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EU green hydrogen heating plans take a hammering
Trade bodies for energy efficiency and renewable energy sectors, along with environmental groups, have sent a letter to the European Commission (EC) protesting plans to use green hydrogen to decarbonize the heating sector.
The 21 January letter noted the immaturity of the green hydrogen sector, arguing that using hydrogen produced from renewables for heating on a large scale was "problematic" in terms of scalability, the cost of its production, and efficiency. But the signatories backed the use of green hydrogen as a fuel for hard-to-decarbonize sectors like transport and industry.
Europe can't currently produce anywhere near enough green hydrogen for heating the continent's buildings, nor are forecasted volumes going to be sufficient. Globally, installed green hydrogen production capacity stood at just over 100 MW in June, most of which is operating or under construction in Germany, according to IHS Markit's Power-to-X tracker.
By 2050, green hydrogen will only account for about 10% of the final energy demand in the EU and UK, according to a June analysis paper authored by two coalitions for environmental groups, Climate Action Network (CAN) Europe and European Environmental Bureau (EEB), both of whom signed the letter.
The groups urged the EC to trim the bloc's estimates for the EU's future green hydrogen production potential, be it produced domestically or imported. In addition, they said attempting to reach these goals would require funding "unnecessary" fossil fuel pipeline upgrades instead of investing in technologies already on the market that can bring quick decarbonization. They proposed a rollout of readily available technologies like insulation, district heat networks, and electrification using renewable energy.
The criticism comes after the EC launched its Hydrogen Strategy in July. The strategy is a roadmap for potential regulations increasing the use of hydrogen as a fuel supplied by existing natural gas grid networks to residential and commercial boilers, and promoted its use in industry and transport.
This is partly how the EC plans to cut carbon dioxide emissions to reach a goal of a 55% reduction compared with 1990 levels by 2030 under the European Green Deal. The recent letter was sent to the commissioner charged with leading work on the Green Deal, EC Executive Vice-President Frans Timmermans.
To scale up from about 1 GW of installed green hydrogen electrolyzer capacity, the Hydrogen Strategy calls for the installation of at least 6 GW of such electrolyzers able to produce up to 1 million mt of green hydrogen by 2024. This should increase to 40 GW to produce 10 million mt by 2030.
Gas consumption in the EU was 203 billion cubic meters (84 million mt) in the first half of 2020, with around half of the EU's gas consumption used for industrial and power needs and most of the rest used for heating buildings, the EC said in 2016.
Green hydrogen costs
The availability of green hydrogen at EU production facilities, which for the most part are at the feasibility study or early stages, is limited, raising its cost.
"It's tempting to believe that hydrogen represents the future of domestic heating. But this idea is out of touch with the reality we're faced with. Currently, the production of truly renewable hydrogen is still limited and expensive. This is a reason why today hydrogen is mostly produced from fossil fuels, including gas and coal used to generate electricity or as feedstock," Mauro Anastasio, a communications officer for the EEB told IHS Markit.
"The [EC] should focus on adopting a more strategic approach which prioritizes the use of truly renewable hydrogen for hard-to-decarbonize sectors such as transport and the industry, where the energy demand would be comparatively lower and where electrification may be more challenging," said Anastasio.
Also impacting the volume of available green hydrogen is the amount of electricity required, some of which is lost in conversion. "Renewable hydrogen is not a primary source of energy, but an energy carrier requiring conversion from renewable electricity and implying important energy losses. We can consider it a limited resource, needing reflection on its development and use and its ability to deliver at the scale and speed necessary," said CAN Europe's Energy Scenarios Policy Coordinator, Jörg Mühlenhoff.
Heat pumps, which use coolant physics to create heat, would be a cheaper source of low-carbon heating than the three different types of green hydrogen boilers in the UK market, according to December 2020 white paper funded by one of the signatories, the European Climate Foundation.
On the other hand, IHS analysts say that basing decarbonization plans on improving energy efficiency or going all-electric have their own challenges. Buildings that cannot be renovated is one sector where hydrogen could offer a low-carbon advantage.
Introducing hydrogen into an existing natural gas heating system could be easier for homeowners. Hydrogen gas grid conversion would "involve minimal disruption for the customer (domestic or commercial) and require no large-scale modifications to their property," according to operators of a UK hydrogen feasibility study, the H21 Leeds City Gate project. This aspect of mooted hydrogen heating compares favorably with the UK government's current practice of retrofitting buildings with insulation and heat pumps for energy efficiency, the study found.
Will there be enough hydrogen to meet demand in the housing sector?
IHS Markit sees rapid growth in hydrogen produced by Power-to-X (zero- or low-carbon fuels produced by renewable energy) projects globally in the next decade, indicating that more hydrogen might be available, and at a lower cost. From about 100 MW of installed capacity today, IHS Markit says that 11 GW of capacity will be operating in 2030, and projects efficiency gains that will reduce the cost of electrolysis by 70% by 2025.
It should be noted, however, that opinions diverge on whether green hydrogen's cost will fall quickly. An October paper by researchers at Imperial College London found that low-cost green hydrogen supplies would not be available until 2050-2060.
Blue hydrogen as back-up
In the absence of enough green hydrogen supplies in the EU, fossil fuel-sourced blue hydrogen could become a stopgap measure for fulfilling the EU's low-carbon aims. Blue hydrogen can be produced from natural gas when the resulting carbon emissions are sequestered, typically underground.
While the EU prefers green hydrogen, it gives blue hydrogen a role to play as a source of market growth while benefiting from potential "Contracts for Difference" subsidies, according to analysis of the strategy by law firm Watson Farley & Williams.
The European Parliament's environment committee on 27 January adopted a motion to amend the Hydrogen Strategy to enable incentives "to scale-up renewable and ultra-low-carbon hydrogen in industry and the transport sector" temporarily to overcome green hydrogen's production hurdle.
The EEB wants the EU to change tactics. "We want to avoid a scenario where the EU can't meet its production goals for renewable hydrogen and so lawmakers decide to shift to non-renewable hydrogen as a back-up plan—something that is already being suggested and discussed as we feared," Anastasio said.
CAN Europe added that dependency on blue hydrogen also impacts future decarbonization. "Given that today almost all hydrogen comes from fossil fuels, there is a significant risk that the European hydrogen sector would fail to shift completely to renewable hydrogen and instead become a way to justify continued investments in fossil fuels and maintaining legacy or building new infrastructure that should instead be decommissioned," said Mühlenhoff.
Others, however, see imported hydrogen as both necessary and feasible for Europe to meet its decarbonization goals. Not only blue hydrogen, but also imported green hydrogen could be necessary to make up the EU's hydrogen shortfall. This was illustrated in a recent Belgian green hydrogen import feasibility study by a coalition between DEME, ENGIE, Exmar, Fluxys, Port of Antwerp, Port of Zeebrugge, and WaterstofNet.
"It is clear that solar and wind will be the renewable energy sources of the future. However, in Belgium and Western Europe, there is not enough wind or solar energy, while other regions in the world in fact have solar and wind energy in abundance," the coalition said in a 27 January statement.
The feasibility study is the first step towards creating green hydrogen import terminals at ports.
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