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European green hydrogen supply sufficient to meet demand in 2040: report

Highlights

2030 supply could be 450 TWh, 2,100 TWh in 2040

Europe to rely on imports in the short term

Pipeline costs 11-21 euro cent/kg per 1,000 km

European green hydrogen supply could be enough to meet the continent's demand for the renewable gas by 2040, a new study from the European Hydrogen Backbone initiative said June 15.

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The EHB report, "Analyzing future demand, supply, and transport of hydrogen," found that the potential domestic European renewable and low-carbon hydrogen supply was "vast and exceeds what would be needed to meet projected European hydrogen demand in all sectors" and for a lower cost than conventional fossil fuel derived hydrogen plus the CO2 price.

Renewable and low-carbon hydrogen demand in 2030 would primarily come from the ammonia sector, alongside demand for steel production and industrial process heat, the report from the group of transmission system operators said.

"Domestic green hydrogen supply potential in the EU and UK from dedicated renewables is estimated to be 450 TWh in 2030, 2,100 TWh in 2040, and 4,000 TWh in 2050," it said.

A massive expansion of solar and wind power generation capacity was needed, in addition to increased demand for direct electrification, it said. The report identified a need for a cumulative 1,900 GW of renewables in 2030, which implies a doubling of current National Energy and Climate Plan targets.

The renewables capacity needed would rise to 3,200 GW in 2040 and 4,500 GW in 2050, it said.

The EHB initiative report estimated hydrogen demand could reach 2,300 TWh (213 Bcm) in 2050 across the EU and UK, representing 20-25% of final energy consumption.

"By 2050, almost all of the potential 4,000 TWh of green hydrogen can be produced for less than Eur2/kg, of which up to 2,500 TWh can be produced below Eur1.5/kg and around 600 TWh produced at Eur1/kg or less," the report said. "Supplying the entire projected 2,300 TWh hydrogen demand in 2050 would require around 2,900-3,800 TWh of dedicated renewable electricity."

The EHB aims to link hydrogen production, distribution and demand centers across Europe with a network of nearly 40,000 km of pipelines connecting 19 EU countries, and the UK and Switzerland.

It sees the backbone initiative as critical to balancing out regional supply, demand and price imbalances.

The report said Europe's potential for producing blue hydrogen from natural gas with CCS was "virtually unlimited," with gas supply and carbon storage potential outstripping foreseen demand.

Blue hydrogen could be produced at Eur1.4-1.9/kg at "moderate natural gas and CO2 prices, but could rise to Eur2.0-2.3/kg during the 2030s and 2040s" as CO2 rises further. Countries with natural gas production could reduce hydrogen production costs to Eur1/kg.

S&P Global Platts assessed the cost of producing hydrogen via alkaline electrolysis in the Netherlands (including capex) at Eur4.56/kg ($5.53/kg) June 14. PEM electrolysis production was assessed at Eur5.70/kg, while blue hydrogen production by steam methane reforming (including carbon, CCS and capex) was Eur2.37/kg.

Platts assessed the cost of producing hydrogen via alkaline electrolysis in the UK (including capex) at GBP4.60/kg ($6.48/kg). PEM electrolysis production was assessed at GBP5.69/kg, while blue hydrogen production by autothermal reforming was GBP1.80/kg (including capex, CCS and carbon).

Import potential

The rollout of European green hydrogen projects was subject to wider public acceptance for projects, the EHB report said, and low transport costs plus a potential short-term shortfall in supply meant Europe was likely to import significant volumes of hydrogen.

Retrofitting existing pipelines is by far the lowest cost hydrogen transport solution, with a cost of 11-21 euro cent/kg per 1,000 km, the EHB said. Transport by ship from North Africa and Saudi Arabia was three to five times more expensive.

However, "by 2030, even under modest flows, countries with low domestic hydrogen supply potential compared to their expected demand [such as] Germany and Belgium will need to import hydrogen to meet national requirements," the report said, with pipeline supplies from North Africa, Ukraine and Norway benefitting from low levelized costs of hydrogen production from cheap solar and wind by 2040.

Storage need

Underground storage was an integral part of the European hydrogen backbone project, Uniper Hydrogen CEO and president of Gas Storage Europe Axel Wietfeld said at an event to launch the report.

The supply profile to 2030 was variable, with a mix of intermittent green hydrogen production and steady supplies from blue hydrogen facilities, while the demand profile – largely from industrial end-users and for synthetic fuel production – was fairly flat, he said, underlining the need for storage to balance the market.

However, after 2030, demand peaks could emerge as the power and heating sectors connected to hydrogen, further underpinning the need for storage for surplus production and to feed peak demand.