In its 2022 REPowerEU plan, the EU sought to eliminate dependence on Russian fossil fuel imports well before 2030, with hydrogen playing a key role. In a new report Agora Enerigewende, the German energy analysts, agree that ‘Europe will need a significant amount of renewable hydrogen to become climate neutral’, but it says that, in its Gas Exit scenario, hydrogen demand by 2030 ‘could be only a fifth of that foreseen in REPowerEU. By prioritising direct electrification and reserving its use for no-regret applications, the EU would need only 116 TWh of renewable hydrogen by 2030, compared to 666 TWh in REPowerEU. This is more cost-effective, more realistic from a security of supply perspective & consistent with the hydrogen sub-targets in the new Renewable Energy Directive. The REPowerEU target should thus be revised’.
The case for a rethink becomes even stronger when the you look at the difference in hydrogen imports. 333 TWh of hydrogen imports are foreseen under REPowerEU in 2030, contrasting with only 27 TWh of hydrogen imports in the new Agora Pathway. Reducing the need for hydrogen, it notes, avoids the need to make blue hydrogen from gas or pink hydrogen from nuclear. In addition, although biomass is used for heating in the Agora scenario, it avoids the expansion of biomass for power production: the REPowerEU scenario foresaw a doubling of biomass use for this.
Most of the early displacement of fossil gas in the energy sectors in Agora’s scenario is driven by ‘ massive upscaling of solar and wind generation in the power sector, while renewable hydrogen (H2) and hydrogen derivatives displace much of the existing fossil gas consumption in refineries and for hydrogen production in the decade after 2030.’ So there is still significant use if hydrogen, although heat pumps play an increasingly key role, along with end uses efficiency and other renewables.
Thus in the building sector ‘efficiency, heat pumps and decarbonised district heating serve as the key levers for achieving a nearly fossil gas-free building stock by 2040.’ Additional gas displacement is also achieved through the use of direct solar heating. Meanwhile, in the power sector, as well as wind and PV, ‘large-scale heat pumps and deep geothermal also play a crucial role in the displacement of fossil gas in district heating networks, delivering roughly a quarter of district heat production by 2030 and half by 2040’.
Fossil gas demand reductions in industry vary by sub-sector, but are ‘initially mostly driven by direct electrification and efficiency increases, complemented later on by renewable H2 and bioenergy with carbon capture and storage (BECCS)’.
Some of this might seem optimistic (very rapid deployment of heat pumps, and then use of BECCS), and the overall fossil gas phase-out is slowed in this scenario (to 46% by 2030) compared with REPPower EU (68% by 2030). However, the Agora scenario has faster phase outs for coal and oil and that means that total emissions fall faster, to about 90% of 1990 levels by 2040, while fossil gas use reaches zero by 2050 with renewables then providing 96% of power generation.
As my last few posts have indicated, there is more than 1TW of electrolyser capacity in the pipeline globally, with support for some quite large green hydrogen projects soon to be underway or planned around the world, with China in the lead, followed by the USA, Australia and the EU, including a major Dutch programme and an interesting project in Estonia. However, some of these programmes may take time to develop fully, and there have also been pressures in the EU for reduced hydrogen support, and for increased support for heat pumps, on the basis of cost and efficiency, particularly in the heating sector. That was also seen as a way to avoid massive imports of hydrogen. One estimate was that Germany would have to import 70% of the hydrogen it needed. However, the debate has become a little contentious, with some saying that the EU bureaucracy was strangling hydrogen.
That’s of course is not a case that can be made in the UK, outside the EU, but, in its advocacy of blue hydrogen, the fossil gas lobby has been seen by some, in the UK as well as in the EU, as a conservative force. While, like Agora in the EU, the critics of green hydrogen look to electrification as the main way ahead for heating- pushing for heat pumps and end-use efficiency. Though the debate can get a bit convoluted, with some in the UK claiming that the UK government isn’t keen on electrification. That may be overstating it- all the government has said is that ‘we are mindful of the need to avoid unintentionally building in an electricity bias’. But certainly, as I noted in my last post, a source at the Department of Energy Security and Net Zero did tell Hydrogen Insight that ‘the government is currently exploring the need and case for market intervention for hydrogen to power,’ and that it views hydrogen ‘as an important component of our future power system to provide flexible low carbon generation capacity as we integrate more renewables.’
That raises some interesting issue. For example, as I asked in my last post, where would the hydrogen come from - fossil gas SMR with CCS, or renewable powered electrolysis? There is also the issue of whether hydrogen, however produced, can be easily transmitted by pipe. Some say yes, others are unsure. Also, however it is delivered, will it be welcome by users? The evidence from current local UK trials isn’t too convincing- as hydrogen critic Liebreich notes approvingly, there’s been some strong local resistance.
Meantime, the push for heat pumps remains strong, with it being claimed that, even if they may be costly to fit, many of the problems sometimes alluded with heat pumps are myths and that ‘over 15 years a heat pump will emit 77-86% fewer carbon emissions than a gas fired boiler’. Certainly the government seems keen press ahead and British Gas are offering a money back guarantee, with a refund if they don’t work as well as boilers- although the Telegraph evidently saw that as an admission that they didn’t! But a sample of early UK adopters by the Guardian found were mostly successful.
It may take time before its completely clear, with the cost still being worrying- and there have been concerns in Germany about the theft of outdoor units! But the technical case for them is strong, with a Swiss study claiming that 40 independent studies have found that heat pumps win out for home heat: it says hydrogen will play only a niche role. We shall see.
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