Policy & Socio-Economics

This research qualitatively reviews literature regarding energy system modeling in Japan specific to the future hydrogen economy leveraging quantitative model outcomes to establish the potential future deployment of hydrogen in Japan. The analysis focuses on the four key sectors of storage supplementing the gas grid power generation and transportation detailing the potential range of hydrogen technologies which are expected to penetrate Japanese energy markets up to 2050 and beyond. Alongside key model outcomes the appropriate policy settings governance and market mechanisms are described which underpin the potential hydrogen economy future for Japan. We find that transportation gas grid supplementation and storage end-uses may emerge in significant quantities due to policies which encourage ambitious implementation targets investment in technologies and research and development and the emergence of a future carbon pricing regime. On the other hand for Japan which will initially be dependent on imported hydrogen the cost of imports appears critical to the emergence of broad hydrogen usage particularly in the power generation sector. Further the consideration of demographics in Japan recognizing the aging shrinking population and peoples’ energy use preferences will likely be instrumental in realizing a smooth transition toward a hydrogen economy.

This study seeks to answer a simple question: will we have enough renewable electricity to meet all of the EU's decarbonisation objectives and if not what should be the priorities and how to address the remaining needs for energy towards carbon neutrality? Indeed if not the policy push for green hydrogen would not be covered by enough green electricity to match the “energy efficiency and electrification first” approach outlined in the system integration communication and a prioritization of green electricity uses complemented by other solutions (import of green electricity or sustainable fuels CCS...) would be advisable [1]. On one hand we show that the principle “Energy efficiency and electrification first” results in an electricity demand which will be very difficult to satisfy domestically with renewable energy. On the other hand green hydrogen and other sustainable fuels will be needed for a carbon neutral industry for the replacement of the fuel for aviation and navigation and as strategic green energy reserves. The detailed modelling of these interactions is challenging given the large uncertainties on technology and infrastructure development. Therefore we offer a “15 minutes” decarbonization scenario based on general and transparent technical considerations and very straightforward “back-of-envelope” calculations. This working paper contains the calculations and assumptions in support of the accompanying policy brief with the same title which focuses instead on the main take-aways.

This study analyzes the factors leading to the deployment of Power-to-Hydrogen (PtH₂) within the optimal design of district-scale Multi-Energy Systems (MES). To this end we utilize an optimization framework based on a mixed integer linear program that selects sizes and operates technologies in the MES to satisfy electric and thermal demands while minimizing annual costs and CO₂ emissions. We conduct a comprehensive uncertainty analysis that encompasses the entire set of technology (e.g. cost efficiency lifetime) and context (e.g. economic policy grid carbon footprint) input parameters as well as various climate-referenced districts (e.g. environmental data and energy demands) at a European-scope.

Minimum-emissions MES with large amounts of renewable energy generation and high ratios of seasonal thermal-to-electrical demand optimally achieve zero operational CO₂ emissions by utilizing PtH₂ seasonally to offset the long-term mismatch between renewable generation and energy demand. PtH₂ is only used to abate the last 5–10% emissions and it is installed along with a large battery capacity to maximize renewable self-consumption and completely electrify thermal demand with heat pumps and fuel cells. However this incurs additional cost. Additionally we show that ‘traditional’ MES comprised of renewables and short-term energy storage are able to decrease emissions by 90% with manageable cost increases.

The impact of uncertainty on the optimal system design reveals that the most influential parameter for PtH2 implementation is (1) heat pump efficiency as it is the main competitor in providing renewable-powered heat in winter. Further battery (2) capital cost and (3) lifetime prove to be significant as the competing electrical energy storage technology. In the face of policy uncertainties a CO₂ tax shows large potential to reduce emissions in district MES without cost implications. The results illustrate the importance of capturing the dynamics and uncertainties of short- and long-term energy storage technologies for assessing cost and CO₂ emissions in optimal MES designs over districts with different geographical scopes.

Limiting cumulative carbon emissions to keep global temperature increase to well below 2°C (and as low as 1.5°C) is an extremely challenging task requiring rapid reduction in the carbon intensity of all sectors of the economy and with limited leeway for residual emissions. Addressing residual emissions in ‘challenging-to-decarbonise’ sectors such as the industrial and aviation sectors relies on the development and commercialization of innovative advanced technologies currently still in their infancy. The aim of this study was to (a) explore the role of advanced technologies in achieving deep decarbonisation of the energy system and (b) provide technology- specific details of how rapid and deep carbon intensity reductions can be achieved in the energy demand sectors. This was done using TIAM-Grantham – a linear cost optimization model of the global energy system with a detailed representation of demand-side technologies. We find that the inclusion of advanced technologies in the demand sectors together with energy demand reduction through behavioural changes enables the model to achieve the rapid and deep decarbonisation of the energy system associated with limiting global warming to below 2°C whilst at the same time reduces reliance on negative emissions technologies by up to ∼18% compared to the same scenario with a standard set of technologies. Realising such advanced technologies at commercial scales as well as achieving such significant reductions in energy demand represents a major challenge for policy makers businesses and civil society. There is an urgent need for continued R&D efforts in the demand sectors to ensure that advanced technologies become commercially available when we need them and to avoid the gamble of overreliance on negative emissions technologies to offset residual emissions.

The aim of this study is to identify the technical solution space for future fully renewable energy systems that stays within a sustainable biomass demand. In the transition towards non-fossil energy and material systems biomass is an attractive source of carbon for those demands that also in the non-fossil systems depend on high density carbon containing fuels and feedstocks. However extensive land use is already a sustainability challenge and an increase in future demands threat to exceed global sustainable biomass potentials which according to an international expert consensus is around 10 – 30 GJ/person/year in 2050. Our analytical review of 16 scenarios from 8 independent studies of fully renewable energy system designs and synthesis of 9 generic system designs reveals the significance of the role of electrification and hydrogen integration for building a fully renewable energy system which respects the global biomass limitations. The biomass demand of different fully renewable energy system designs was found to lie in the range of 0 GJ/person/year for highly integrated electrified pure electro-fuel scenarios with up to 25 GJ/person/year of hydrogen to above 200 GJ/person/year for poorly integrated full bioenergy scenarios with no electrification or hydrogen integration. It was found that a high degree of system electrification and hydrogen integration of at least 15 GJ/person/year is required to stay within sustainable biomass limits.

As transitioning away from fossil fuels to renewable energy sources comes on the agenda for a range of energy systems energy modelling tools can provide useful insights. If large parts of the energy system turns out to be based on variable renewables an accurate representation of their short-term variability in such models is crucial. In this paper we have developed a stochastic long-term energy model and applied it to an isolated Arctic settlement as a challenging and realistic test case. Our findings suggest that the stochastic modelling approach is critical in particular for studies of remote Arctic energy systems. Furthermore the results from a case study of the Norwegian settlement of Longyearbyen suggest that transitioning to a system based on renewable energy sources is feasible. We recommend that a solution based mainly on renewable power generation but also including energy storage import of hydrogen and adequate back-up capacity is taken into consideration when planning the future of remote Arctic settlements.

This work investigates the connection between electrification of the industry transport and heat sector and the integration of wind and solar power in the electricity system. The impact of combining electrification of the steel industry passenger vehicles and residential heat supply with flexibility provision is evaluated from a systems and sector perspective. Deploying a parallel computing approach to the capacity expansion problem the impact of flexibility provision throughout the north European electricity system transition is investigated. It is found that a strategic collaboration between the electricity system an electrified steel industry an electrified transport sector in the form of passenger electric vehicles (EVs) and residential heat supply can reduce total system cost by 8% in the north European electricity system compared to if no collaboration is achieved. The flexibility provision by new electricity consumers enables a faster transition from fossil fuels in the European electricity system and reduces thermal generation. From a sector perspective strategic consumption of electricity for hydrogen production and EV charging and discharging to the grid reduces the number of hours with very high electricity prices resulting in a reduction in annual electricity prices by up to 20%.

This discussion paper is for stakeholders who would like to shape the development of Victoria’s emerging green hydrogen sector identifying competitive advantages and priority focus areas for industry and the Victorian Government.<br/>The Victorian Government is using this paper to focus on the economic growth and sector development opportunities emerging for a Victorian hydrogen industry powered by renewable energy also known as ‘green’ hydrogen. In addition this paper seeks input from all stakeholders on how where and when the Victorian Government can act to establish a thriving green hydrogen economy.<br/>Although green hydrogen is the only type of hydrogen production within the scope of this discussion paper the development of the VHIP aligns with the policies projects and initiatives which support these other forms of hydrogen production. The VHIP is considering the broad policy landscape and actively coordinating with related hydrogen programs policies and strategies under development including the Council of Australian Governments (COAG) Energy Council’s National Hydrogen Strategy to ensure a complementary approach. In Victoria there are several programs and strategies in development and underway that have linkages with hydrogen and the VHIP.

In this study we model seven scenarios for the European power system in 2050 based on 100% renewable energy sources assuming different levels of future demand and technology availability and compare them with a scenario which includes low-carbon non-renewable technologies. We find that a 100% renewable European power system could operate with the same level of system adequacy as today when relying on European resources alone even in the most challenging weather year observed in the period from 1979 to 2015. However based on our scenario results realising such a system by 2050 would require: (i) a 90% increase in generation capacity to at least 1.9 TW (compared with 1 TW installed today) (ii) reliable cross-border transmission capacity at least 140GW higher than current levels (60 GW) (iii) the well-managed integration of heat pumps and electric vehicles into the power system to reduce demand peaks and biogas requirements (iv) the implementation of energy efficiency measures to avoid even larger increases in required biomass demand generation and transmission capacity (v) wind deployment levels of 7.5GWy−1 (currently 10.6GWy−1) to be maintained while solar photovoltaic deployment to increase to at least 15GWy−1 (currently 10.5GWy−1) (vi) large-scale mobilisation of Europe’s biomass resources with power sector biomass consumption reaching at least 8.5 EJ in the most challenging year (compared with 1.9 EJ today) and (vii) increasing solid biomass and biogas capacity deployment to at least 4GWy−1 and 6 GWy−1 respectively. We find that even when wind and solar photovoltaic capacity is installed in optimum locations the total cost of a 100% renewable power system (∼530 €bn y−1) would be approximately 30% higher than a power system which includes other low-carbon technologies such as nuclear or carbon capture and storage (∼410 €bn y−1). Furthermore a 100% renewable system may not deliver the level of emission reductions necessary to achieve Europe’s climate goals by 2050 as negative emissions from biomass with carbon capture and storage may still be required to offset an increase in indirect emissions or to realise more ambitious decarbonisation pathways.

The technological lock-in of the transportation and industrial sector can be largely attributed to the limited availability of alternative fuel infrastructures. Herein a countrywide supply chain analysis of Germany spanning until 2050 is applied to investigate promising infrastructure development pathways and associated hydrogen distribution costs for each analyzed hydrogen market. Analyzed supply chain pathways include seasonal storage to balance fluctuating renewable power generation with necessary purification as well as trailer- and pipeline-based hydrogen delivery. The analysis encompasses green hydrogen feedstock in the chemical industry and fuel cell-based mobility applications such as local buses non-electrified regional trains material handling vehicles and trucks as well as passenger cars. Our results indicate that the utilization of low-cost long-term storage and improved refueling station utilization have the highest impact during the market introduction phase. We find that public transport and captive fleets offer a cost-efficient countrywide renewable hydrogen supply roll-out option. Furthermore we show that at comparable effective carbon tax resulting from the current energy tax rates in Germany hydrogen is cost-competitive in the transportation sector by the year 2025. Moreover we show that sector-specific CO2 taxes are required to provide a cost-competitive green hydrogen supply in both the transportation and industrial sectors.