The Role of Hydrogen


The role of hydrogen in the energy transition

Hydrogen's unique properties make it a powerful enabler for the energy transition, with benefits for both the energy system and end use applications (Figure 2).

1. Enable large-scale, efficient renewable energy integration
In the power sector, the timing of the variable electricity supply and demand is not well matched (neither over the day nor between seasons). Integration of an increasing share of intermittent sources up to targeted levels (above 40% of the electricity mix) will enhance the need of operational flexibility. Increased electrification and limited storability of electricity will require adequate storage solutions. Various options exist to resolve the various issues, such as grid infrastructure upgrades of technologies for short or long term balancing of supply and demand, e.g., flexible back up generation, demand side management, or energy storage technologies.
Hydrogen offers valuable advantages in this context, as it avoids CO2 and particles emission, can be deployed at large scale, and can be made available everywhere. There are two ways in which hydrogen improves the efficiency and flexibility of the energy system (Figure 3).
i. Electrolysis can convert excess electricity into hydrogen during times of oversupply. The produced hydrogen can then be used to provide back-up power during power deficits or can be used in other sectors such as transport, industry or residential. It thus valorizes excess electricity.
The potential of valorization or otherwise curtailed renewable energy is considerable. For instance, in Germany alone, in a scenario with 90% renewables, curtailment of more then 170 TWh/year is projected for 2050, equivalent to about half the energy needed to fuel the German passenger car fleet with hydrogen. This would create an opportunity for around 60 GW electrolysis capacity to operate economically (depending on improvements in grid interconnectivity).


 Hydrogen offers a centralized or decentralized source of primary or backup power. Like gas, power from hydrogen (or one of its compounds) is switched on and off quickly. Thus hydrogen helps deal with sudden drops in renewable energy supply, e.g., during adverse weather events). In addition, electrolysers may provide ancillary services to the grid, such as frequency regulations.
Hydrogen can also be used in specific fuel cell CHPs in industry and buildings, linking heat and power generation. This enhances the efficiency of generated electricity and heat for these sectors and improves the flexibility of the energy system as a whole. Its potential is discussed in the following sections.
ii. Hydrogen can serve as long-term carbon-free seasonal storage medium.
Hydrogen represents the optimal overall solution for long-term carbon-free seasonal storage. While batteries, super capacitors, and compressed air can also support balancing, they lack either the power capacity or the storage time span needed to address seasonal imbalance (Figure 4). Pumped hydro offers an alternative to hydrogen large-scale, long-term storage; it currently accounts for more than 95% of global power storage (162 GW worldwide). However its remaining untapped potential is subject to local geographic conditions and limited to about 1% of annual global energy demand (0,3 EJ). This is not enough to handle seasonal demand differences. For instance in Germany energy demand is about 30% higher in winter then in summer, while renewable generation is typically 50% lower in winter then in summer (Figure 3).
At this point time, hydrogen remains a novel way to store energy, but more and more large, hydrogen-based storage demonstration projects are being planned, announced, or launched around the world-e.g., in Denmark, Canada, Japan, and the Asia Pacific region. In addition, underground storage of large volumes of hydrogen is well-established industry practice and does not present a major technological barrier. With an increasing share of renewable energy sources, the deployment of hydrogen as a long-term storage solution is expected to accelerate.As that happens, the cost of hydrogen storage is projected to decrease to €​ 140/MWh (power to power) in 2030 for hydrogen stored in salt caverns. This is even less than projected cost for pumped hydro storage (about €​ 400/MWh in 2030). In Germany the constrained potential for storage in caverns is about 37 billion cubic meters. This would be sufficient to store 110 TWhth hydrogen, covering the projected full seasonal storage need. 


All in all, hydrogen permits to integrate more economically large amounts of intermittent energy sources in the system and provides the much needed flexibility to maintain the resilience of the system.
2. Distribute energy across sectors and regions.
The power system will require distribution of renewable energy for several reasons. Some countries, such as Japan, are not well positioned to generate energy with wind or solar power alone. Other countries may need time to raise the necessary investments. In some cases, importing renewable energy might be more economical, e.g., bringing low-cost solar energy from sun-belt countries to less sunny regions. As hydrogen and its compounds have a high energy density and are easily transported, they will help to (re)distribute energy effectively and flexibly.
While transporting electricity over long distances can cause energy loses, pipeline transportation of hydrogen reaches almost 100% efficiency. This benefit makes hydrogen an economically attractive option when transporting renewable energy at scale and over large distances, e.g., from areas with high potential for renewable power generation, such as Middle East, to areas with high energy demand like Europe (Assuming double production costs for solar and wind electricity in the Netherlands compared with the solar and sun-belt regions, 2 ct/kWh electrolysis cost without electricity and 2,5 ct/kWh for the liquefied and transport of hydrogen). Import of hydrogen might serve as a long-term strategy, aimed and handling the rump-up period for the renewables or ensuring adequate energy supply during the winter, when renewable energy sources produce less electricity.
Japan planing to launch the first technical demonstration of the liquefied hydrogen carrier ship to enter international trade in 2020. Today, hydrogen pipelines and gaseous or liquefied tube trailers are the most common modes of transport. As the flow hydrogen increases, the cost for liquefaction and transport are expected to drop by 30 to 40% in the next 15 years. Use of existing gas grids to transport hydrogen has been tested but not applied at large scale. Leeds is the first city that has proposed to convert its gas grid into a hydrogen grid by 2026.
3. Act as a buffer to increase system resilience.
Hydrogen can help align global energy storage with changing energy demand. Its high energy density, long storage capacity, and variable uses makes hydrogen well suited to serve as an energy buffer and strategic reserve.
Today the energy system has backup capacity of about 90 EJ (24% of final annual energy consumption), held almost exclusively by fossil energy carriers. The hydrogen council sees no indication that the amount of buffering need could decrease significantly in the future.

But, as the consumers and the power sector switch to alternative energy carriers, the use of fossil fuels as backup might shrink, since this buffer serves only applications that can serve fossil fuels. The most efficient buffer would mix energy carriers that reflect (or could transform into) end-use applications. This mix would include fossil fuels, biofuels/biomass/synthetic fuels, and hydrogen.
4. Decarbonize transport.
Fuel cell electric vehicles (FCEVs) have an important role to play in decarbonizing transport. Today oil dominates the fuel mix that meets the world's transport needs. Gasoline and diesel account for 96% of total fuel consumption and 21% of global carbon emissions (Figure 5)


Efficient hybrid vehicles, like hybrid electric vehicles (HEVs) and plug-in hybrid electric vehicles (PHEVs) are already reducing vehicle emissions. However, fully decarbonizing transport will require deployment of zero-emission vehicles like hydrogen-powered FCEVs and battery electric vehicles (BEVs), or hybrid combinations thereof. Advances in technology and new trends in mobility (e.g., connected cars autonomous driving technology, and shared mobility) with influence relative levels of deployment and the transition speed. Both electric vehicle types make use of similar and complementary technologies and are specifically suited to serve different segments and costumers. Besides lowering CO2 emissions, both also support local air quality improvements and noise reductions.
FCEVs offer several significant benefits. Firstly they can drive long distance without needing to refuel (already more then 500 km), a feature highly valued be consumers. Secondly they refuel quickly (3 to 5 minutes), similar to current gasoline/diesel cars, which adds to consumers convenience. Thirdly, thanks to a much higher energy density of the hydrogen storage system(compared to batteries), the sensitivity of the FCEV power train cost and weight to the amount of the energy stored (kWh) is low. This increases its attractiveness and likelihood of adoption of vehicles that require significant energy storage (e.g., heavy load capacity and/or long range/heavy use). Lastly, FCEV infrastructure can build on existing gasoline distribution and retail infrastructure, creating cost advantages and preserving local jobs and capital assets.
FCEVs will emerge in all sectors. Considering the above indicated benefits, they will be especially important in decarbonizing passengers cars (e.g., medium to large cars,fleets and taxis), heavy-duty transportation, buses, and nonelectrified trains. Application of synthetic fuels made out of hydrogen to shipping and aviation is also being explored (Figure 6).


For passenger cars, total cost of ownership (TCO) for FCEVs is currently higher than for internal combustion engine (ICE) vehicles,while travel cost (hydrogen price per kilometer traveled) is already similar to the cost of HEVs in Japan. When FCEVs reach at-scale commercialization, we are confident that cost parity (from a TCO perspective) can be reached by 2025 for medium and large passengers cars. Selected car fleets and buses will reach cost parity even sooner, as their infrastructure rollout  tends to be simpler and thus cheaper.
Major automotive players are pursuing a dual solution for zero-emission products. Tree leading manufacturers are already offer commercially available FCEVs, while many others have announced the intention to launch their own FCEVs soon. FCEVs are starting to become commercially available, with more than a thousand vehicles already on the road in Japan and the US, and a few hundred in Europe. Several OEMs have FCEV production lines that can produce thousands of FCEV a year. By the early 2020s, a significant ramp-up is expected on OEMs will have the capacity to produce tens of thousands of commercially available passenger FCEVs a year. This is in line with several countries' ambitious FCEV deployment targets. China, for example, has set the goal of having 50 000 FCEVs on the road by 2025 and 1 million by 2030. Japan plans to deploy 200 000 FCEVs by 2025 and 0.8 million to 2030.
FCEVs start to penetrate mass and goods transport. While the current market share of FCEVs buses is still small. (~ 500 on roads around the world), recent investment show increasing momentum to shift mass transit to FCEVs solutions. For example, Lianyungang  Haitong Public Transport (China) plans for 1,500 FCEV buses, Europe has announce to deploy in total 600 to 1,000 FCEV buses by 2020 and South Korea plans to replace 27,000 CNG buses with FCEVs by 2030. The deployment of commercially heavy-duty vehicles is currently targeted by several OEMs. Germany announced recently that its first hydrogen trains will start running in 2017. FCEV trains are already cost competitive with diesel trains (from TCO perspective).
Leading Western and Asian countries are planning to roll out significant hydrogen infrastructure over the coming decade. In Europe the number of stations is expected to double biannually, with up to 400 stations in Germany alone by 2023, and California has set the goal having 100 stations by 2020. Japan already has more than 80 stations operating, and South Korea and China are planning to set up a hydrogen network, together aiming for 830 stations by 2025. The total targeted number of more than 3,000 stations in 2025 will be sufficient to provide hydrogen for about 2 million FCEVs. After this initial development phase, refueling infrastructure will be self-sustained.

5. Decarbonize industry energy use.
Today, natural gas, coal and oil provide energy for industrial processes and thus generate about 20% of global emissions. Industry needs to improve energy efficiency (including waste heat recovery), thus reducing the need for energy. Steam electrolysis technologies can help valorize waste heat into hydrogen. Industry also needs to decarbonize the source  of process heat, for both low-and high-grade heat.
Industry has many options for decarbonizing low-grade heat. While heat pumps and electric resistance heating offer advantages in certain geographic locations, hydrogen is clearly advantageous when it is available as a by-product of the chemical industry or when a specific industry need an uninterruptable power supply (as provided by a fuel cell), along with heat. A hydrogen can be combusted in hydrogen burners or be used in fuel cells, it offers a zero-emission alternative for heating. 

High-grade heat-above  400*C - is harder to decarbonize. Hydrogen burners can complement electric heating to generate high-grade heat, depending on local conditions: some regions might favor industrial use of hydrogen technologies instead of electricity, given the constraints they have in the design of their energy system.
Today, industry uses hydrogen in low-grade heat applications, such as process heating and drying. In the future, industry might also use mix of hydrogen burners and fuel cells to meet their low-and high-grate heat needs. Fuel cells have a higher efficiency than burners and simultaneously provide heat and power, but their deployment still requires significant investment. Burners,on their side, require only adjustment of existing equipment.
6. Serve as feedstock using captured carbon.
Hydrogen-based chemistry could serve as a carbon sink and complement or decarbonize parts of the petrochemical value chain. Today, crude oil (derivatives) are used as feedstock in the production of industrial chemicals, fuels, plastics, and pharmaceutical goods. Almost all of these products contain both carbon and hydrogen. If the application of carbon capture and utilization (CCU) technology takes off (as part of circular economy or an alternative to carbon storage), the technology will need (green) hydrogen to convert the captured carbon into usable chemicals like methanol, methane, formic acid, or urea.This use of hydrogen would make CCU viable alternative for other hand-to-decarbonize sectors like cement and steel production, and would contribute to the decarbonization of part of petrochemical value chain.
The use of hydrogen and captured carbon to produce chemical feedstocks is in the research and development phase, with initial pilot programs being launched. Iceland has an operational geothermal plant that uses geothermal CO2 and generated electricity to produce hydrogen and then methanol. This methanol production is stated to be cost-competitive with an electricity price of EUR 30/MWh; other local conditions might produce different results. Sweden has planned a similar project that will use carbon captured from iron ore processing. Germany is combining carbon from the steel production emissions with hydrogen from excess electricity to produce chemicals. The project is still in the concept phase and is expected to reach the scale in 15 years.
7. Help decarbonize building heating.
Heating and worm water supply account about 80% of residential energy consumption. About 50 EJ of energy is used for residential heating, responsible for 12% of global emissions. Hydrogen will be part of a portfolio of solutions for decarbonizing building heating. Local conditions will dictate the choice of options.
Building heating can use hydrogen as a fuel or leverage hydrogen technologies, or ideally a combination of both: hydrogen technologies such as fuel cell micro CHPs serve as energy converters. They offer high efficiency for heat and power generation (˃90%). Hydrogen itself can serve as a fuel (either pure or blended with gas, partially decarbonizing the gas grid). For houses connected to a natural gas grid, switching to hydrogen-combustion-based heating offers an opportunity to keep using the existing gas grid. With relatively small adjustments and investments, the grid can safely transport a mixture of hydrogen and natural gas. Full decarbonization requires a total switch to hydrogen as contemplated by UK gas grid operators in Leeds. 
On a global scale, about 190,000 buildings are already heated with hydrogen-based fuel cell micro CHPs. Most micro-CHPs (˃95%) are located in Japan, where about half run on methane combined with a reformer to produce hydrogen. The project has shown the ability of micro CHPs to meet heating requirements and supplement the electricity balance. By 2030 some 5,3 million Japanese households will use micro CHPs. Economies of scale have already cut prices more then 50%, from 2,4 USD/W installed in 2009 to 1 USD/W installed in 2014.

List of abbreviations 

BEV                                                              Battery electric vehicle
CCU                                                 Carbon capture and utilization
CHP                                                     Combined heat/power units
CNG                                                           Compressed natural gas
FCEV                                                          Fuel cell electric vehicle
HEV                                                               Hybrid electric vehicle
ICE                                                        Internal combustion engine
OEM                                           Original equipment manufacturer
PHEV                                               Plug-in hybrid electric vehicle
TCO                                                                 Total cost ownership

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