties in crowded city centers. It will offer approximately 124 miles of range.”
http://www.greencarreports.com/news/1109657_mercedes-benz-electric-cars-to-arrive-sooner-as-urgency-increases
“European quality car makers could make life very very tough for Tesla if they wanted. Perhaps not enough car buyers want quality EVs yet to make it worth making them.”
Tesla sales continue to grow at the expense of other brand sales. The Model 3 is expected to eat deeply into BMW Series 3 and Mercedes C Class sales.
European car manufacturers might make life tough for Tesla but the won’t for many years because they have not yet started.
Mercedes won’t make an effort in the market for another 5 years. That’s five more years for Tesla to advance, built out their charging system, build their brand name, and capture market share.
Agreed. Physics and current economics are there to remind us there can be more sound alternatives to FCEVs. Whatever way you get H2, be it through electrolysis or any high-temperature process, there’s still a long way to go before it can be justified economically.
Not necessarily. You should check out a company called Hytech Power in Redmond, WA, USA. Quietly going about their business and making amazing strides in three different technology areas…one being Internal Combustion Assistance. You won’t find a great deal of information about them but they have the technology, the results and the cost structure to make a huge impact.
OK, I checked their website and learned they’re attempting to do hydrogen injection in diesel engines. Fine, a commendable undertaking.
Then we have to think over how to get hydrogen cleanly and economically enough and provide the necessary large-scale infrastructure to make it a widespread alternative to diesel-based transportation.
Not saying it cannot happen, but my gut feeling is that battery-based electric mobility will swamp out the market sooner than most of us expect.
Tesla introduces their battery powered long distance “18-wheeler” tractor on September 28. Three weeks from now. That could well mark the point at which we measure the onset of death of the diesel engine in transportation.
That statement is as wildly inaccurate as the Economists cover story on “Roadkill: The death of the combustion engine.” Do you think every trucking company simply goes out and buys new electric trucks or do you think they’ll retrofit their diesel trucks with an inexpensive, effective technology that reduces emissions, and improves both fuel efficiency and engine performance?
A company that can save a lot of money buying fuel is going to get rid of its diesel tractors as quickly as possible and gain a competitive advantage over the competition.
The cost of switching over will, of course, be part of the math.
Now, think about what happens when they consider self-driving Etractors.
I think you can rest assured that trucking companies have already moved to the most efficient diesels. That technology is improved about as much as it can improve. Millions and millions of dollars have been spent squeezing out efficiency.
EAn analyst at Morgan Stanley has projected that Tesla self-driving Etractors could be 70% cheaper to operate than current diesels.
https://electrek.co/2017/09/06/tesla-semi-all-electric-truck-biggest-catalys/
If that is the case present diesels will be junked as fast as Tesla (and other companies) can manufacture Etractors.
Tesla hasn’t officially announced it, but industry rumors put the range of its upcoming electric semi at just 200 – 300 miles. I believe it’s targeted for drayage work — hauling cargo containers from docks to warehouses. Definitely not long haul.
1000 miles is typical for long haul trucks. That’s also the range announced for the Nikola One hydrogen FC semi that debuted earlier this year. But deliveries on that have not yet started, so whether Nikola Motors will come through on that remains to be seen.
Again, not a lot of information out there on what they’re doing. The website is not an accurate reflection of who they are or where they are in productization. That said, step one, the pathway, would be approaching a massive retrofit market that is largely being ignored. There’s a step two, three and four and a five to their plan and it’s not just commendable, it’s very smart by addressing an immediate market need and providing the aforementioned pathway.
“Never say never”, but I’d be really surprised if hydrogen produced by conventional electrolysis were ever to become a major player in the world energy economy. It’s fighting too many drawbacks with respect to competing technologies, and has only one thing going for it: the Greens like it.
That’s not to say that hydrogen itself can’t become a major player. It’s just that conventional electrolysis is a really bad way to produce it. I can name, offhand, half a dozen alternative production methods that score far better on a variety of metrics — the most obvious of which is capital expenditures per unit of annual production capacity.
The cheapest way to produce clean hydrogen is via steam methane reforming (SMR) with carbon sequestration. There are multiple variations of SMR processes that yield pure hydrogen and nearly pure “sequestration ready” CO2 streams. In Texas, there are refineries that use these processes to produce hydrogen for desulferizing and hydrocracking of crude. The CO2 output streams are sold into a ~3500 mile CO2 pipeline network that carries CO2 to oil fields for enhanced oil recovery.
The prices differential between electrolytic hydrogen and hydrogen from SMR with CCS is at least 3:1. That’s in the US, where natural gas is unnaturally cheap, and where there is an EOR market for CO2. In Europe, gas is not so cheap, and the price advantage of hydrogen from SMR would be less pronounced.
It’s almost as easy to produce hydrogen and sequestration-ready CO2 from petroleum coke or bunker oil. Those are easier to import and — more importantly — to store. Storage of the source fuel is important, since it allows hydrogen to be produced more or less on demand. In particular, it’s feasible to ramp up hydrogen production in winter, when solar PV production is down two thirds over its summer peak.
Advocates of electrolytic hydrogen will maintain that sufficient hydrogen could be stored in salt caverns to accommodate seasonal variation in solar PV output. In principle, they’re right. However, new caverns would need to be built, and hydrogen production facilities would need to be centralized in proximity to the caverns. Production from petroleum coke or bunker oil can be broadly distributed.
If Europe wants to be energy-independent, it’s also possible to produce clean hydrogen from coal. The ash content and many impurities in coal make it much less attractive for producing hydrogen, but it can still be done. Until recently, production of hydrogen from coal was the predominant source of hydrogen for the chemical industries in China and much of Asia. The processes employed don’t yield a “sequestration ready” CO2 stream. They make no attempt to, AFAIK, to capture CO2 at all. But it can be done.
If it’s approached as a chemical engineering operation for producing commodity hydrogen, clean hydrogen from coal can work. The Kemper plant in Mississippi, which aimed to produce clean power from coal via gasification with CCS, was an unfortunate fiasco. But it was apparently approached as a simple power project — managed and directed by engineers from a power company whose ability to manage a cutting edge chemical engineering project proved woefully inadequate.
All of the above approaches to clean hydrogen from fossil fuels depend on CCS. That makes them unacceptable to many activists in the Green party. Never mind that embracing CCS has the potential to turn fossil fuel interests from powerful opponents to powerful allies in the fight to curtail carbon emissions and limit global warming. But even ruling out clean hydrogen from fossil fuels, there are at least three other approaches to hydrogen production that promise better efficiency than conventional electrolysis.
The first of those approaches is high temperature steam electrolysis. It’s efficiency has been well demonstrated, but it’s not yet ready for commercial deployment. As I understand it, the solid oxide membrane materials that it employs degrade too quickly.
The second approach (or family of approaches, really) is high temperature thermo-chemical decomposition of water. These have mostly been studied in connection with 4th generation high temperature nuclear reactors. For Greens, that makes the approach even more taboo than CCS. However, there’s no inherent reason that the approach can’t work using high temperature concentrating solar collectors.
The third approach, and perhaps the most promising, is hydrogen production from biomass. There are several potential routes. The simplest but least efficient, in terms of hydrogen yield, is low temperature pyrolysis. Biochar is then a coproduct. The next step up also involves pyrolysis, but processes the non-hydrogen volatiles of pyrolysis with steam, to yield CO2 and additional hydrogen. The char can optionally be steam-reformed, with recovery of all mineral nutrients from the biomass. Then there’s the advanced biological route: enzymatic digestion of cellulose into fermentable sugars, and subsequent production of ethanol. Hydrogen can then be produced efficiently from ethanol — though it isn’t obvious why one would want to.
So, bottom line: lots of ways to produce hydrogen that are more capital and resource efficient than conventional electrolysis. And I haven’t even touched on batteries and other non-hydrogen options for energy storage.
Two (additional) remarks on the article of Jan Cihlar (Ecofys):
1. The capacity factor of solar-PV systems ranges from about 10% to 20%, equivalent to about 875 to 1750 full load hours a year. Most of the electricity produced will be used directly , depending on grid demand. Consequently, when combining solar-PV with electrolytic production of hydrogen, the annual number of full load hours of the electrolyser will operate will be (very) low, making the hydrogen produced (very) expensive – apart from costs associated with transport and (seasonal) storage of hydrogen.
2. Based on information received from a company fabricating electrolysers, the following cost figures were obtained for the PEM technology: $1200/kW for 10 MW having a conv. eff. of 60% (present day technology), $800/kW for 100 MW (near-future technology), $600/kW for 300 MW with a conv. eff. of 70-80% (longer-term-future technology). The hydrogen is produced at a pressure of 35 bar but not 100% clean; in addition removal of e.g. oxygen and water should be applied, reducing the overall conversion efficiency somewhat. These figures are less optimistic than the numbers presented in the article.
US utility solar is now returning roughly 30% CF numbers by use of single axis trackers. And tracking greatly lengthens the solar day.
Any wide spread use of hydrogen would require electrology/compression plants to purchase electricity at normal industrial rates. There just wouldn’t be enough ‘curtailed’ wind/solar, often enough, to fuel a large number of vehicles.
ERCOT is curtailing about 1% of its wind potential. Running a hydrogen plant only a few hours a year just wouldn’t work. As you point out the infrastructure cost would be enormous. Imagine building 100x the number of plants and storage in order to run them 1% of the time on curtailed energy.
So many synfuel schemes hinge on almost free “surplus” electricity and/or concentrated CO2 (sucking on fossil fuel plant smokestacks).
Proper cost estimations need to be based on realistic assumptions.
Hydrogen from water will take 2x or more electricity than will running EVs. Add in the infrastructure costs and H2 FCEVs look like a dead dog limping toward its grave to me.
You are right mentioning higher CF’s for solar-PV with tracking.
I was referring to PV-systems without tracking, as applied in general in Europe.
“Most of the electricity produced will be used directly , depending on grid demand.”
And not to forget PV penetration level. The cheaper PV gets the more common it will get to overbuild, i.e. peak PV production will be higher than demand. This supply surplus can be curtailed or used in a useful way. I do not think this will be hydrogen as transport fuel, but hydrogen injected into the natural gas network might have a chance.
It is in general much more attractive to utilise surpluses of solar PV electricity to generate heat instead of hydrogen.
To paraphrase chairman Mao: Let a thousand flowers blossom and let the market (with externatlities priced in) do the weeding.
Addendum: What counts as surplus will mostly be defined by grid limitations. It will therefore makes the most sense to use surpluses close to where they are produced. What application for surpluses makes the most economic sense will differ from location to location: Is there much demand for heat, is there a natural gas network or storage nearby, is some storable product produced using electricity? -> Enter chairman Mao