The Hydrogen Dilemma: An Industrial Site-specific Case Study on the Transformation Pathway Toward Renewable Hydrogen

Future renewable energy systems are expected to heavily rely on low-emission hydrogen, not least as a crucial feedstock for industry. Although there are numerous pan-European system studies exploring a cost-efficient hydrogen ramp-up, a number of issues are driving companies to develop site-specific transformation strategies, that are not always in line with the results of these large-scale studies. Addressing this gap, this study contributes a detailed analysis of a real-world chemical site in Southern Germany that depends on hydrogen as a feedstock. In doing so, insights in industry transformation options and its implications at site level are provided. Applying a cost-optimizing energy system model, several corporate strategies and extensive sensitivity analyses for the transition to renewable hydrogen are evaluated for the period 2025 to 2045. This involves considering onsite interdependencies between the production and use of hydrogen as a feedstock and the site’s electricity and heat sector. The results show that under a purely rational strategy and current expectations, the transformation to renewable hydrogen will not become competitive before 2045, while neither expensive emission allowances, nor low-priced hydrogen supply on their own will result in a substantially accelerated transformation. This highlights the need for additional policy measures. Furthermore, it is demonstrated that under almost any realistic condition within the following 20 years, using hydrogen for heat generation below 200 ◦C is unlikely. Therefore, prioritizing the electrification of process heat supply while waiting for hydrogen imports would be a logical approach for reducing greenhouse gas emissions.