Policy & Socio-Economics

Hydrogen has seen unprecedented development in the year 2020. From innovative niche technology it is fast becoming a systemic element in the European Union’s (EU) efforts to transition to a climate-neutral society in 2050. It will become a crucial energy vector and the other leg of the energy transition – alongside renewable electricity – by replacing coal oil and gas across different segments of the economy. The rapid development of hydrogen is important for meeting the EU’s climate objectives and preserving and enhancing the EU’s industrial and economic competitiveness securing jobs and value creation in this high-tech sector.

Europe is currently leading in hydrogen technology and European companies and knowledge institutions can be instrumental in advancing technological developments and industrial scale-up. It is imperative that Europe maintains this leadership position and seizes the current momentum for hydrogen technologies. The EU is well placed to become the birthplace of a global hydrogen economy denominated in Euro currency.

It is time that hydrogen moves from an afterthought to a central pillar of the energy system. The “Fit for 55 Package” presents a unique opportunity to begin putting into place a concrete and fit for purpose framework for the development of a clean hydrogen economy. In this paper you will find Hydrogen Europe’s recommendations on how hydrogen can:

• Unleash the potential of renewables.
• Bring “efficiency” to the energy “system” of the future.
• Enable a carbon-neutral transport system.

To limit the global temperature change to no more than 2 ◦C by reducing global emissions the European Union (EU) set up a goal of a 20% improvement on energy efficiency a 20% cut of greenhouse gas emissions and a 20% share of energy from renewable sources by 2020 (10% share of renewable energy (RE) specifically in the transport sector). By 2030 the goal is a 27% improvement in energy efficiency a 40% cut of greenhouse gas emissions and a 27% share of RE. However the integration of RE in energy system faces multiple challenges. The geographical distribution of energy supply changes significantly the availability of the primary energy source (wind solar water) and is the determining factor rather than where the consumers are. This leads to an increasing demand to match supply and demand for power. Especially intermittent RE like wind and solar power face the issue of energy production unrelated to demand (issue of excess energy production beyond demand and/or grid capacity) and forecast errors leading to an increasing demand for grid services like balancing power. Megawatt electrolyzer units (beyond 3 MW) can provide a technical solution to convert large amounts of excess electricity into hydrogen for industrial applications substitute for natural gas or the decarbonization of the mobility sector. The demonstration of successful MW electrolyzer operation providing grid services under dynamic conditions as request by the grid can broaden the opportunities of new business models that demonstrate the profitability of an electrolyzer in these market conditions. The aim of this work is the demonstration of a technical solution utilizing Pressurized Alkaline Electrolyzer (PAE) technology for providing grid balancing services and harvesting Renewable Energy Sources (RES) under realistic circumstances. In order to identify any differences between local market and grid requirements the work focused on a demonstration site located in Austria deemed as a viable business case for the operation of a largescale electrolyzer. The site is adapted to specific local conditions commonly found throughout Europe. To achieve this this study uses a market-based solution that aims at providing value-adding services and cash inflows stemming from the grid balancing services it provides. Moreover the work assesses the viability of various business cases by analyzing (qualitatively and quantitatively) additional business models (in terms of business opportunities/energy source potential grid service provision and hydrogen demand) and analyzing the value and size of the markets developing recommendations for relevant stakeholder to decrease market barriers.

Sustainability transportation is characterized by a positive externality on the environment health social security land use and social inclusion. The increasing interest in global warming has caused attention to be paid to the introduction of the hydrogen bus (H2B). When introducing new environmental technologies such as H2B it is often necessary to assess the environmental benefits related to this new technology. However such benefits are typically non-priced due to their public good nature. Therefore we have to address this problem using the contingent valuation (CV) method. This method has been developed within environmental economics as a means to economically assess environmental changes which are typically not traded in the market. So far several big cities have been analyzed to evaluate the perceived benefit related to H2B introduction but to the best of our knowledge no one has performed a CV analysis of a historical city where smog also damages historical buildings. This paper presents the results obtained using a multi-wave survey. We have investigated user preferences to elicit their willingness to pay for H2B introduction in Perugia taking into account all types of negative externalities due to the traffic pollution. The results confirm that residents in Perugia are willing to pay extra to support the introduction of H2B.

This Energy Insight examines the current regulatory framework and challenges facing the natural gas industry (producers transporters suppliers and consumers) during the transition to a zero-carbon economy.  The EU has declared its intention to be climate neutral by 2050 which means that the current level of natural gas usage will no longer be possible. However natural gas is a crucial component of energy supply representing 24 per cent of primary energy supply for the EU27+UK and 36 per cent of residential energy consumption. In some countries the use of natural gas is much higher – around 40 per cent of primary energy supply in Netherlands UK and Italy. The current framework impacting gas addresses two different market failures – natural monopolies for gas transportation and the externalities of Greenhouse Gas Emissions. The framework will not deliver decarbonisation of gas as it does not stimulate either supply or demand for alternatives such as hydrogen nor create the conditions to enable gas networks to transition to a decarbonised future. Policy makers need to prioritise their objectives to take account of the trade-offs involved in designing a new framework. Exclusion of certain low carbon technologies risks driving away investors and reduces the chances of targets being met whilst “picking winners” involves risks because of the many uncertainties involved such as future costs and time required to build new value chains.

Link to Document on Oxford Institute for Energy Studies website

Hydrogen can be used for a variety of domestic and industrial purposes such as heating and cooking (as a replacement for natural gas) transportation (replacing petrol and diesel) and energy storage (by converting intermittent renewable energy into hydrogen). The key benefit of using hydrogen is that it is a clean fuel that emits only water vapour and heat when combusted.



To support implementation of the National Hydrogen Strategy Geoscience Australia in collaboration with Monash University are releasing the Hydrogen Economic Fairways Tool (HEFT).  HEFT is a free online tool designed to support decision making by policymakers and investors on the location of new infrastructure and development of hydrogen hubs in Australia. It considers both hydrogen produced from renewable energy and from fossil fuels with carbon capture and storage.



This seminar demonstrates HEFT’s capabilities its potential to attract worldwide investment into Australia’s hydrogen industry and what’s up next for hydrogen at Geoscience Australia.



You can use the Hydrogen Economic Fairways Tool (HEFT) on the Website of the Australian government at the link here

Hydrogen produced from renewables works as an energy carrier and as energy storage medium and thus hydrogen can help to overcome the intermittency of typical renewable energy sources. However there is no comprehensive environmental performance study of hydrogen production and consumption. In this study detailed cradle to grave life cycle analyses are performed in an isolated territory. The hydrogen is produced on-site by Polymer Electrolyte Membrane (PEM) water electrolysis based on electricity from wind turbines that would otherwise have been curtailed and subsequently transported with gas cylinder by road and ferry. The hydrogen is used to provide electricity and heat through fuel cell stacks as well as hydrogen fuel for fuel cell vehicles. In order to evaluate the environmental impacts related to the hydrogen production and utilisation this work conducts an investigation of the entire life cycle of the described hydrogen production transportation and utilisation. All the processes related to the equipment manufacture operation maintenance and disposal are considered in this study.

Outline

This independent report by Vivid Economics and University College London was commissioned to support the Climate Change Committee’s (CCC) 2020 report The Sixth Carbon Budget -The path to Net Zero. This research provided supporting information for Chapter 7 of the CCC’s report which considered the UK’s contribution to the global goals of the Paris Agreement.

Key recommendations

The report models ‘leadership-driven’ global scenarios that could reduce global emissions rapidly to Net Zero and analyses the levers available to developed countries such as the UK to help accelerate various key aspects of the required global transition.

It highlights a set of opportunities for the UK alongside other developed countries to help assist global decarbonisation efforts alongside achieving it’s domestic emissions reduction targets

This study seeks to find the appropriate strategies necessary to make sustainable and effective hydrogen energy investments. Within this scope nine different criteria are defined regarding social managerial and financial factors. A hesitant interval-valued intuitionistic fuzzy (IVIF) decision-making trial and evaluation laboratory (DEMATEL) methodology is considered to calculate the degree of importance of the criteria. Additionally impact relation maps are also generated to visualize the causality relationship between the factors. The findings indicate that the technical dimension has the greatest importance in comparison to managerial and financial factors. Furthermore it is also concluded that storage and logistics research and development and technological infrastructure are the most significant factors to be considered when defining hydrogen energy investment strategies. Hence before investing in hydrogen energy necessary actions should be taken to minimize the storage and logistic costs. Among them building the production site close to the usage area will contribute significantly to this purpose. In this way possible losses during the transportation of hydrogen can be minimized. Moreover it is essential to identify the lowest-cost hydrogen storage method by carrying out the necessary research and development activities thereby increasing the sustainability and effectiveness of hydrogen energy investment projects.

The present work investigates Power-to-Gas (PtG) options for variable Renewable Electricity storage into hydrogen through low temperature (alkaline and PEM) and high-temperature (SOEC) water electrolysis technologies. The study provides the assessment of the cost of the final product when hydrogen is employed for mobility (on-site refueling stations) electricity generation (by fuel cells in Power-to-Power systems) and grid injection in the natural gas network. Costs estimations are performed for 2013-2030 scenarios. A case study on the impact of variable Renewable Electricity storage by hydrogen generation on the Italian electricity and mobility sectors is presented.

Of all the sectors in the UK decarbonising heat remains one of the most challenging. Heat used for industrial domestic and commercial purposes generates around a third of all UK carbon emissions 70% of which is due to burning natural gas. In order to meet our legally binding national climate change targets unabated natural gas use for heat must be phased out. Low carbon gas - including hydrogen and biogases - is one option to replace it. The Future Gas Series examines the opportunities and challenges associated with using low carbon gas to help decarbonise the UK economy.<br/><br/>This is the second report in the three-part Future Gas Series. Part 1: Next Steps for the Gas Grid explored the potential to decarbonise the existing gas grid. The report Part 2: the Production of Low Carbon Gas focuses on the issues related to the production of low carbon gas. It considers the different production technologies the potential scale of deployment of each method and the potential feedstocks. It also discusses issues related to bulk transport and storage of gas. Put together from expert evidence from across industry and academia it provides a balanced guide for policy makers in this area. It was a co-chaired by James Heappey MP (Conservative) Alan Whitehead MP (Labour) and Alistair Carmichael MP (SNP).<br/><br/>Carbon Connect suggests that biogases- such as biomethane and bioSNG- provide low regrets opportunities in the near term to provide low carbon heat and could also potentially make use of waste that would otherwise go to landfill.  However they require further support to allow them to continue contributing to decarbonising the UK economy. Hydrogen could provide huge decarbonisation opportunities and has applications across the energy system from putting hydrogen in the gas grid to be burnt for heat in homes to hydrogen buses and trains. However to realise this potential a market for hydrogen must be built up. This should incentivise business to invest in hydrogen technologies reward those who use hydrogen and build up hydrogen infrastructure.<br/><br/>