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03-02-2023 | Consumables | News | Article

Using Hydrogen Purposefully and Economically

Author: Christiane Köllner

6 min reading time

Green hydrogen will remain a scarce commodity for the foreseeable future. A current research project therefore calls for political prioritization of H2 use. Hydrogen for passenger cars is not at the top of the list. 

Green hydrogen holds great opportunities for the transformation of the energy system. It is expected to contribute to energy security and replace natural gas and oil on a large scale in transportation and heat supply. For the foreseeable future, however, its availability will remain scarce in relation to planned demand, even when possible imports are taken into account. Hydrogen must therefore be used in a targeted and economical manner. In addition to the expansion of the hydrogen economy and renewable energies, experts therefore also advocate the prioritization of hydrogen applications.

What might such prioritization look like? Researchers from the Borderstep Institute for Innovation and Sustainability and the Institute for Ecological Economy Research (IÖW) recommend limiting the promotion of hydrogen to fields of application such as steel and ammonia production and long-term energy storage. Without clear political prioritization, there would be a risk of undesirable developments that could jeopardize the sustainable use of hydrogen and at the same time displace more efficient, less expensive alternatives. In the impulse paper "Using Hydrogen Sparingly," the researchers provide up-to-date policy recommendations based on the report "The Hydrogen Dilemma: Availability, Demands, and Myths." These include: Hydrogen is not considered viable for passenger cars, buses and for delivery transport. 

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In Germany, green hydrogen is claimed to be the panacea for the energy transition in those cases where the direct use of electric energy does not make sense. These include material applications in industry, but also such applications as fuel for mobility on water, in the air, or on land, and particularly in logistics. The ambitions are impressive, but the potentials are less so.

Without large amounts of green electricity, no green hydrogen 

The role of (green) hydrogen in the coming years is limited primarily by its low availability. "While green hydrogen will be an indispensable building block in the energy system of the future, its production requires large amounts of green electricity. It will therefore take time before larger quantities will be available," says Jens Clausen of the Borderstep Institute. 

Precise figures emerge from a paper by experts from six institutes for the Copernicus Ariadne project on the energy transition, which is funded by the German Federal Ministry of Education and Research. It states that in order to meet 1 % of energy demand in the European Union (EU) with domestic green hydrogen by 2030, production would have to increase by around 70 % per year. And even that would only be possible if the European 40-GW expansion target for electrolysis capacity is met. The hydrogen market ramp-up would have to be twice as fast as for wind power and similar to that for photovoltaics. 

"Even if even faster, unprecedented growth is conceivable and non-European imports are taken into account, hydrogen volumes are proportionately low until at least 2030," the paper says. Uncertainty would also prevail for the time after that, at which point green hydrogen would be available in large quantities and at what prices. The feasible volumes and prices of e-fuels would additionally be determined by the scarcity and cost of non-fossil sources of CO2, particularly from CO2 air capture plants.

Lack of competitiveness of hydrogen

According to the Ariadne researchers, on course for climate neutrality in 2045, renewable energy capacities should be tripled in a "decade of electrification," battery electric vehicles should dominate new car registrations, and about 5 million heat pumps should be installed. At the same time, however, the market ramp-up of hydrogen must already be pursued with great political vigor, they said. 

However, too little electricity from solar and wind energy is not the only hurdle. There is also a lack of production plants or capacity for hydrogen. A study by researchers led by Adrian Odenweller and Falko Ueckerdt of the Potsdam Institute for Climate Impact Research (PIK), published in the journal Nature Energy, has determined: Based on an estimated 600 MW worldwide in 2021 in mostly small and individually manufactured plants (<10 MW), global capacity would have to grow 6,000 to 8,000 times from 2021 to 2050 to meet climate neutrality scenarios compatible with the Paris Agreement, they say. This exceeds the tenfold increase in renewables required at the same time, it said.

Electrolysis capacity unclear

While announcements of electrolysis projects pointed to an exponential increase in momentum in the coming years with triple-digit annual growth rates, the researchers said in the Nature Energy paper, 80% of the additional capacity announced to come online by 2023 is not yet backed by a final investment decision. "It therefore remains unclear how many electrolysis projects will be realized in the near term and whether total capacity can grow fast enough to meet medium- to long-term hydrogen demand," the researchers said. 

Expansion of global electrolysis and e-fuel capacity is inhibited by "the fact that most green hydrogen and e-fuel applications, despite expected cost reductions before 2030, are unlikely to be competitive yet without direct support," the Ariadne paper said. Rising CO2 prices would increasingly reduce the incremental costs compared to fossil alternatives, but would likely not be enough to close the "competitiveness gap" and achieve cost parity by 2030, it said.

Prioritize direct-electric options where possible

As long as there is uncertainty about feasible hydrogen volumes and prices, hydrogen should be used primarily where there are no alternatives through direct electrification, the Ariadne researchers advise. For example, in industry in ammonia or steel production, and in e-fuels in long-haul aviation or shipping. The scientists from the Borderstep Institute and IÖW also come to this conclusion: "In steel production, as long-term energy storage and as a raw material for refineries and the chemical industry, hydrogen is indispensable according to the current state of the art in order to achieve the climate targets. In other areas, solutions that are more efficient in terms of energy and price should be preferred," says Florian Kern of the IÖW. Steel production accounts for around 7 % of CO2 emissions in Germany each year.

Similar voices can also be heard from the automotive industry, as Richard Backhaus writes in the article Hydrogen Instead of Coal – How Steel Can Become "Green" from ATZelectronics worldwide 7-8-2022. He gives the following example: "The commercial vehicle manufacturer Traton, for example, takes the view that H2 should be left to industries that are difficult to decarbonize, such as steel mills, and that electrification of the drive system should preferably be accomplished using batteries instead of H2 fuel cells."

Since there are high conversion losses in the production of hydrogen, hydrogen consumes significantly more primary energy than direct-electric solutions, he said: A boiler running on hydrogen, for example, would consume five times as much energy as a heat pump, the researchers from Borderstep Institute and IÖW calculate. And a hydrogen-powered car would need twice as much green electricity as an electric car with a battery. If policymakers nevertheless promoted hydrogen in such areas, more efficient technologies would be less likely to catch on.

Hydrogen from fossil sources as a bridging technology?

"It is a huge problem for climate protection if sensible investments are prevented by technology hype," warns technology researcher Kern of the IÖW. "If it turns out that the forecasts on the availability of green hydrogen were too optimistic, we'll have to continue to make do with fossil fuels and miss the climate targets."

According to the Ariadne researchers, it is also conceivable to use hydrogen from fossil sources as a temporary bridging technology - but accompanied by certification, regulation and appropriate pricing of emissions. This is the only way to ensure that greenhouse gas emissions are actually reduced and not just shifted.

Embedding hydrogen in climate protection strategy

The researchers from the Borderstep Institute and IÖW call on the German government to set clear priorities in its hydrogen strategy. The central policy instrument, they say, is the German government's 2020 National Hydrogen Strategy, which is to be revised this year. "Pilot projects can be useful to further develop technologies and gain practical experience. But directional certainty is also needed in which areas hydrogen is really a good option for decarbonization. Funding should flow into those applications for which there is widespread consensus that hydrogen is necessary there," says Florian Kern of the IÖW.

For the Ariadne scientists, a successful hydrogen strategy must be embedded in a climate protection strategy that takes into account the uncertainties of both hydrogen and e-fuels as well as direct electrification.

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