Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
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.
Posted 03 February 2021 by Cristina Brooks, Senior Journalist, Climate and Sustainability