Green hydrogen can be produced through electrolysis from any low-cost energy source.

Image: Siemens

Hydrogen cost competitiveness is closer than previously thought and scaling up existing hydrogen technologies will deliver competitive low-carbon solutions across a wide range of applications by 2030, finds a new report published by Hydrogen Council. Yet, to reach this scale, there is a need for investment, policy alignment, and demand creation.

As scale-up of hydrogen production, distribution, as well as of equipment and component manufacturing continues, cost is projected to decrease by up to 50% by 2030 for a wide range of applications, making hydrogen competitive with other low-carbon alternatives and, in some cases, even conventional option, finds the report prepared by global consultancy McKinsey. To deliver on this opportunity, supporting policies will be required in key geographies, including Australia, together with investment support of around US$70 billion.

“Based on real cost data from the industry, the analysis shows that a number of hydrogen solutions can become competitive until 2030 already.” says Bernd Heid, Senior Partner at McKinsey & Company. “Out of 35 use cases analysed, at-scale hydrogen can be the lowest cost low-carbon solution in 22 use cases – such as in the steel industry and heating for existing buildings. And it can beat fossil-based solutions at scale in 9 use cases – for example in heavy-duty transport and trains.”

2030 promise

Strong fall in the cost of producing low carbon and renewable hydrogen is one of the main drivers of this cost trajectory and hydrogen produced via electrolysis is identified as one of the areas where investment until 2030 would make the biggest difference. According to the report, achieving competitive renewable hydrogen from electrolysis will require the deployment of aggregated 70 GW of electrolyzer capacity, with an implied cumulative funding gap with grey production of $US20 billion.

In an earlier analysis, Wood Mackenzie also identified 2030 as the year when green hydrogen, produced primarily by solar electrolysis, would reach cost parity. According to the consultancy, renewables hydrogen could reach parity in Australia, Germany, and Japan by 2030, based on US$30/MWh renewable electricity and 50% utilization hours for electrolyzers.

In production, the cost of low-carbon and/or renewable hydrogen production will fall drastically by up to 60% over the coming decade, the Hydrogen Council report states. This can be attributed to the falling costs of renewable electricity generation, scaling up of electrolyzer manufacturing, and the development of lower-cost carbon storage facilities. Although it identified the same drivers behind falling costs, the International Energy Agency (IEA) was more conservative in its forecast. Its earlier analysis showed that the cost of producing hydrogen from renewable electricity could fall around 30% by 2030.

“2020 marks the beginning of a new era for energy: as the potential for hydrogen to become part of our global energy system becomes a reality, we can expect fewer emissions and improved security and flexibility. This announces the decade of hydrogen,” said Benoît Potier, Chairman and CEO of Air Liquide and Co-chair of the Hydrogen Council. “A clean energy future with hydrogen is closer than we think, because the industry has been working hard on addressing key technology challenges.”

While often touted as the missing link in the energy transition, hydrogen has seen false dawns before. Declaring 2019 a critical year for hydrogen, the IEA said hydrogen was enjoying unprecedented momentum around the world. This was corroborated by the emergence of hydrogen roadmaps and strategies from around the world, which all suggested a large scale and rapid deployment of hydrogen technologies is expected from around 2030 onwards.

In Australia, state and federal energy ministers have given a tick of approval to the National Hydrogen Strategy prepared by chief scientist Alan Finkel and voiced support for a $370 million fund for green hydrogen projects. However, against high expectations of the country’s hydrogen export potential, The Australia Institute’s analysis has suggested that Australia has overhyped the potential demand for hydrogen exports by a factor of up to 11.

At the Friday meeting in Perth, the COAG Energy Council agreed to the National Hydrogen Strategy, which is expected to pave the way for a hydrogen economy that would enhance Australia’s energy security, create jobs and build an export industry valued in billions. The federal government used the meeting to announce $370 million would be directed to a new fund aimed at developing Australia’s hydrogen industry.

The money to bankroll green hydrogen projects will come from existing allocations to the Clean Energy Finance Corporation (CEFC) and Australian Renewable Energy Agency (ARENA), with the former tipping in $300 million and the latter $70 million. According to Energy Minister Angus Taylor, the funding will help Australia to realise its potential as a leading hydrogen supplier to key export markets, particularly in Asia.

Despite positive aspects, the National Hydrogen Strategy remains “technology-neutral”, with both hydrogen produced using renewable energy and the one via fossil fuels with “substantial” carbon capture and storage (CCS) in the game. Throughout the consultation process, Australia’s Chief Scientist Alan Finkel continued to push Australia toward hydrogen produced by solar and wind, but also remained attached to the fossil fuel-CSS idea. The stance was reflected in the Strategy itself.

Notwithstanding the efforts by ACT Energy Minister Shane Rattenbury on Friday to change the strategy so it only supported green hydrogen, federal resources minister Matt Canavan said after the meeting the government would be encouraging all forms of hydrogen creation, including production using brown coal.

“A decade ago the fossil fuel industry promoted clean coal using CCS and now it is promoting hydrogen using the same unsuccessful technology. CCS projects have repeatedly failed to live up to promises, both domestically and globally, and missed their targets by a very large margin time and time again,” Merzanin said. “The only way to make hydrogen truly sustainable is to produce it using water and powered by renewable energy sources. Australia has time to establish and lead a global renewable hydrogen industry and should focus research and development efforts in that area exclusively.”

This article originally appeared on pv-magazine-australia.com and has been republished with permission by pv magazine (www.pv-magazine.com and www.pv-magazine-australia.com

The increasing demand for low-emission fuels, deployment of hydrogen storage tanks in the transportation sector and rising ammonia and methanol consumption worldwide are driving the market. Hydrogen storage is a technology that has enabled the advancement of fuel cell and hydrogen technologies which are then used as portable and stationary power and in transportation.

The hydrogen storage market is witnessing the trend of increasing research and development activities. Countries such as India, the U.K., and the U.S. are developing advanced hydrogen and fuel cell technologies. This is enabling the development of adequate hydrogen storage for material-handling equipment, light-duty vehicles and portable power applications. Further, in collaboration with the U.S. Department of Energy, the National Renewable Energy Laboratory is developing high-performance, cost-effective hydrogen and fuel cell technologies for portable and stationary power and transportation.

The increasing investment in fuel cell and hydrogen technologies holds massive potential for the hydrogen storage market. Further, governments are also coming up with supportive initiatives to popularize the adoption of these technologies. Europe and North America are increasingly focusing on producing zero-emission hydrogen vehicles, for which the U.K. and the U.S. have released funds to boost hydrogen-fuelled vehicle manufacturing. The high demand for methanol and ammonia and stringent emission policies in India, South Korea, Japan and China are further predicted to boost market growth.

One of the factors affecting hydrogen storage market growth positively is extensive use of hydrogen storage tanks in the transportation sector. Owing to high storage performance and cost-effectiveness, hydrogen storage tanks are preferred to power fuel cell and electric vehicles. The World Nuclear Association mentioned the demand for hydrogen for transport fuel from crude oil would witness an increase in the coming years. Also, the volatile prices of crude oil are a big factor driving the demand for hydrogen as transport fuel.

The segments of the hydrogen storage market are region, form of storage, application and type of storage. Based on storage, the bifurcations of the market are material-based and physical storage. The larger market revenue share in the historic period (2012–2015) was accounted for by physical storage. This is credited to the increasing application of hydrogen in various sectors, such as ammonia production, crude oil refining, metalworks, glass production and transportation. The physical storage form is expected to continue leading the market in the forecast period.

Based on application, the categories of the hydrogen storage market are transportation, portable power and stationary power. Owing to surging demand for hydrogen for generating energy and the popularity of hydrogen storage applications in grocery stores, airports and data centers, the stationary power category generated the highest revenue during the historic period. During the forecast period, the highest value CAGR is predicted to be exhibited by the transportation power category on account of the increasing usage of hydrogen as fuel in vehicles.

Therefore, the market for hydrogen storage is set to witness significant growth in the forecast period due to technical advancements in the field of energy storage.

Key players

The key players in the hydrogen storage market include Linde AG, Air Liquide S.A., Worthington Industries Inc., Praxair Inc., HBank Technologies Inc., McPhy Energy S.A., VRV S.p.A., Hexagon Composites ASA, and INOXCVA.

Contracts and agreements have been the major developments in the global hydrogen storage market in recent years. Worthington Industries, Praxair and Linde AG are among the companies which have signed new agreements for the development of hydrogen storage technologies around the world.

This article originally appeared on pv-magazine-usa.com, and has been republished with permission by pv magazine (www.pv-magazine.com and www.pv-magazine-usa.com).

There must be something in the water in Tasmania at the moment, and I’m not talking about James Boags, because the island state has once again demonstrated its grand ambitions in the renewable energy transition.  

Last month, Hydro Tasmania laid out its audacious plan to become the Battery of the Nation in a white paper suggesting the mainland’s pipeline of solar and wind (especially Victoria) could be freed-up by developing, via an additional interconnection across the Bass Trait, Tasmania’s great potential for pumped hydro storage.  

This month, Hydro Tasmania is speaking up the state’s potential as a leader in the nation’s production of green hydrogen from renewable sources like solar electrolysis. The analysis, contained in the white paper “Tasmania’s ‘green hydrogen’ opportunity – what makes Tasmania a unique, green hydrogen zone?” argues that Tasmania has competitive advantages over other states to become Australia’s green hydrogen zone. 

Hydro Tasmania’s CEO, Steve Davy, said a large-scale, cost-competitive green hydrogen production industry could be developed in the state over the coming decade. 

“Our analysis indicates that green hydrogen can be produced in Tasmania for approximately 10-15% less than other Australian power grids needing to offset emissions and 20-30% less than from dedicated off-grid renewables, due to the high plant utilisation that can be supported by Tasmania’s hydropower,” said Davy. 

Davy also believes it’s two great ambitions are interlinked. The Battery of the Nation project, which would require additional interconnection to the mainland, could also be utilised for the transport of green hydrogen from a state with a high level of energy security, stability and self-sufficiency in renewable energy by 2022. 

Tasmania’s impressive renewable record is another reason why it posits itself as a leader in the integration of green hydrogen production with renewable energy systems. Tasmania already has the excess solar and wind generation to produce hydrogen by electrolysis. “This could make use of existing facilities,” argues Davy, “including the Kind Island and Flinders Island renewable energy integration hubs.” 

“As countries like Japan and South Korea look to green hydrogen as a way to meet emissions reduction targets, hydrogen production has the potential to further support large-scale investment in new renewables, as well as direct employment,” continued Davy. 

Hydro Tasmania might be getting ahead of itself in presuming green hydrogen trade agreements with countries like Japan and South Korea, the transportation of green hydrogen by ship reduces its efficiency by a significant margin. However, nothing is stopping green hydrogen’s transportation via pipelines across the relatively short distance of the Bass Strait. 

It is clear that Tasmania has the bite to back up its bark and should be considered as part of the desperately needed National Hydrogen Plan. 

This article originally appeared on pv-magazine-usa.com, and has been republished with permission by pv magazine (www.pv-magazine.com and www.pv-magazine-usa.com).

Image: Siemens

Recent research by Wood Mackenzie, released this week in Singapore at the analyst’s Energy & Commodities Summit – Capitalising on Asia’s Energy Transition, not only indicates that Asia Pacific’s decarbonisation bill could hit US$3.5 trillion by 2040, but more interestingly, that green hydrogen will reach cost parity in Australia by 2030. 

Wood Mackenzie’s analysis shows that the Asia Pacific region is set to become the leading market for new solar and wind installations in the world by 2040. The region currently has 540 GW of installed capacity for solar and wind and is expected to add 1,528 GW over the next two decades.    

With this rapid increase, Wood Mackenzie expects the levelised cost of solar, wind and storage projects to decline more than 3% annually over the next decade, improving exponentially in its competitiveness with fossil-fuel energy sources. “What’s interesting,” noted Prakash Sharma, Head of Markets and Transitions in Asia Pacific for Wood Mackenzie who spoke at the Summit, “is that renewables can now be used outside the power sector as well. Electrolyser technology is improving to produce green hydrogen using electricity powered by renewables.” 

The rise of green hydrogen, driven primarily by solar electrolysis, is expected by Wood Mackenzie to reach cost parity in Australia by 2030. One of the great advantages of green hydrogen is that it can decarbonise ‘difficult sectors’ such as steel, cement, chemicals, heating and heavy-duty trucking. Moreover, as Prakash pointed out, green hydrogen “can also tackle the intermittency of renewables by diverting excess supply during the day to produce hydrogen that can be stored for use in the evening when demand is high.” 

It should also be said that electrolysers, even at their current stage of development, are not only able to tackle renewable intermittency issues, but can actually turn curtailment into a resource. Curtailment results from one of the key hindrances to the energy transition, namely, the inability of traditional grid networks to incorporate new renewable generation.  

In Australia transmission capacity and connection to the grid have become the biggest obstacle to the energy transition. In September, the Australian Energy Market Operator (AEMO) constrained 50% of the output of five large-scale solar generators, four of which are located in Victoria, due to system strength issues. Effectively then, 50% of four of the state’s larger solar farms had their solar energy wasted. 

If that 50% of solar generation were utilised in solar electrolysis and turned into hydrogen, that energy could be saved for use at night-time when demand is high. Hydrogen could effectively turn curtailment into an advantage and lessen the pressure of the transition on infrastructure. 

Although green hydrogen is currently more expensive than conventional sources, Prakash told pv magazine Australia that Wood Mackenzie’s recent analysis suggests green hydrogen could reach parity in Australia, Germany and Japan by 2030, based on US$30/MWh renewable electricity and 50% utilisation hours for electrolysers. “This finding is based,” said Prakash, “on Wood Mackenzie’s proprietary research on the future of renewable electricity costs and improvements in electrolyser technology.” 

However, Prakash stressed that while technology is advancing, “policy support is still needed to facilitate demand for green hydrogen.”   

“The energy transition is not something that is happening elsewhere,” rejoined Thompson. “As the global driver of energy demand, Asia Pacific now needs to embrace the technologies required to deliver sustainable growth.” 

Globally, Wood Mackenzie estimates US$365 million is already invested in the green hydrogen sector and over US$3.5 billion worth of projects are currently in the pipeline. “In our accelerated transition scenario case for Asia Pacific,” continued Prakash, “we forecast the share of zero-carbon energy reaching 35% by 2040 with green hydrogen capturing up to 3% in the mix.” 

Australia’s Chief Scientist Alan Finkel has noted that the majority of potential hydrogen will, “and probably should,” be produced by solar and wind-powered electrolysis. Hydrogen is a big piece of the transition puzzle, argues Finkel, “but it is not by itself the solution…What I and others envisage is that in the dream future where all our energy comes from solar and wind as the primary energy source, around 15-20% of that energy will have to be delivered as a high-density transportable fuel and hydrogen is the ideal candidate.” 

South Australia’s recently released Hydrogen Action Plan (HAP) is a strategic plan to take advantage of the state’s more than 50% renewable energy mix. HAP looks to make South Australia a green hydrogen producer and exporter.

This article originally appeared on pv-magazine-usa.com, and has been republished with permission by pv magazine (www.pv-magazine.com and www.pv-magazine-usa.com).

By Blake Matich