London — Hydrogen's future role as a commodity in Europe will require a massive scaling-up of projects and technology, with governments needing to play their part in stimulating demand, panelists from industry, government and the investment community said in an IPHE panel discussion Dec. 3.
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The buzz around hydrogen comes chiefly from clean energy ambitions, and its versatility, said Fatih Birol, executive director of the International Energy Agency, at the International Partnership for Hydrogen and Fuel Cells in the Economy-hosted forum.
"To reach 2050 net-zero goals, hydrogen needs to increase sevenfold from today," Birol said. "That would give hydrogen a 10%-15% share of total energy consumption."
Turning hydrogen into a new global commodity will involve a total system transformation, Shell New Energies executive VP Elisabeth Brinton said.
"You have to have the demand-side incentivized," said Brinton, noting how Shell's 10 MW Rheinland Refinery electrolyser project would both decarbonize the refining process, but also deliver intermittent renewable power to help balance the grid. "You can only push so far."
Creating a market for hydrogen means creating a value for carbon and, ultimately, switching on the larger-scale projects, Adamo Screnci, Total's VP Clean Hydrogen Business Unit, said.
"Gigawatt capacity is not an issue. It is not a big deal if you have the demand," Screnci said. "The costs will go down."
Getting projects up to scale and securing funding will be the easy part, Screnci said. Executing and implementing the long-term strategy and finding value in the long-term will be the real challenge.
On the government side, spending money along the value chain and creating policies aimed at stimulating demand will be critical for delivering results promised in far-reaching strategies, said Andreas Feicht, state secretary for energy of the German Federal Ministry for Economic Affairs and Energy.
Following the launch of its hydrogen strategy in June, Germany's objective is to establish a domestic market with Eur7 billion ($8.5 billion) of its strategy aimed at establishing a domestic market based on renewable hydrogen sources.
Roughly 40% of the money will go to capacities to produce green hydrogen via electrolysers from renewable sources, Feicht said.
Other money will be spent on infrastructure, including shifting existing gas pipelines to accommodate hydrogen, along with money spent on the offtake side with the steel and mobility sectors all needing technological help to stimulate hydrogen demand.
"We have to bring the costs down of electrolysers, and to help achieve scaling effects to reach 5 GW by 2030 and another 5 GW by 2035," Feicht said.
"Green hydrogen is the only sustainable solution the long term. Other options like blue and turquoise will play a role in German and EU markets, but they have to be greenhouse gas neutral."
Global trading perspective
From a global trade perspective, moving hydrogen around the world involves building a solid certification scheme, based on measurable emissions and hydrogen as a commodity, said Alan Finkel, the Australian government's chief scientist.
A certification scheme would allow comfortable trade between nations, Finkel said. "We have to get beyond the color definition of hydrogen. The only thing that counts is atmospheric emissions. Nothing else matters."
Several countries are already building trade flows, including Australia, Japan and Saudi Arabia.
The Middle East is still in the early stage of development, and not at the stage of Australia as an export market or Europe as a user, said Robin Mills, CEO of Qamar Energy.
Three countries -– Oman, Saudi Arabia and the UAE -– all have serious hydrogen ambitions, Mills said.
Air Products and Acwa Power's NEOM project in Saudi Arabia has an "exceptional cost profile that has helped it move forward", Mills said.
Other parts of the region are not as well situated.
"Solar does not get you the load factor on electrolysers – you need a combination of solar and wind," he said.