HP March 2022 eBook—Energy Transition - 126

REGIONAL REPORT: EUROPE
producing, using, storing and
transporting green molecules
* A significant scale-up in
renewable power capacities
* Necessary, further reductions
in H2
production costs.
The price of decarbonization. In line
with its net-zero carbon goal, the EU plans
to prioritize green H2
from wind and solar energy. Over the
short-term and medium-term, however,
blue H2
emissions from existing gray H2
will be needed to rapidly reduce
c production
and support the parallel and future
development of green H2
production.
Feeling blue? The success of blue
H2 use will be largely dictated by prices
for both carbon capture and natural gas.
At present, the cost of producing blue
H2
-capture equipment decreases, blue
H2 production costs are anticipated to fall
increases in parallel with increasing
rates of CO2 capture (FIG. 1); however,
as infrastructure expands and the cost of
CO2
over the next decade. A transition from
steam methane reforming (SMR) to autothermal
reforming (ATR), which combines
process and combustion emissions,
could push the cost of blue H2
to $1.25/kg (€1.05/kg) of H2
production
by 2030.
At present, carbon capture and storage
typically adds $50/t (€42/t) of CO2
tured to the cost of producing blue H2
$0.25/kg (€0.21/kg) of H2
gray H2. If less concentrated CO2
tured from exhaust gases, this adds $0.40/
kg (€0.33/kg) of H2
ditionally, natural gas prices are forecast
to increase, which could drive up costs
for blue H2
to the cost of blue
.2
Adcap,
or
to the cost of
is capH2,
with an emissions abatement cost of
more than $100/t (€83/t) of CO2
production by nearly 60% by
2040, according to Wood Mackenzie.3
Seeing green. Conversely, Wood
Mackenzie predicts that green H2
production
costs could fall by as much as
64% by 2040 with greater utilization
and reduced renewable power prices, at
which time the cost of green H2
the cost of fossil-based H2.3
will equal
In some European
countries with numerous green
H2
projects, such as Germany, green H2
costs will be at or near parity with fossil
H2
costs closer to 2030.
Costs for electrolyzers for green H2
production are expected to decrease by
50% between 2020 and 2030 with improved
economies of scale, after already
decreasing by 60% between 2010 and
2020. By 2050, electrolyzer costs may
decline by as much as 90% from presentday
price levels. This anticipated cost decrease
and manufacturing scale-up will
allow green H2
in areas where renewable
power is inexpensive to compete with
fossil-based H2
by the start of the next
decade. It will also aid the EU's effort to
install 40 GW of electrolyzer capacity to
produce up to 10 metric MMt of renewable
H2
in the EU by 2030.1
Between 2030 and 2050, renewable
H2 technologies should reach maturity
and be deployed at large scale in the EU
to reach all difficult-to-decarbonize sectors.
In this period, renewable electricity
production must be massively increased,
since nearly 25% of renewable electricity
could be dedicated for renewable H2
production by 2050.
Expansion of H2
As H2
expands, H2
markets in Europe.
infrastructure and production
will find application in a
number of new areas. It can be used to
decarbonize steelmaking and mining
operations, as well as for fuel in truck,
rail, marine and other transportation
modes. Green H2
can be stored as backup
power for renewables-based energy
grids, providing flexibility and reliability
of supply.
Furthermore, with some retooling of
infrastructure, H2
also can be used in residential
and commercial heating, which
accounts for a large amount of CO2
H2Tech | Q1 2021 | H2-Tech.com
emissions
in cold climates. A demonstration
project in Fife, Scotland will heat 300
homes from late 2022-March 2027 with
100% green H2
from a purpose-built H2
system. Offshore wind energy will be
used to power the electrolyzer to produce
the H2
boilers.
for the H100 Fife project.
Other pilot projects are ongoing to analyze
the potential to replace natural gas
boilers with H2
The creation of new end-use markets
is key to scaling up the production of H2
.
A primary market is industrial applications.
In industry, one of the most immediate
applications for low-carbon H2
reduce and replace the use of emissionsintensive
gray H2
substitution, some blue H2
tiatives are seen in Europe.
Blue H2
in refineries. Although
most project announcements within
the last couple of years have focused on
green H2
ini:
A bridge to green. The
EU's Hydrogen Strategy estimates
that carbon prices would need to be
€55/metric t-€90/metric t of CO2
make blue H2
to
competitive with gray H2
today. However, the strategy also notes,
" ...the further retrofitting of existing fossil-based
hydrogen production with carbon
capture should continue to reduce
greenhouse gas and other air pollutant
emissions in view of the increased 2030
climate ambition. " 1
In light of this provision, some European
countries have taken steps to incorporate
fossil-based and blue H2
into their
is to
production, mainly
2
3
4
5
6
7
1
SMR,
no CCUS
SMR,
53% CCUS
SMR,
89% CCUS
2020
Electrolysis
via solar
Electrolysis
via wind
ATR,
≥ 90% CCUS
FIG. 1. Present and projected costs for different types of H2
Electrolysis
via renewable
energy
2030
production, 2020-2050.
Note: Gray H2 and blue H2 assume a natural gas price of $3.50/MMBtu.2
Electrolysis
via renewable
energy
2050
$/kg of H2, 2019
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HP March 2022 eBook—Energy Transition

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