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DECARBONISING END-USE SECTORS:

PRACTICAL INSIGHTS

ON GREEN HYDROGEN

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ISBN: 978-92-9260-346-5

Citation: IRENA Coalition for Action (2021), Decarbonising end-use sectors: Practical insights on green hydrogen,

International Renewable Energy Agency, Abu Dhabi.

About the Coalition

The IRENA Coalition for Action brings together leading renewable energy players from around the world with the

common goal of advancing the uptake of renewable energy. The Coalition facilitates global dialogues between

public and private sectors to develop actions to increase the share of renewables in the global energy mix and

accelerate energy transitions.

About this paper

This white paper has been developed jointly by members of the Coalition’s Working Group on Decarbonising End-

Use Sectors. Featuring several case studies on pioneering green hydrogen projects and ﬁrst-hand interviews,

the paper provides insights from a renewable energy industry perspective on the growth opportunities of green

hydrogen and what is needed from policy makers to accelerate its adoption worldwide.

Acknowledgements

Contributing authors: Elvira López Prados, Andrea Real Ruiz (ACCIONA), Marta Martinez Sanchez (Iberdrola),

Magnus Hornø Gottlieb (Ørsted), Tomas Kåberger (Renewable Energy Institute), Jesse Fahnestock (former

World Wide Fund for Nature), and Stephanie Weckend, Emma Åberg, Kelly Tai and Anindya Bhagirath under the

supervision of Rabia Ferroukhi (IRENA).

Further acknowledgements: Va l u a b l e r e v i ew a n d f e e d b a c k we re p rov i d e d b y D a n i e l Ze l ce r ( A c a c i a Su s t a in a b i l i t y),

Cornelius Matthes, Paul van Son (Dii Desert Energy), Silvia Piana (Enel Green Power), Cristina Simioli (Renewables

Grid Initiative), Hannah Murdock (REN21), Aidan Cronin (Siemens Gamesa Renewable Energy), Nicolas Gogerty

(SolarCoin Foundation), Caroline Amblard (World Business Council for Sustainable Development), Jonny Sultoon

(Wood Mackenzie), Kajol (World Resources Institute), and Emanuele Bianco and Herib Blanco (IRENA).

The IRENA Coalition for Action would like to express special thanks and gratitude to the individuals interviewed

for the case studies in this paper, including Juan Pedro Yllanes (Vice-President of the Government of the Balearic

Islands), Rafael Mateo Alcalá (ACCIONA), David Herrero (Fertiberia), Millán García-Tola (Iberdrola), Eiji Ohira

(Japan New Energy and Industrial Technology Development Organization), Anders Nordstrøm (Ørsted), David

Armstrong (Queensland Nitrates), Martin Pei (SSAB) and Paul Ebert (Worley).

Stefanie Durbin edited and Myrto Petrou designed the report.

Disclaimer

This publication and the material herein are provided “as is”. All reasonable precautions have been taken by IRENA and the IRENA Coalition

for Action to verify the reliability of the material in this publication. However, neither IRENA, the IRENA Coalition for Action, nor any of its

ocials, agents, data or other third-party content providers provides a warranty of any kind, either expressed or implied, and they accept no

responsibility or liability for any consequence of use of the publication or material herein.

The information contained herein does not necessarily represent the views of all Members of IRENA or Members of the Coalition. Mentions of

speciﬁc companies, projects or products do not imply any endorsement or recommendation. The designations employed and the presentation

of material herein do not imply the expression of any opinion on the part of IRENA or the IRENA Coalition for Action concerning the legal status

of any region, country, territory, city or area or of its authorities, or concerning the delimitation of frontiers or boundaries.

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DECARBONISINGEND-USESECTORS:PRACTICALINSIGHTSONGREENHYDROGEN每日免费获取报告1、每日微信群内分享7+最新重磅报告；2、每日分享当日华尔街日报、金融时报；3、每周分享经济学人4、行研报告均为公开版，权利归原作者所有，起点财经仅分发做内部学习。扫一扫二维码关注公号回复：研究报告加入“起点财经”微信群。。©IRENA2021Unlessotherwisestated,materialinthispublicationmaybefreelyused,shared,copied,reproduced,printedand/orstored,providedthatappropriateacknowledgementisgiventoIRENAasthesourceandcopyrightholder.Materialinthispublicationthatisattributedtothirdpartiesmaybesubjecttoseparatetermsofuseandrestrictions,andappropriatepermissionsfromthesethirdpartiesmayneedtobesecuredbeforeanyuseofsuchmaterial.ISBN:978-92-9260-346-5Citation:IRENACoalitionforAction(2021),Decarbonisingend-usesectors:Practicalinsightsongreenhydrogen,InternationalRenewableEnergyAgency,AbuDhabi.AbouttheCoalitionTheIRENACoalitionforActionbringstogetherleadingrenewableenergyplayersfromaroundtheworldwiththecommongoalofadvancingtheuptakeofrenewableenergy.TheCoalitionfacilitatesglobaldialoguesbetweenpublicandprivatesectorstodevelopactionstoincreasetheshareofrenewablesintheglobalenergymixandaccelerateenergytransitions.AboutthispaperThiswhitepaperhasbeendevelopedjointlybymembersoftheCoalition’sWorkingGrouponDecarbonisingEnd-UseSectors.Featuringseveralcasestudiesonpioneeringgreenhydrogenprojectsandfirst-handinterviews,thepaperprovidesinsightsfromarenewableenergyindustryperspectiveonthegrowthopportunitiesofgreenhydrogenandwhatisneededfrompolicymakerstoaccelerateitsadoptionworldwide.AcknowledgementsContributingauthors:ElviraLópezPrados,AndreaRealRuiz(ACCIONA),MartaMartinezSanchez(Iberdrola),MagnusHornøGottlieb(Ørsted),TomasKåberger(RenewableEnergyInstitute),JesseFahnestock(formerWorldWideFundforNature),andStephanieWeckend,EmmaÅberg,KellyTaiandAnindyaBhagirathunderthesupervisionofRabiaFerroukhi(IRENA).Furtheracknowledgements:ValuablereviewandfeedbackwereprovidedbyDanielZelcer(AcaciaSustainability),CorneliusMatthes,PaulvanSon(DiiDesertEnergy),SilviaPiana(EnelGreenPower),CristinaSimioli(RenewablesGridInitiative),HannahMurdock(REN21),AidanCronin(SiemensGamesaRenewableEnergy),NicolasGogerty(SolarCoinFoundation),CarolineAmblard(WorldBusinessCouncilforSustainableDevelopment),JonnySultoon(WoodMackenzie),Kajol(WorldResourcesInstitute),andEmanueleBiancoandHeribBlanco(IRENA).TheIRENACoalitionforActionwouldliketoexpressspecialthanksandgratitudetotheindividualsinterviewedforthecasestudiesinthispaper,includingJuanPedroYllanes(Vice-PresidentoftheGovernmentoftheBalearicIslands),RafaelMateoAlcalá(ACCIONA),DavidHerrero(Fertiberia),MillánGarcía-Tola(Iberdrola),EijiOhira(JapanNewEnergyandIndustrialTechnologyDevelopmentOrganization),AndersNordstrøm(Ørsted),DavidArmstrong(QueenslandNitrates),MartinPei(SSAB)andPaulEbert(Worley).StefanieDurbineditedandMyrtoPetroudesignedthereport.DisclaimerThispublicationandthematerialhereinareprovided“asis”.AllreasonableprecautionshavebeentakenbyIRENAandtheIRENACoalitionforActiontoverifythereliabilityofthematerialinthispublication.However,neitherIRENA,theIRENACoalitionforAction,noranyofitsofficials,agents,dataorotherthird-partycontentprovidersprovidesawarrantyofanykind,eitherexpressedorimplied,andtheyacceptnoresponsibilityorliabilityforanyconsequenceofuseofthepublicationormaterialherein.TheinformationcontainedhereindoesnotnecessarilyrepresenttheviewsofallMembersofIRENAorMembersoftheCoalition.Mentionsofspecificcompanies,projectsorproductsdonotimplyanyendorsementorrecommendation.ThedesignationsemployedandthepresentationofmaterialhereindonotimplytheexpressionofanyopiniononthepartofIRENAortheIRENACoalitionforActionconcerningthelegalstatusofanyregion,country,territory,cityorareaorofitsauthorities,orconcerningthedelimitationoffrontiersorboundaries.FIGURESANDBOXES..................................................................................................................4ABBREVIATIONS.........................................................................................................................51.INTRODUCTION......................................................................................................................72.GREENHYDROGEN:ANENABLERFORREACHINGNET-ZERO..................................................92.1End-usesforgreenhydrogen........................................................................................................................92.2Lookingahead:Marketprojectionsforgreenhydrogen...........................................................................113.ACCELERATINGGREENHYDROGENUPTAKE........................................................................133.1Governmentbuy-inandsupport..................................................................................................................133.2Movingtowardsaglobalgreenhydrogenmarket.....................................................................................154.KEYTAKEAWAYSANDRECOMMENDATIONS.........................................................................175.CASESTUDIES................................................................................................................................19QueenslandNitrates:GreenammoniaproductionfeasibilityinAustralia......................................................20FH2R:GreenhydrogenR&DandproductioninJapan........................................................................................23HYBRIT:DecarbonisingsteelproductioninSweden.........................................................................................26GreenH2FPuertollanoI:GreenammoniaandfertiliserproductioninSpain.................................................29Power-2-GreenHydrogen:IndustrialrevitalisationandislanddecarbonisationinMajorca..........................33Westküste100:GreenhydrogenandsectorcouplinginGermany..................................................................36REFERENCES.............................................................................................................................41CONTENTSDECARBONISINGEND-USESECTORS:4FIGURESANDBOXESFigure1:PotentialmarketopportunitiesforgreenhydrogenidentifiedbyIRENACoalitionforAction............10Figure2:Globaldemandforrenewableelectricitytoproducegreenhydrogenby2050........................................11Figure3:Policymeasurestoaccelerategreenhydrogenproduction............................................................................13Figure4:Hydrogenenergyvectorsfortrade.........................................................................................................................15Figure5:Overviewofcasestudies............................................................................................................................................19Box1:Definitionofgreenhydrogen...........................................................................................................................................8Box2:GreenhydrogenmarketpotentialidentifiedbyIRENACoalitionforAction...................................................12PRACTICALINSIGHTSONGREENHYDROGEN5ARENAAustralianRenewableEnergyAgencyAUDAustraliandollarCCSCarboncaptureandstorageCO2CarbondioxideDRIDirectreducedironEAFElectricarcfurnaceEJExajouleESGEnvironmental,socialandgovernanceEUEuropeanUnionEUREuroFCHJUFuelCellsandHydrogenJointUndertakingFH2RFukushimaHydrogenEnergyResearchFieldGDPGrossdomesticproductGHGGreenhousegasGWGigawattGWhGigawatt-hourH2HydrogenIDAEInstitutoparalaDiversificaciónyAhorrodelaEnergíaJPYJapaneseyenkWKilowattLRCLinedRockCavernMtMillionmetrictonneMWMegawattMWpMegawatt-peakNDCNationallydeterminedcontributionNEDONewEnergyandIndustrialTechnologyDevelopmentOrganizationNm3NormalcubicmetreNOxNitrogenoxideO2OxygenPEMPolymerelectrolytemembranePPAPowerpurchaseagreementPPPPublic-privatepartnershipPVPhotovoltaicQNPQueenslandNitratesR&DResearchanddevelopmentRED-IIRenewableEnergyDirectiveII(EuropeanUnion)SCADASupervisorycontrolanddataacquisitionSMRSteammethanereformingtCO2TonneofcarbondioxidetH2TonneofhydrogenTWhTerawatt-hourUSDUnitedStatesdollarABBREVIATIONSPRACTICALINSIGHTSONGREENHYDROGEN7Theongoingclimatecrisis,coupledwiththeCOVID-19pandemic,hasspurredmanycountriestoadoptgreenrecoverymeasuresandpoliciesthathavethepotentialtodrivealastingshiftintheglobalenergymix.AsofDecember2020,over120countries–responsiblefornearlytwo-thirdsoftheworld’sgreenhousegas(GHG)emissions–haveannouncedcommitmentstoreachnet-zeroemissions(EnergyandClimateIntelligenceUnit,2021).Tomeetthesecommitments,countrieswillneedtopivotfromfossilfuelstorenewableenergysourcesandpursuewidespreaddecarbonisationofallend-usesectors.Whilerenewableelectricitygenerationcapacityhasbeenoutpacingnewinstalledcapacityinfossilfuelsforthepastdecade(IRENA,2020a),notallsectorscanbeeasilyelectrified.Greenhydrogen–hydrogenproducedfromrenewableenergy–canprovidethecriticallinkbetweenrenewableelectricitygenerationandhard-to-abatesectorssuchasindustryandheavytransport(IRENA,2018).Ithasbecomeaversatileenergycarriersuitablefordecarbonisingapplicationswithoutelectricitygridaccessorasacarbondioxide(CO2)-neutralfeedstockforchemicalprocesses.Greenhydrogencanalsobeleveragedtoprovidegridbalancingservicesinsystemsbuiltonveryhighsharesofrenewableenergy(IRENA,2019).Today,greenhydrogenmakesuplessthan1%ofglobalhydrogenproduced(IRENA,2021c).However,withtheproductioncostofgreenhydrogenreducingrapidlyduetofallingtechnologycostsandtheavailabilityofcost-competitiverenewablepower,countriesareincreasinglyseeinggreenhydrogenasasmartlong-terminvestment.Overthelasttwoyears,atleast11countriesandtheEuropeanUnion(EU)havelaunchednationalhydrogenstrategies,withmanymorecountriessettofollowsuit.Anumberofnationalpost-COVIDrecoverypackageshavealsoincludedsupportmeasuresforgreenhydrogen.AccordingtoIRENA’s1.5°CScenario,by2050hydrogenanditsderivativeswillaccountfor12%offinalenergyuseworldwide.Two-thirdsofthisdemandwillbemetbygreenhydrogen(IRENA,2021c).Inanticipation,investorsandtheprivatesectoraremakingstrategicinvestmentsingreenhydrogenandformingcross-sectoralpartnershipstodrivedowncostcurvesandcreategreatereconomiesofscaleforthisemergingtechnology.Inadditiontoinvestmentsinelectrolysers,theproductionofgreenhydrogeninhighquantitieswillrequiresignificantadditionsofdedicatedrenewablegenerationcapacity.Whiletheglobalmarketforgreenhydrogenisjustbeginningtodevelop,bothpublicandprivatesectorsareproceedingwithdemonstrationandat-scaledeploymentofprojectstobuildtechnicalcapacityandshowcasethepotentialtoscaleupgreenhydrogenuptakeinenergy-intensive,hard-to-abatesectors.ThiswhitepaperdevelopedbytheIRENACoalitionforActionshowcasesprojectsacrossdifferentend-usesandoffersrecommendationstopolicymakersonhowtoaccelerategreenhydrogendevelopment.INTRODUCTION01DECARBONISINGEND-USESECTORS:8Thefollowingchapterprovidesanoverviewofthepotentialofgreenhydrogenacrossdifferentend-usesandtheinvestmentsrequiredtounlockthispotential.Chapter3elaboratesonthemainactionsneededtocreatenational,regionalandglobalmarketsforgreenhydrogen.Chapter4summariseskeytakeawaysonacceleratingtheimplementationanduptakeofgreenhydrogen.Finally,Chapter5presentscasestudiesongreenhydrogenprojectsfromaroundtheworldbasedonfirst-handdataandinterviewswithkeyprojectstakeholders.TheIRENACoalitionforActionhasagreedonthefollowingdefinitionforgreenhydrogen:Greenhydrogenishydrogenproducedfromtheelectrolysisofwater,poweredby100%renewableenergysources.Toverifythattheoriginoftheenergyusedthroughouttheproductionprocessisrenewable,agreenhydrogenproducermay:››Sourceenergyfromarenewablegenerationfacilityphysicallylinkedtotheelectrolyser(e.g.,on-siteproductionforself-consumption);or››Sourceenergyfromthegridthroughmodelsthatguaranteetherenewableoriginoftheenergy.Examplesincludeprocuringrenewableenergythroughpowerpurchaseagreements(PPAs)andpurchasingattributecertificates(e.g.,guaranteesoforigin,renewableenergycertificates),ensuringthatdeliveryoftheenergyisphysicallyfeasible.Thetransparencyofrenewableattributecertificatesisessentialandmaybeverifiedthroughtheuseofrobusttrackingtechnologiesthatphysicallymatchsupplyanddemand.Additionalityrequirementsshouldbeimposedinprinciplebutmaypresentimplementationchallengesforthenascentgreenhydrogensector.Therefore,someflexibilitymayneedtobefactoredintoadditionalitycriteriaintheshortterm.Movingforward,toprovidetransparencytoconsumersandfostermarketdemand,thedevelopmentofspecificmechanismstolabelandtracktheoriginofhydrogenwillalsobeessential.Suchmechanismsshouldavoidthedoublecountingofrenewableenergyattributes.Otherrenewables-basedsolutionstoproducehydrogenexistbasedonthermochemical,photo-catalyticalandbiochemicalprocesses(IRENA,2018).Hydrogenproductionfromtheelectrolysisofwateristhefocusofthisreportduetoitspotentialtolinklow-costrenewableelectricitygenerationwithhard-to-abatesectors.Box1DefinitionofgreenhydrogenPhoto:ACCIONAPRACTICALINSIGHTSONGREENHYDROGEN9GREENHYDROGEN:ANENABLERFORREACHINGNET-ZEROHydrogencanbeproducedwithmultipleprocessesandenergysources.Naturalgasandcoalpresentlyaccountforapproximately95%ofglobalhydrogenproduction(IRENA,2020b).Asenergytransitionsprogress,greenhydrogenproducedfromlow-costrenewableelectricitywillplayagrowingrole.2.1End-usesforgreenhydrogenGreenhydrogenoffersadiversityofpotentialuses.Whiledirectelectrificationviarenewableenergyandenergyefficiencyisthemostefficientpathtoreducingemissionsineasier-to-abatesectorssuchasbuildings,low-temperatureindustry(e.g.,agriculture,pulpandpaper)aswellassometransport(mainlylightandshort-haulfreightvehicle,butalsolong-haultransportincaseswherecharginginfrastructurecanbedeployed),greenhydrogencanplayacrucialroleinsupportingthedecarbonisationofharder-to-abatesectorswheredirectrenewableelectrificationisnottechnicallyfeasibleorwouldtaketoolong.AccordingtoIRENA’sWorldEnergyTransitionsOutlook,greenhydrogencancontributetosignificantCO2emissionsabatementaspartofa1.5°Cpathway—particularlyintheindustrialsectoraswellaslong-haultransport,shippingandaviation(IRENA,2021c).Intheshorttomediumterm,greenhydrogenisexpectedtomakeitsmostsubstantialimpactintheindustrialsector.Energyuseinthesectorisdominatedbyafewindustries:ironandsteel,non-ferrousmetals(e.g.,aluminium),chemicalsandpetrochemicals(e.g.,refineries,ammoniaproduction),andnon-metallicminerals(e.g.,cement)(IRENA,2020a;IRENACoalitionforAction,2021).Forsomeenergyusesintheseindustries,greenhydrogenrepresentstheonlylow-carbonalternative(HydrogenCouncil,2020).Moreover,greenhydrogencanreplaceexistingfossilfuel-basedhydrogenfeedstocksinanumberofindustrialprocesses,includingrefiningofpetrochemicals,ammoniaproductionforfertiliser,methanolproductionforawidevarietyofchemicalproducts,andeventheproductionofzero-emissionsteelviadirectreductionofiron.02DECARBONISINGEND-USESECTORS:10Figure1:PotentialmarketopportunitiesforgreenhydrogenidentifiedbyIRENACoalitionforActionENERGYAPPLICATIONSFEEDSTOCKAPPLICATIONSIndustrialprocesses•Reﬁning•Ammoniaandmethanolsynthesis•Directreducediron(DRI)forsteelproductionEnergyvectorforpowersector•Flexiblepowergeneration•O-gridpowersupply•Large-scaleenergystoragePower-to-fuel•Renewablegases•Syntheticfuels•AmmoniaHeating•Industrialheating•ResidentialandcommercialheatingTransport•Roadtransport•Trains•Aviation•ShippingInadditiontofeedstockapplications,greenhydrogencanreplacetheuseoffossilfuelsinhigh-temperatureheatingforindustrialprocessessuchassteelandcementproduction(IRENA,IEA,REN21,2020).Inthebuildingssector,greenhydrogenalsohasthepotentialtocontributetoenergytransitionsthroughdirectuseforheatproduction.Greenhydrogencanalsofacilitatethedecarbonisingofkeysegmentsofthetransportsectorthroughitsdirectuseinfuelcellelectricvehicles,mostlyforlong-haulroadfreighttransportwherecharginginfrastructurecannotbedeployed,orpotentiallycombinedwithnitrogenorsustainablysourcedcarbontoproduceammonia,methanolandothersyntheticfuelsforshippingandaviation.Finally,greenhydrogencanpotentiallyplayanimportantroleinthepowersector.Technologiessuchashydrogen-firedgasturbinesandlarge-scalestationaryfuelcellscancomplementotherrenewablesourcesofelectricityandreplacedemandcurrentlymetbyfossilfuels.Greenhydrogencanalsoserveasaseasonalstoragemediuminenergysystemswithhighsharesofvariablerenewablegenerationandlowdemandresponseprovidingsystemreliabilityandflexibilityasanadditionalformofdispatchableelectricity.Greenhydrogenoffersgreatpotentialforreplacingfossilfueluseinsectorswheredirectelectrificationisdifficult,makingnet-zeroattainable(seeFigure1).Withnearly6%ofglobalnaturalgasand2%ofglobalcoalcurrentlygoingtotheproductionofhydrogen(IEA,2019),switchingtotheuseofrenewablestoproducegreenhydrogenwillalsocreateadditionalemissionsavings.PRACTICALINSIGHTSONGREENHYDROGEN11Toachieveclimateobjectives,thescaleofinvestmentneededingreenhydrogenisimmense.Asof2021,greenhydrogenprojectstotallingapproximately0.3gigawatts(GW)ofelectrolysingcapacityareinoperation.IRENA’s1.5°CScenarioforecastsnearly5000GWofelectrolysingcapacitywillbeneededby2050toproduceapproximately400millionmetrictonnes(Mt)ofgreenhydrogenperyear.Toreachthistarget,annualaverageinvestmentsinelectrolysingcapacityandassociatedgreenhydrogentransportinfrastructure(whichaveragedlessthanUSD1billion[UnitedStatesdollars]/yearfrom2017-19)willneedtoincreasetoanestimatedUSD78billionbetweennowand2050(IRENA,2021c).1Bywayofcomparison,theworld’stotalelectricityfinalconsumptionin2018reached22315TWh(IEA,2020).Widespreadavailabilityofabundant,low-costrenewableelectricitywillbecrucialtorealisinggreenhydrogen’smarketpotential(seeFigure2).UnderIRENA’s1.5°CScenario,30%oftheworld’selectricityusewillbededicatedtotheproductionofgreenhydrogenanditsderivativesby2050.Meetingglobaldemandforgreenhydrogenwillrequirenearly21000terawatt-hours(TWh)ofrenewableelectricityannuallytomeettheneedsforboththeelectrificationofend-usesandthedevelopmentofaglobalgreenhydrogensupplychain(IRENA,2021c).1Figure2:Globaldemandforrenewableelectricitytoproducegreenhydrogenby20502.2.Lookingahead:Marketprojectionsforgreenhydrogen1002003004005000600700800900400003500030000250002000015000100005000Renewableelectricityneededtoproducegreenhydrogen(TWh/yr)Greenhydrogen(Mt/yr)1.5°CScenario2.0°CScenarioWellbelow2.0°CScenarioETC(supply-sidedecarbonisationonlyscenario)BNEF(NEOClimateScenario)HydrogenCouncil(2°CScenario)IRENA(1.5°CScenario)WoodMackenzie(1.5°CScenario)IEA(NZEby2050Scenario)Sources:EnergyTransitionsCommission(ETC)supply-sidedecarbonisationonlyscenario(EnergyTransitionsCommission,2021),IEA’sNet-ZeroEmissionsby2050Scenario(IEA,2021),IRENA’s1.5°CScenario(IRENA,2021c),BloombergNEF’sNewEnergyOutlookClimateScenario(BNEF,2020),HydrogenCouncil’s2°CScenario(HydrogenCouncil2017,2021b),WoodMackenzieEnergyTransitionService.Notes:1.TheinformationinthisfigurewascompiledbyIRENAwiththesupportofCoalitionforActionmemberswithafocusontherenewableelectricityneededforgreenhydrogenproductionby2050.Therolegiventogreenhydrogeninexistingregionalandglobalenergytransitionscenarioscandiffergreatlyduetoanumberoffactors,whichincludeGHGreductiontargets,assumedsetofenablingpolicies,assumedtechnologyoptionsavailablebetweenscenarios,end-usesconsideredandcostassumptions(IRENA,2020b).Forallthesereasons,theroleofgreenhydrogenvarieswidelyamongscenarios.However,asmorescenariosaredevelopedtoreachzeroornet-zeroemissions,greenhydrogen’spresencewillbemoreprominentinscenariosandpublicdiscourse.2.TheETCsupply-sidedecarbonisationonlyscenarioisanillustrativescenarioconsidering2050finalenergydemandwithoutapplicationofenergyproductivitylevers.Thisscenarioassumesgreenhydrogenwillmakeup85%oftotalhydrogenproductionin2050.3.NumbersforBNEF’sNewEnergyOutlookClimateScenariodenoteawellbelow2°Cpathwaybasedoncleanelectricityandgreenhydrogen.4.NumbersforHydrogenCouncil’s2°CScenariodenotethecasewheregreenhydrogenmeetsallprojectedhydrogendemand.DECARBONISINGEND-USESECTORS:12Theprivatesectoralsoseeslargemarketpotentialingreenhydrogen(seeBox2).Basedonasurveyofover200greenhydrogenprojects,theHydrogenCouncilestimatesthattotalinvestmentsinspendingongreenhydrogenwillexceedUSD300billionby2030(HydrogenCouncil,2021a).Overthelongerterm,PwCestimatesthegreenhydrogenexportmarketcouldbeworthUSD300billionyearlyby2050(Strategy&,2020),andGoldmanSachsprojectsgreenhydrogencouldbecomeaUSD10trillionaddressablemarketthatsameyear(GoldmanSachsResearch,2020).IRENACoalitionforActionmembersactiveinthegreenhydrogenspaceexpecttocollectivelydevelopatleast5GWofelectrolysingcapacityand250GWofrenewablegenerationcapacityby2030.Tocompare,thisforecastedrenewablegenerationcapacityalmostequalsthe261GWnetincreaseinglobalrenewablegenerationcapacityin2020(IRENA,2021b).KeyvaluedriversforCoalitionmembersincludethesaleofgreenhydrogentoindustrialoff-takers,costsavingsrealisedthroughtheoptimisationofelectrolyser-renewableenergyhybridsolutions,andrevenuesearnedfromprovidinggridancillaryservices.Businessopportunitiesalongthesupplychainincludeinvestmentinelectrolyserproductiontomeetprojectedmarketdemandandenabletechnologycostreductionstoacceleratecompetitiveness.Box2GreenhydrogenmarketpotentialidentifiedbyIRENACoalitionforActionPhoto:EnelGreenPowerElectrolysersinstalledbyEnelGreenPowerin2017inthegeothermalCerroPabellónplant.Theelectrolysersarepartofamicro-gridsolarPVfacilitycombinedwithtwoenergystoragesystems,onebasedongreenhydrogen.PRACTICALINSIGHTSONGREENHYDROGEN13ACCELERATINGGREENHYDROGENUPTAKE03Governmentcommitmentsandprivatesectorparticipationarekeytoscalingupinvestmentsingreenhydrogen,acceleratingitsmarketuptakeanddrivingitsintegrationintotheglobalenergysystem.Inadditiontotheproductioncostsofgreenhydrogen,massiveinvestmentsinhydrogentransportandstorageinfrastructure,aswellaspowergridinfrastructuretotransmitelectricitytoelectrolysers,willbeneeded.Aswithrenewables,productioncostsforgreenhydrogenwillcontinuetofallaslarge-scaleprojectsemerge.Alongwiththedecliningcostsofrenewableelectricity,furthercostreductionsinelectrolysersareexpectedtobeachievedthroughimprovedeconomiesofscale,increasedavailabilityofcomponentsfromoriginalequipmentmanufacturers,andgrowthinmarketdemand(IRENA,2020c).Whilegreenhydrogencanalreadybeproducedmorecheaplythanotherformsofhydrogeninsomeregions,onaglobalscalegreenhydrogenisprojectedtobecost-competitivewithhydrogenproducedfromfossilfuelswithcarboncaptureandstorage(CCS)by2030(IRENA,2020c;BNEF,2021).3.1Governmentbuy-inandsupportGovernmentscanputinplacevariouspoliciestoaccelerategreenhydrogenproductionandimplementnationalhydrogenstrategies(seeFigure3).Policiesenablinggreenhydrogenmustbetailoredtothecontextofagivenjurisdiction.Theymustalsofactorinprioritiesbeyondtheenergysystemsuchassustainableeconomicdevelopment.Onlybyadoptingamixofpoliciescanacountrymosteffectivelydrivegreenhydrogengrowth(IRENA,2021a).Figure3:PolicymeasurestoaccelerategreenhydrogenproductionPoliciesacceleratingmanufacturingcapacityandtacklinghighinvestmentcostsofelectrolysersandenablinginfrastructure•Grants•Loans•TaxcreditsPoliciesreducingcostsofrenewableelectricityforgreenhydrogenproduction•Changestoelectricitytaxesandgridfees•Carboncontractsfordierences•Auctions•Feed-intaris/premiumsPoliciesaddressingsustainability•Certiﬁcationschemes•Eco-labels•Additionalitymeasures/mandatesPoliciesenablingdemandandmarketentryforgreenhydrogen•Electrolysercapacitytargets•Greenhydrogenmixtargets•Greenproductmandates•Publicprocurementschemes•CarbontaxesDECARBONISINGEND-USESECTORS:14Interestingreenhydrogenfromgovernmentshasacceleratedinthelasttwoyears.Variouscountrieshaveprogressedbeyondresearchanddevelopment(R&D)programmesandthedevelopmentofvisiondocumentstodevelopcomprehensivehydrogenstrategiesandenablingpoliciesreflectingtheirenergyneeds,environmentalgoalsandeconomicobjectives(IRENA,2020b).Initshydrogenstrategy,theEUhasidentifiedgreenhydrogenasakeyenablerinitsgoaltoreachnet-zeroemissions.Thestrategyestablishesa40GWby2030electrolysercapacitytargetandexpectsinvestmentsamountinguptoUSD567billion(EUR470billion)ingreenhydrogenby2050(EuropeanCommission,2020).TheEUhasalsocommittedtocontinuefundingresearchandinnovationongreenhydrogenthroughthenextframeworkprogramme,HorizonEurope(2021-2027).SeveralEUmemberstateshaveidentifieddedicated2030targetsforinstalledelectrolysercapacityintheirnationalstrategies,roadmapsandvisiondocuments,includingFrance(6.5GW),Germany(5GW),Italy(5GW),Spain(4GW),Netherlands(3-4GW)andPortugal(2-2.5GW)(IRENA,2021a).Somecountrieswithnet-zeroemissionstargetshaveplacedlessemphasisongreenhydrogenproductionandhaveinsteadfocusedonindustrialcompetitiveness,includingdevelopingspecificsectorsthatmakeuseofhydrogen.China,theworld’slargesthydrogenproducer,hasnotreleasedanationalhydrogenstrategy;however,ithasimplementedpoliciestargetingthetransportsectorincludingtheimplementationofdedicatedsubsidiesforfuelcellvehicles(Mengetal.,2020).Japan,whichhasalonghistoryofR&Dinhydrogenandfuelcelltechnologies,releasedaBasicHydrogenStrategyin2017outliningitsvisionforanintegratedhydrogeneconomy;inthenearterm,thecountry’sstrategyfocusesonloweringtheproductioncostofhydrogenanddevelopinginternationalhydrogensupplychains(MinistryofEconomy,TradeandIndustry,2017).ThecountrysubsequentlyupdateditsStrategicRoadmapforHydrogenandFuelCellsin2019(HydrogenandFuelCellStrategyCouncil,2019).Thatsameyear,theRepublicofKorealaunchedaHydrogenEconomyRoadmapprioritisingthedevelopmentoffuelcellsforvehiclesandlarge-scalestationaryfuelcellsforpowergeneration(Kao,2020).Anincreasingnumberofcountriesseektoleveragetheirhighrenewableenergyresourcepotentialtobecomeglobalexportersofgreenhydrogen.ThroughtheNEOMproject,SaudiArabiaplanstoinstall2GWofelectrolysercapacityby2025toproducegreenhydrogenforexport(AirProducts,2020).MoroccohassigneddeclarationsofcooperationwithGermanyandPortugalforthedevelopmentofgreenhydrogeninMorocco(Takouleu,2021).Ofthosecountrieswithnationalhydrogenstrategies,Australiaproposestoleveragethecountry’sexpertiseinrenewableenergydeploymenttobuildasubstantialcleanhydrogenexportindustry(CommonwealthofAustralia,2019),andChileplanstodevelopanexportindustryforgreenhydrogenanditsderivatives,including5GWby2025and25GWby2030electrolysistargets(MinistryofEnergy,GovernmentofChile,2020).Theemergenceofnationalhydrogenstrategiestargetingmultipleend-usesectorsforgreenhydrogen,apartfromelectrolysercapacitytargets,isanencouragingdevelopment,reflectingthegrowingrecognitionofgreenhydrogen’seconomicpotential.Forexample,Spain’shydrogenstrategyincludesa25%greenhydrogentargetforhydrogenusedinindustryby2030.Manynationalhydrogenstrategiesincludeconcreteelectrolysercapacitytargets,whichwillbekeytoboostingprivatesectorconfidenceandprovidingthelong-termsignalsneededtoattractinvestment.Somecountrieshavealsoestablishedothermeasurestoclosethepricegapbetweengreenhydrogenandfossilfuel-basedalternatives.Forexample,inFrancehydrogenproducedfromfossilgasandcoalissubjecttothecarbontax(“ContributionClimat-Énergie”),andtheNetherlandshasinstitutedanauctionschemeforafeed-inpremiumforgreenhydrogen(“SDE++”)(IRENA,2021a).However,amajorityofcountrieshavenotyetreleasedstrategiestargetinggreenhydrogen,andofthecountriesthathave,mostareconcentratedinEurope.PRACTICALINSIGHTSONGREENHYDROGEN153.2MovingtowardsaglobalgreenhydrogenmarketEachcountry’shydrogenstrategyisdrivenbyitsdomesticenergydemandandrenewableenergypotential.Throughtheexportofgreenhydrogen,countriesrichinrenewableresourcesbutlowinnationalelectricitydemandarewell-positionedtosupportthedeploymentofadditionalrenewableenergyforgreenhydrogenproduction.Othercountriescanreducepressuresonlimiteddomesticresourcesandmakefurtherprogressonclimateobjectivesthroughgreenhydrogenimports.Initialeffortstodevelopglobaltradingofgreenhydrogenarebeginningtoemerge.Countrieswithhighproductionpotentialandcountrieswithhighdemandforgreenhydrogenareenteringintobilateralagreementstoexplorenewtraderoutes(IRENA,2021a).Figure4:HydrogenenergyvectorsfortradeAmmoniaLiquidhydrogenGaseoushydrogenLiquidorganichydrogencarriersLOHCFurthermore,thehydrogenstrategiesreleasedtodatehaveseveralshortfalls:1.TargetsmustbebackedwithsufficientR&Dfundingandotherformsoffinancialsupporttodeveloptechnicalcapacityandde-riskgreenhydrogenproduction,distributionanduse.Manystrategiesrelyonsourcesoffundingbeyondnationalbudgetstodeliverthesubsidiesneededtomeetnationalhydrogengoals(e.g.,privateinvestments,EU-levelfundsinthecaseofEurope)(BNEF,2021).2.Somestrategiesfocusmainlyonbuildinggreenhydrogensupplythroughlarge-scaleprojects.Thisrisksexcludingsmallerprojects,whichmustalsobesupportedtofullyintegrategreenhydrogenintotheenergysystem.Inthisrespect,regulatorypoliciesthatenabledemandandgreenhydrogenuptakeatallscales(e.g.,permittingprocessesthatdifferentiategreenhydrogenfromotherhydrogenprojects)areneeded.3.Theenergysystemimplicationsofscalingupgreenhydrogenarenotfullyconsidered.Strategiesmustaddresstheneedforthemassivescaleupofrenewableelectricitygenerationcapacity,buildoutofassociatedpowersysteminfrastructuretosupplyelectrolysers,anddedicatedtransportinfrastructureforgreenhydrogen,whileavoidingcarbonlock-inandstrandedassets.4.Manystrategiesrecognisetheneedforrobustcertificationschemesforhydrogenbuthavenotputforwardsupportiveenablingframeworkstoencouragetheirdevelopment.Certificationschemeswillbecentraltocreatingnational,regionalandglobalmarketsforgreenhydrogen.DECARBONISINGEND-USESECTORS:16Movingforward,thepathtowardsaglobalgreenhydrogenmarketwillnotonlyrequireovercomingtechnicalandeconomicbarriers,butalsotheremovalofmarketandregulatoryobstacles.Forgreenhydrogentobecomeatradeablecommodity,producersmustbeabletogettheirproducttointernationalmarkets.Off-takersofgreenhydrogenmustalsohaveassurancethehydrogenproducttheyarereceivingisproducedfrom100%renewableenergy.Governmentsmustcreateoradaptexistingregulatoryframeworkstoenableproducerstogenerate,transportandstoregreenhydrogenwhenandwhereefficient.Thisincludesadapting:1)rulesforpermittingofhydrogenprojectsinjurisdictionswheregreenhydrogenfollowsthesamepermittingprocessesashydrocarbons;2)rulesgoverninghydrogeninjectionintonaturalgasnetworks;3)rulesestablishingfairaccesstodifferenttypesofenergymarkets;and4)regulationsrelatedtohydrogensafety.Entirelynewregulatoryframeworksmayalsobeneededfortheexclusivesaleofgreenhydrogen.Governmentsalsomustfurtherworktogethertocreateaninternationaltaxonomyforhydrogen.Thisincludesatransparentclassificationsystemforgreenhydrogenanditsderivatives(e.g.,greenammonia,syntheticfuels).Thesystemshouldbebasedonemissionsthresholdsandclearsustainabilitycriteria,ensuringgreenhydrogenisdistinguishedfromotherformsofhydrogen(e.g.,hydrogenproducedfromfossilfuelsusingCCS).Promotinganinternationaltaxonomyforgreenhydrogen–inwhichhydrogenproducedfrom100%renewableenergysourcesbecomesthestatusquo–shouldmakeiteasiertofinanceprojectsincomingyearsasbanksandotherfinancialinstitutionsareincreasinglyturningtoinvestinginactivitiescompliantwithenvironmental,socialandgovernance(ESG)criteria.Suchataxonomycanalsoinformthedevelopmentofinternationalcodesandstandardsforgreenhydrogen,whichwillencouragetheapplicationofbestpracticesandthedevelopmentofcross-borderprojects.Finally,certificationschemesbasedoninternationallyacceptedstandardsmustbeestablishedtofosteraglobalmarketforgreenhydrogen.Trackinginstruments(e.g.,certificates)createthenecessarytransparency,fostertransferabilityandstimulatedemandbyfinalconsumers.Topreservevalueandtoavoiddouble-counting,acleardistinctionmustbemadebetweencertificatesforrenewableelectricityandcertificatesforgreenhydrogenproducedfromrenewableelectricity.Thisisaprerequisiteforaneffectiveregulatoryframeworkandtoprovidethecorrectmarketsignalsonthe“greenness”andthesustainabilityofgases.EffortsareunderwayinseveralcountriesandregionssuchastheEUtocreateacertificationschemeforgreenhydrogen.PRACTICALINSIGHTSONGREENHYDROGEN17KEYTAKEAWAYSANDRECOMMENDATIONS04Thefollowingkeyfindingsmayserveasguidanceandinspirationforgovernmentsonhowtoensuregreenhydrogenisproducedfromrenewables,scaleupitsproductionandfacilitateitsuptakeinnewend-useapplicationsinsupportofglobalclimateobjectives.Actnowtodevelopnationalstrategiesandplansforgreenhydrogen.Todate,fewerthanone-fifthofcountrieshaveputforwardnationalhydrogenstrategies.Furthermore,someofthesestrategiesdonotprioritisegreenhydrogenoverotherformsofhydrogen.Nowisthetimeforgovernmentstodevelopcomprehensiveactionplansanddetailedroadmapsforgreenhydrogenbasedonconcretetargets,leveragingpost-COVIDstimulusandrecoverypackagestokick-startproductionandenergytransition-relatedinfrastructuredevelopment.Actionplansandroadmapsshouldtakeintoconsiderationprojectedfuturedemandandpromotethelong-termdevelopmentofasustainablegreenhydrogensector,drawingonlessonslearnedfromrenewables.Countriescanformalisetheircommitmentsbyincludinggreenhydrogenintherevisionoftheirnationallydeterminedcontributions(NDCs).Increaseambitionsinrenewableenergydeployment.Actionplansforacceleratingtheuptakeoflow-costrenewablesandgridinfrastructuretoapacethatcansustainbothelectrificationofend-usesandgreenhydrogenproductionarekey.Thiswillalsoensureadditionalrenewableenergyisusedforgreenhydrogenproductionandthatitisnotdivertedawayfrommorecost-effectivewaystofurtherdecarboniseend-usesectors(i.e.,electrification).Developgloballyrecognisedstandardsandsupportingcertificationschemesforgreenhydrogen.Greenhydrogenuptakewillrelyonthewidespreadacceptanceoftrackinginstrumentscertifyingtheoriginofgreenhydrogen,ensuringthatitsproductionisbackedby100%renewableelectricitygeneration.Thisrequiresthedevelopmentofaninternationallyacceptedtaxonomyforgreenhydrogenanditsderivatives.Inparallel,governmentsmustworkonremovingexistingmarketandregulatorybarrierssurroundinggreenhydrogenincluding,butnotlimitedto,clarifyingrulesaroundgreenhydrogen’saccesstodifferenttypesofenergymarkets.Prioritiseuseofgreenhydrogeninhard-to-abatesectorswherenocheaperdecarbonisationoptionsexistandavoidapplicationsleadingtocarbonlock-in.Governmentsshouldplaceinitialfocusonreplacingfossilfuel-basedhydrogenwithgreenhydrogenfeedstocksforindustry,asdemandinthisarea–currentlymetbyhydrogenproducedfromfossilgasandcoal–alreadyexistsandisdifficulttosubstitute.Moreover,nationalstrategiesandactionplansshouldavoidcarbonlock-inandstrandedassets.Inthisrespect,theblendingofgreenhydrogenintoexistingnaturalgasnetworksshouldnotbeprioritisedasitprolongstheuseofhigh-carbonassetsanddisplacesmoreefficientdecarbonisationoptionsforsomeapplications.DECARBONISINGEND-USESECTORS:18Implementfinancialpoliciesandincentivestoaccelerateearly-stageinnovationanddeploymentofgreenhydrogentechnologies.Financialsupportforgreenhydrogenisneededuntilthisenergycarrierbecomescost-competitivewithotherformsofhydrogen.Supportmechanismscancome,forinstance,intheformofgrantsandloanstodrivedownthecostoffinancingprojectsortaxcreditstoincentiviseadoption.AccesstofundingisalsokeytoaccelerateinnovationandR&Dforearly-stagegreenhydrogentechnologiessuchassteelproductionthroughDRI,syntheticfuelsorammoniauseinships.Inthenearterm,targetedfinancialsupportsshouldbeprovidedtotheindustrialsectorforthepurposeofconvertingexistingindustrialprocessestousegreenhydrogenproducedfromvariablesourcesofrenewableelectricity.Stimulatedemandforgreenhydrogenthroughcarbonpricingandotherregulatorymeasures.Subsidiesforfossilfuelscontinuetodistortenergymarketsandlimitthepotentialgrowthofgreenhydrogen.Carbonpricingsignalsshouldbestrengthenedtoaccountforenvironmentalexternalities(GHGemissions),creatingalevelplayingfieldbetweenthedifferentenergyvectorsandencouragingefficientconsumption.Carbonpricingmechanismsmustalsobeaccompaniedbyborderadjustmentsorrobustcertificationschemesforhydrogenimportstoavoidcompetitivenessissues.Othermechanisms,suchasgreenproductmandates(e.g.,forsteel,cement,fertilisers),publicprocurementschemesandsectoraltargets,canalsostimulatedemandforgreenhydrogen.Considerhowexistingregulationofelectricitygridfeesandtaxationaffectopportunitiesforgreenhydrogenproduction.Theabilityofproducerstooptimisegreenhydrogenproductiontoperiodswhenrenewableelectricityisinexcesssupplyandavailableatlowercostscanbehinderedbyelectricityconsumptiontaxesorgridfees.Toencouragegreenhydrogenproductionandrealiseitspotentialtoprovidegridbalancingservices,governmentsshouldconsiderhowtoimplementmoreefficientelectricitytaxesandgridfeesaswellascongestion-basedtariffs.Promotedevelopmentofgreenhydrogenhubsandvalleys.Inthenearterm,governmentsshouldworkwithpartnerstodevelopintegratedgreenhydrogen“hubs”or“valleys”co-locatinggreenhydrogenproduction,storage,distributionandconsumptioninonegeographicarea.Byinvolvingbothproducersandconsumersinpartnerships,off-takersforgreenhydrogenproductioncanalsobeidentifiedupfront,therebydiminishingprojectrisks.Co-locationalsoreducestheimmediateneedforlong-haultransportinfrastructurewhileguaranteeingtherenewableoriginofanyhydrogenproduced.Beyonddomesticproduction,hubscouldbelocatedstrategicallytotakeadvantageofexistinginfrastructureforpotentialtransportandexportofgreenhydrogen(i.e.,pipelinesandshipping).Strengtheninternationalco-operationandpartnershipstoaccelerategreenhydrogenuptake.Greatercollaborationisstillneededamonggovernments,industryandacademiatopioneergreenhydrogensolutionsforrapiddecarbonisation.ThiscouldincludejointcollaborationonR&D,commonagreementsonstandardsandcertificationprinciples,andidentificationofsupplychainandtradingopportunities.PRACTICALINSIGHTSONGREENHYDROGEN19CASESTUDIES05Tobetterunderstandthetechnical,economicandpolicyopportunitiesandchallengesofgreenhydrogenanditsroleinenergytransitions,thiswhitepaperprofilesaselectionofgreenhydrogenprojectscoveringdifferentgeographiesandend-uses.ThecasestudieswereselectedbymembersoftheCoalitionforActionbasedonfirst-handexperiencewiththeprojectsandbuildoninsightsobtainedthroughinterviewswithkeystakeholders.Figure5belowprovidesanoverviewoftheselectedcasestudies.Figure5:OverviewofcasestudiesPROJECTNAMEPRODUCTIONEND-USEAlkalineelectrolyserFukushimaHydrogenEnergyResearchField(FH2R)PowergenerationRoadtransportHYdrogenBReakthroughIronmakingTechnology(HYBRIT)SteelindustryAlkalineelectrolyserPower-2-GreenHydrogenPEMelectrolyserIndustryRoadtransportWestküste100Electrolyser(TBD)GreenmethanolQueenslandNitrates(QNP)AmmoniumnitrateforexplosivesAlkalineelectrolyserGreenammoniaGreenH2FPuertollanoIPEMelectrolyserFertiliserindustryGreenammoniaAviationRoadtransportDECARBONISINGEND-USESECTORS:20QUEENSLANDNITRATES:GREENAMMONIAPRODUCTIONFEASIBILITYINAUSTRALIAQueenslandNitrates(QNP)isanammoniumnitratefacilitylocatednearMouraincentralQueensland,Australia.AjointventurebyDynoNobel(acquiredbyIncitecPivotLimitedin2008)andCSBP(Wesfarmers),QNPhasaproductioncapacityof235000tonnesperyearofammoniumnitrate,whichitsuppliestotheQueenslandminingindustry(IncitecPivotLimited,2020).InSeptember2019,QNPconductedafeasibilitystudyforagreenhydrogenandammoniaprojectthataimstousegreenhydrogentoproduceammoniaatQNP’sexistingmanufacturingplant.WithanestimatedprojectcostofUSD115milliontoUSD154million(AUD150milliontoAUD200million),theproposedfacilitiesinvestigatedinthestudyincludea30MWalkalineelectrolyserandasmall-scaleammoniasynthesisplantusingtheHaber-Boschprocess.Thefacilitieswouldconsume208gigawatt-hours(GWh)ofelectricityperyeartoproduce3500tonnesofgreenhydrogentomake20000tonnesofgreenammonia,displacingapproximately20%oftheammoniacurrentlyusedbyQNP(naturalgas-basedammoniapurchasedfromthirdparties)andassociatedGHGemissions(QNP,2020).Thefeasibilitystudy,undertakenincollaborationwithNeoenAustraliaandAdvisian(partofWorleyGroup)wascompletedinApril2020atatotalcostofUSD3million(AUD3.89million).TheAustralianRenewableEnergyAgency(ARENA)providedUSD1.47million(AUD1.91million)ingrantfundingtosupportthestudyaspartofARENA’sAdvancingRenewablesProgram(ARENA,2019).Neoenexaminedrenewable-basedelectricalsupplyoptionsfortheproposednewfacilities,whileAdvisiancompletedtheoverallmodellingandengineeringfeasibilitywork.Off-sitewindandsolargenerationsuppliedbyNeoenthroughaPPAwasfoundtobethebestoptiontopowerthefacilities.ThiswasbecausetheQNPsitewasnotsuitableforwindpowergenerationandthesolarfieldneededtogeneratetheelectricityrequiredwastoolargetobelocatedbehindthemeter.Thefeasibilitystudyalsofoundtheprojecttobeeconomicallyviablewithfundingsupportintheformofgrantsandconcessionalloans.However,withoutsubsidiesapotentiallyviablebusinesscasewasfoundtobeachievedwhenproducing1Mtofgreenammoniaperyear(QNP,2020).Photo:QueenslandNitratesPtyLtdPRACTICALINSIGHTSONGREENHYDROGEN21Whydidyourorganisationdecidetopursuehydrogen?Howdidyourorganisationfirstgetinvolvedintheproject?MrArmstrong:Hydrogenisneededtomakeammonia,andwewantedtoreplacethe20%ofourammoniarequirementcurrentlypurchasedfromothers.Worleywasseekingpotentialprojectswithamarketforhydrogenfromrenewables.QNPhadtheidealprojectsizeandanexistingmarketforthehydrogen,viaammonia.Ourprojectwastherightscaletotakethenextstepupinsizewiththeproductionofhydrogenfromelectrolysis.Inaddition,itcouldpotentiallyachievefundingsupportbyplayingapartinthedevelopmentofarenewables-basedenergyexportindustry,alongwithdecarbonisationofexistingsupplychainswithourcustomers.DrEbert:Weseelow-carbonhydrogenasafoundationofafutureenergysystemcapableofmeetingglobaldecarbonisationandbroadersustainabilityobjectives.Itsversatility,particularlythelinkingofelectricityandgasmarketsthatitoffers(helpingtointegratevariablerenewablesinparticularandthroughinherentenergystorage),itsabilitytodisplacehigheremissionsfuelsindifficult-to-shiftsectors,anditssustainablecircularityareallreasonstodriveittobecomebusinessasusual.Weareagnosticastohowlow-carbonhydrogenisproduced–blue2orgreen–asbothareneeded.Tokickoffgreenhydrogenasanewindustry,exemplarsareneededtopavethedevelopmentcycle,de-riskinvestmentandbuildcapability.Initialprojectsmakemoresenseinthemorevaluablehydrogenuses,suchasheavytransportandchemicals,andQNPhadalmosttheperfectcircumstance.Wetooktheprojecttothemasaconceptanditresonated.2“Bluehydrogen”ishydrogenproducedfromfossilfuelswithcarboncaptureandstorage(CCS).Haveanycommercialpressures(forexample,climatechangerisk)ledtotheexplorationofgreenhydrogen?MrArmstrong:Commercialpressuresincludeapubliclystated(andgrowing)desirebyourcustomerstodecarbonise,aswellassomestrategicriskmitigationbyusasabusiness.DrEbert:Wecertainlyseethispressureonourcustomers,someofwhomhaveverydifficultdecarbonisationchallengesinwhichlow-carbonhydrogenisasolutionamongasometimessmallportfolioofoptions,whiletheirmarketsareplacingmoreattentiononcleanerproducts.Whathavebeensomeofthemajorchallengesofdevelopingandoperatingtheproject?Howwerethesechallengesovercome?MrArmstrong:Therewereseveralkeythingswedidnotbringtotheproject:1)adetailedknowledgeoftheelectricitymarket;2)accesstopotentialglobaltechnologyproviders;3)resourceandspecifictechnicalknowledge;and4)apotentialfundingpathwayfortheproject.Projectpartnersallowedthefirstthreeofthesetobeovercome.DrEbert:Potentialdevelopersandusersoflow-carbonhydrogenfacedifficulteconomicsandalackofexperienceinassessing,developingandreachingfinalinvestmentdecisionsforgreenhydrogenassets.ThewaythePPAisstructured,howtheoperationoftheelectrolyserisintegratedandoptimised,andtheopportunitiesthatcanbeprovidedbacktotheenergymarketfromthis–totallynewcontractthinkingisneeded.Projectprocurement,specificationissues,arrangements,processflows,technicaloptimisations,andplantsafetyandoperabilityallhavetobeconsideredanddealtwith.Beingacomplexprocessindustry,projecttechnicalrigourisveryimportant.InterviewwithDavidArmstrong,GeneralManager,QueenslandNitratesPtyLtd(QNP)andPaulEbert,GroupDirector,EnergyTransition,WorleyDECARBONISINGEND-USESECTORS:22Whatroledidlocalornationalauthoritiesplayinaddressingthesechallenges?MrArmstrong:ARENAprovidedgrantfundingtooffsetthecostsofthefeasibilitystudy.TheNorthernAustraliaInfrastructureFacilityhasalsobeensupportiveinpotentialfundingsolutions.DrEbert:Generally,Australianstateandfederalgovernmentsareverysupportiveofalow-carbonhydrogenindustry.Itisacknowledgedasapotentialnewindustryforthecountry’sfuture.Australia’snaturalgasindustry,existingaccesstoenergymarketsandvastrenewableenergyresourceslendittobecomingamajorplayerintheproductionanduseofbothblueandgreenhydrogen.Whataresomeofthekeylessonslearnedfromtheproject?MrArmstrong:Oneconsiderationisthechoiceofelectrolysertechnologyandwhetherithastheresponsecharacteristicsrequiredtodeliverfrequencycontrolandotherancillaryservices;thisisespeciallyimportantinlightofthePost-2025MarketDesign3andopportunitiestogenerateadditionalrevenuestreams.Intermsofcostoptimisation,thereisalsoatrade-offtobemadebetweencapitalcosts(i.e.,electrolyser,hydrogenstorage)andoperatingcosts(i.e.,electricity).Inourcontext,thefeasibilitystudyfoundthat60%and80%electrolyserutilisationratesdeliveredasimilarfinancialoutcome.Ourprojectissub-scaleandwhilewegainedsomepleasingmovementincapital,significantsupportisstillrequiredtodeliveranacceptablebusinesscase.Greenhydrogenproductiononaworldscale(1Mtperyear)appearstomaketheprojectfinanciallyfeasible.3In2019,Australia’sEnergySecurityBoardwastaskedwithrecommendingdesignchangestothecountry’sNationalElectricityMarket,whichcoversQueensland,NewSouthWales,AustralianCapitalTerritory,Victoria,TasmaniaandSouthAustralia(EnergyMinisters,2021).However,keyquestionsremainaroundrisk.Weneedtimeandexperiencewithlargeelectrolyserstoconfirmtheiroperatingefficiencies,characteristicsandmaintenanceregimes.Howdoyouexpectthemarketforgreenhydrogentogrow?Whatdoyouseeasthemajordrivers?MrArmstrong:Majordriversofdemandforgreenhydrogenincludeapathwaytoanexportenergyindustryandthedecarbonisationofexistingdomesticsupplychains.Themarketmaygrowinafewdirections.Greenhydrogencanbedirectlyused,orsynthesisedintoammonia,foruseasatransportfuel;fuelcellsareapromisingalternativeforlarge/commercialvehiclefleets.Hydrogenorammoniamayalsoemergeasasignificantfuelsourcereplacingoraugmentingelectricityproductionfromtraditionalsources.DrEbert:Weexpectthelow-carbonhydrogenmarkettogrowrelativelyquicklyoncetheinvestorcommunityisconfidentthatbusinesscasescanbemetandthatthevaluepropositionisreal.Ultimatelythisrequiresriskstobedealtwith–technology,pathways,offtakes–anddrivingdowncostsincrementally.Thevaluepropositionforlow-carbonhydrogenisthere,butitrequiresgettingtoscale.Wearepragmaticenoughtoknowthatbluehydrogenwillhavearole,butoncelow-carbonhydrogenpathwaysareestablishedandthedecarbonisationfocusmovestonaturalgas,theonlyoptionisgreenhydrogenfromlow-emissionresources–thebulkofwhichwillberenewablesbased.Hydrogenwillultimatelybeacriticalcomponentofanenergytransitionjigsawinvolvingtheintegrationofvastamountsofvariablerenewableenergyintoourenergymarkets.PRACTICALINSIGHTSONGREENHYDROGEN23FH2R:GREENHYDROGENR&DANDPRODUCTIONINJAPANTheFukushimaHydrogenEnergyResearchField(FH2R)inNamietown,FukushimaPrefecture,JapanbecameoperationalinMarch2020afteranapproximatelytwo-yearconstructionphase.FH2Rconsistsofa10MWalkalineelectrolyserwithacapacitytoproduceapproximately1200normalcubicmetres(Nm3)ofhydrogenperhourbyprimarilyutilising20MWofon-sitesolarphotovoltaic(PV)generationcapacity(NewEnergyandIndustrialTechnologyDevelopmentOrganization,2020).HydrogenproducedatFH2RisdeliveredbytubetrailerandcylindercradletoseveralsitesinFukushimaPrefectureasfuelforstationaryfuelcells.Thegreenhydrogenwillalsobeusedforfuelcellvehicles.TheprojectisrunbyaconsortiumledbyJapan’sNewEnergyandIndustrialTechnologyDevelopmentOrganization(NEDO).ToshibaEnergySystems&SolutionsCorporation(ToshibaESS)overseestheproject,andTohokuElectricPowerNetworkCo.,Inc.isinchargeofsupervisorycontrolanddataacquisition(SCADA)andgrid-relatedmatters.IwataniCorporationfocusesonhydrogendemand-and-supplyforecasting,transportation,andstorage,andAsahiKaseiCorporationisresponsiblefortheelectrolysistechnologyusedintheproject.ApproximatelyUSD180million(JPY20billion)wasallocatedtotheR&DprojectatFH2RbyNEDOthroughMarch2023.FH2Rservesasaresearchlaboratoryforfuturehydrogenprojectsbyassessinghowgreenhydrogencanbeusedtomanageandoptimisefluctuationsinelectricalpower.Tothatend,amanagementsystemhasbeendevelopedthatcomprehensivelycontrolsvariousdevicessuchastheelectrolyser,thesolarPVgenerationfacilities,thehydrogenstorageunitandhydrogencompressionbasedontheirresponsiveness.Anotherprojectobjectiveistoacquiredataforthepracticalapplicationofpower-to-gasbyexaminingtheefficiencyandresponseperformanceoftheelectrolyserundervariousoperatingconditions.Photo:QToshibaEnergySystems&SolutionsCorporationDECARBONISINGEND-USESECTORS:24WhydidNEDOdecidetopursuetheFH2Rproject?Currently,renewablesaccountforapproximately20%oftheJapanesepowersector.Tomeetour2050net-zeropledge,asignificantscaleupofrenewableenergyisneeded.Inadditiontoenergystorageandbatteries,hydrogenproductionthroughwaterelectrolysiswillplayakeyroleinprovidingthenecessarygridbalancingservices.NEDOhasalonghistoryinhydrogenandfuelcellsresearchanddevelopment.AlthoughwestartedtopromotetheconceptofFH2Rintheearly2000s,wesoonrealisedthatwewereaheadofourtime.Were-initiatedtheprojectideaaftertheJapanesegovernmentdevelopedafuelcellsroadmapin2014andadopteditsBasicHydrogenStrategyin2017.Initially,ourfocuswasonsmallhydrogenprojects(100kilowatts[kW]andless),butlookingatthefuturedemandofthemarketwedecidedtodevelopa10MWhydrogenproductionunit.ThedecisiontolocatetheprojectinFukushimawasbasedontheprefecture’sambitious100%renewableenergyplansandavailabilityofsuitablelandforalarge-scalehydrogenplant.Wealsowantedtocontributetoitsrecoveryafterthenucleardisasterand,lookingahead,showcasethefutureofhydrogenintimefortheOlympicGames.Throughoutthesiteselectionprocessuptotoday,FukushimaPrefectureremainsverycommittedandinvolvedintheproject.Weselectedpartnersthroughageneraltenderingprocessforapower-to-gasprogramme,fromwhichwefoundsuitableprivatesectorcompaniestoworkwith.Togetherwithanexpertpanel,weselectedToshibaESSasoneofthemainpartners.Whathavebeensomeofthemajorchallengesofdevelopingandoperatingtheproject?Howwerethesechallengesovercome?Themainchallengeswefacedweretechnicalonesfollowedbysystemandoperationalchallenges.First,weneededtodevelopalarge-scale10MWelectrolyserandsecurethetechnologyinamarketthatisstillinitsinfancy.Theupfrontinvestmentcostwashigh,particularlygiventheriskassociatedwithsecuringareliable,efficientanddurableelectrolysisunitofthissize.Wefoundcreativewaystoreduceupfrontcostsaswellasoperationalcosts.Theutilisationofthe20MWPVplantdependson,amongotherfactors,weather,soforecastingbecameveryimportant.Wealsolookedathowpower-to-gascanparticipateintheJapanesegridbalancingmarket,whichwouldprovideanothersourceofrevenueforgreenhydrogenprojects.Currentlywecannotparticipateinthemarketbecausetheminimumsizethresholdforofferingintothemarketis5MW.However,weexpectthissituationtochangewiththeJapanesegovernmentplanningtocommercialisepower-to-gasinthenearfutureandtheabilitytoscaleupfurtheraswegaintechnicalcapacity.Wealsohadtobuildhumanexpertise.Manyexpertswithspecialisedcompetencieswereneededforthisproject,includingtechniciansandoperators.Theobjectivewastofindwaystomaximisesystemoperationinacost-effectiveway.Forthis,youneedhumancapacityandexperiencethatwehadtotrainonsite.Finally,wefacedchallengesdevelopingtheproject’sbusinessmodel.Wecouldnotcalculatetheexactoperationandmaintenancecosts,asdatawasnotavailableyetinJapanandverydifficulttofindglobally.Demandforecastingforhydrogenwasanotherissue.Thisiswhyweturnedtopartners,suchasTohokuElectricPowerandIwatani,tosupportus.Whataresomeofthekeylessonslearnedfromtheproject?Duringtheentireprojectlife,wefollowedaniterativeapproachdevelopingprototypes,coupledwithmuchtestingandmultiplefeedbackroundsinvolvingallstakeholders.Ibelievethisapproachmadethisprojectsuccessfulandshowedusthepotentialforpower-to-gastechnologiestobecomeanimportantcontributortoachievingournet-zeropledgeby2050.InterviewwithEijiOhira,DirectorGeneral,FuelCellandHydrogenGroup,JapanNewEnergyandIndustrialTechnologyDevelopmentOrganization(NEDO)PRACTICALINSIGHTSONGREENHYDROGEN25FH2Risoneofthelargesthydrogenresearchfacilitiesglobally.Theexperienceanddataacquiredwillbeinvaluableforcommercialimplementationsinthefuture.NEDOisusingthisgainedknowledgeinitsothernationalfuelcellandhydrogenprojects.Theprojecthasshownthatweneedtoimprovefuelcelltechnologiesanddevelopnewones,particularlyforspecificapplicationssuchasheavy-dutyvehicles,vesselsandmore.Wealsoneedtodevelopaninternationalhydrogensupplychain.AlthoughweusedJapanesetechnologiesfortheFukushimaproject,wecertainlyneedtohaveclosercollaborationwithothercountriestoincreasenecessaryR&Dandscaleupthetechnology.Forinstance,forstationaryfuelcells,JapanesecompaniesalreadycooperatewithGermancompanies.WhatrolewillhydrogenplayinJapan’senergytransition?Whileweintendtousehydrogeningasturbinesfirst,wealsoplantoinvestinfurtherR&Dtocapturehowwecanusehydrogenfordifferentindustries,particularlyenergy-intensiveones.Thequestionishowtointegratehydrogenintoexistingenergysystemsordesignsystemsthatalsomaximisetheutilisationoflocalenergysources.Thiswillrequirethedevelopmentofamasterplanthatalsoconsiderssupportinginfrastructure.AlthoughJapanwillinvestinhydrogenproductionforitsownneedsandnationalenergysecurity,theextenttowhichwecandecarbonisethroughhydrogendependsonourabilitytoimportfromothercountries.Weneedtodevelopglobalhydrogenmarketsthatallowforlong-distancetransportofhydrogen.Howdoyouexpectthemarketforgreenhydrogentogrow?Whatdoyouseeasthemajordrivers?Marketgrowthforgreenhydrogenwilllikelybedifferentforeachcountrydependingondemand,supplyandpolicies.Industrydemandforhydrogenwillbekeytogrowth.Asthecostofhydrogendecreases,moreindustrialplayerswillseektodecarbonisetheiroperations.WiththeEUsettingcleartargetsforhydrogen,alocalmarketislikelytodeveloprapidlybecausetheindustryhasclearsignals.InJapan,specifichydrogentargetsarestillunderdiscussion.Japan’spolicymandatestoreduceGHGsandnitrogenoxide(NOx),aswellasitsplanstophaseoutthesaleofgasanddiesel-enginedcarsby2035willcertainlysupportgreenhydrogendevelopmentandhelpremovemarketrisks.Financingalsoplaysacrucialroleindrivinghydrogen.WiththeJapanesegovernmentprioritisingagreenfutureandputtingforwardsupportiveregulation,theJapanesefinancialsectorisnotinvestinginnewcoalplantsanymoreandisincreasinglyinvestinginenergy-transitionrelatedtechnologies,includinghydrogen.Toscale-uphydrogenevenfurther,policyandindustrywillneedtoworkhandinhandtodevelopashort-,medium-andlong-termvisionforahydrogensociety.OurJapanesestrategywasreleasedthreeyearsagoandwillberevisitedinthenearfuture.Lastlyandmostimportantly,hydrogenwillonlykickoffifwehavepublicacceptance.Thiscanbedonethroughdifferentmeanssuchasinformationsharingandeducation.Governmentshaveakeyroletoplayinprovidingfactsandfigurestothemediaandthepublicshowcasingthefullpotentialofhydrogen.DECARBONISINGEND-USESECTORS:26HYBRIT:DECARBONISINGSTEELPRODUCTIONINSWEDENIn2016,thesteelcompanySSABinvitedtheminingcompanyLKABandelectricityproviderVattenfalltoformtheHYdrogenBReakthroughIronmakingTechnology(HYBRIT)initiativewiththeobjectiveofdevelopingafossil-freesteelmakingprocess.Followingapre-feasibilitystudy,thethreecompaniesformedajoint-venturecompanyandinvestedinapilotplantprojecttodevelopafossil-freevaluechainfromironoretosteelusingcleanelectricity(HYBRIT,2021).Fossil-freeironpellet-productiontrialswerestartedinAugust2020andadirectreductionplantwasconstructedandinauguratedinthesamemonth.A4MWelectrolyserplantforgreenhydrogenproductionwillbeputintooperationduring2021.ConstructiononaLinedRockCavern(LRC)hydrogenstoragepilotfacilityhasalsocommencedandistobecompletedasearlyas2022(Vattenfall,2021).Anindustrial-scaledemonstrationplantisplannedtobebuiltby2025withthecapacitytoproduce1milliontonnesoffossil-freespongeiron,usedbySSABtoproducefossil-freesteelatacommercialscale.Theendgoalistoachievecommercialdeliveryoffossil-freesteelproductsin2026.Despitethetechnologyrisksinvolved,steelsupplychainactorswerewillingtoinvestduetotheavailabilityoflow-costrenewableelectricityandincreasedconfidenceingovernmentsandindustrialclimatepolicies.Notably,projecttimelinesfortheHYBRITinitiativehavebeenacceleratedsinceits2016launchinresponsetocompetitionfromotheractorsinSweden,Europeancountriesandtherestoftheworld.TheHYBRITprojecthasenjoyedstrongfinancialsupportfromtheSwedishEnergyAgencyandtheprojectwaspraisedduringthelaunchoftheNextGenerationEUrecoveryfund.Photo:PerJuntti/LKABInterviewwithMartinPei,ChiefTechnologyOfficer,SSABWhydidSSABdecidetopursuehydrogen?HowdidSSABfirstgetinvolvedintheproject?IndustryhastrieddifferentoptionstoreduceCO2emissionsinthesteelproductionprocessinthepastdecades.However,incrementalimprovementsinenergyefficiencyarefarfromenoughtoreachtheobjectivessetintheParisAgreement;onthecontrary,breakthroughtechnologyisnecessary.Assuch,twooptionshavebeenevaluatedintheindustry:continuewithsteelmakingusingthecurrentdominantfossilcoal-basedblastfurnaceironmakingapproachandinvestincarboncaptureandstorage(CCS),orshifttothecleanhydrogen-baseddirectreducediron-electricarcfurnace(DRI-EAF)routefortheproductionofprimarysteelfromironore.SSABdecidedtotaketheleadinscalingupthelatterandinitiatedtheHYBRITproject.PRACTICALINSIGHTSONGREENHYDROGEN27Whatarethemajorchallengesofdevelopingandoperatingtheproject?Howarethesechallengesovercome?TheambitionoftheHYBRITinitiativeistoreplacecokingcoalusedinironmaking,anindustrywithalmost1000yearsofhistory.Apartfromtheneedtoscaleupthetechnologystep-by-step–fromlaboratorythroughpilotplanttodemonstrationplant–andsolvetechnicalchallengesforeseentoemergeduringthejourney,bothpolicyinstrumentsandpublicsupportarenecessarytosupportthistransformation.Societalbuy-inisimportantsincethisshiftcreatessignificantchangetotheindustriallandscapeandcreatesaconsiderableneedformoreinvestmentsinrenewableelectricityproductionandtransmissioninfrastructure.Whatroledidlocalornationalauthoritiesplayinaddressingthesechallenges?InSwedenthereisstrongsupportandurgencyatthenationallevelregardingclimatemitigation.TheSwedishEnergyAgencyprovidedfinancialsupportfortheR&Dandpilotprojects.Suchsupportisextremelyimportant–thesteelindustryalonewillnotbeabletotakealltheriskassociatedwiththetransformationalchange.Atthelocallevel,understandingoftheneedforthistechnologyshiftisimproving.Thiswillbeincreasinglyimportantasourinitiativeprogresses,andpermitsandchangesinlocalsocietybecomenecessarytoenablethetransition.Whataresomeofthekeylessonslearnedfromtheproject?Oneofthelearningssofaristhenecessitytocreatealignmentamongthemostimportantstakeholders.IntheHYBRITinitiative,thisincludesfirstthethreeownercompanies,authoritiesandpoliticalpartiesinSweden,aswellastheacademiccommunity(universitiesandresearchinstitutes,bothintechnicalandenergy/climatepolicyareas).4“Renewablehydrogen”referstogreenhydrogen.Significanteffortwasmadetoexplaintheinitiative’sgoalandthesupportneededtosucceed.Eventhoughtherearestillskepticalvoices,theHYBRITinitiativehasgainedwidespreadpublicsupportinSwedenandFinland.TheEuropeanCommissionhasevendesignatedHYBRITa“LighthouseEuropeanproject”,allowingustoreceivefinancialsupportaspartoftheCOVID-19greenrecovery.Howdoyouexpectthemarketforgreenhydrogentogrow?Whatdoyouseeasthemajordrivers?TheHYBRITinitiativeisbuiltonashiftfromfossilcoaltorenewablehydrogen4/electricityforironorereduction.Sincethemagnitudeoftheenergyinvolvedishuge,wehavefocusedontheavailabilityofrenewableelectricityandgridconnectionstofuturesitesoftheHYBRITDRIfacility,meaningthatwecanproducegreenhydrogenon-siteonanindustrialscaleusingelectrolysers.Wealsoplantodeveloplarge-scalehydrogenstorage.Overallwebelievethemarketforrenewablehydrogenwilldevelopfastinthefuture,especiallyinEurope,drivenbytheneedtorapidlydecarboniseoureconomy.Thatiswhycontinuingwithsteammethanereforming(SMR)forhydrogenproductionandapplyingCCS(i.e.,bluehydrogen)willnotbethelong-termpreferredsolution.Bythesamelogic,wedonotseetheuseofblastfurnacetechnologyusingfossilcoalassustainable.Anotherdriveristheopportunitytostorehydrogenatlargescalesandprovidegridbalancingserviceswhentheintermittentrenewableelectricitygenerationcapacityincreasesinthefutureenergymix.DECARBONISINGEND-USESECTORS:28GREENH2FPUERTOLLANOI:GREENAMMONIAANDFERTILISERPRODUCTIONINSPAINGreenH2FPuertollanoI(“PuertollanoI”)isagreenhydrogenandgreenammoniapilotprojectsituatedinPuertollano,theSpanishprovinceofCiudadReal.TheprojectisdevelopedinpartnershipbetweenIberdrolaandfertiliserproducerFertiberiawiththetechnicalsupportofSpain’sNationalHydrogenCenter.Currentlyunderconstructionwithatargetedoperationaldateof2021,PuertollanoIisthefirstoffourgreenhydrogenprojectsplannedfordevelopmentundertheFertiberia-Iberdrolapartnership.Oncecompleted,theGreenH2FProjectisexpectedtoaccountforacombined800MWofinstalledelectrolysiscapacityby2027.Designedasoneprojectwithtwosites,PuertollanoIprovidesanintegratedsupplyofgreenhydrogenandoxygenfortheproductionofammoniaandnitricacid.Thefirstsiteconsistsofa100MWsolarPVplantanda5MW/20MWhlithium-ionbatterystoragesystem.Thebatterystoragesystemand35MWofgeneratingcapacitywillbededicatedtogreenhydrogenproduction,withexcesselectricityproductionsoldtothegrid.Thesecondsiteconsistsofa20MWpolymerelectrolytemembrane(PEM)electrolyserwhichwillbelocatedwithinthefertiliserfacilitypremisesattheFertiberiaPuertollanoplant.Theelectrolyserisexpectedtoproduce360kgofhydrogen(H2)/hourand2800kgofoxygen(O2)/hour.5Includesdirect,indirectandinducedemploymentofinvestmentsassociatedwithhydrogengeneration(PVplant,energystorage,powerlineandelectrolyser).Powertotheelectrolyserwillbedeliveredthroughadedicatedundergroundlinebetweenthesites,ensuringthatallenergyusedintheelectrolysisisrenewableandminimisingenvironmentalimpact.Hydrogenproducedwillbebufferedinpressurisedtanks.Oxygenproducedasaby-productofelectrolysiscouldbeusedentirelyinanitricacidunit,whichwillalsoundergoaseriesofmodificationstoimproveitsGHGemissionsandenergyefficiency.Oncecompleted,PuertollanoIisexpectedtoreducenaturalgasrequirementsattheFertiberiaPuertollanofacilitybyover10%.Inall,thedisplacementofanaturalgas-basedprocessandthetechnicalmodificationsintheammoniaandnitricacidproductionwillavoidemissionsofalmost40000tonnescarbondioxide(tCO2)/year(Iberdrola,2021).RequiringaninvestmentofUSD180million(EUR150million),PuertollanoIwillserveasareferenceforfuturedevelopmentsinthemanufacturingofcommercialscaleelectrolyserequipment,themanagementofpowergenerationfromvariablerenewablesourcestodeliverafirmhydrogensupply,andtheintegrationofgreenhydrogensupplywithinanexistingfertiliserproductionsite.ItisestimatedthatPuertollanoIcouldgenerateupto700jobs5andprovidescaleintheregiontoconsolidateitspositionasahydrogenhub.Photo:FertiberiaPRACTICALINSIGHTSONGREENHYDROGEN29WhydidFertiberiapursuehydrogen?HowdidFertiberiafirstgetinvolvedintheproject?MrHerrero:Hydrogenisthemainfeedstockinammoniaproductionandtodateitispredominantlyproducedbythefertiliserindustryusingsteammethanereformingtechnology,basedonnaturalgas.Currently,thefertilisersectoraccountsforoverathirdofthetotalhydrogenconsumedinEurope.Ifwearetomeetdecarbonisationtargetsandreachnet-zeroemissionsby2050,allsectorsneedtodesignandimplementdecarbonisationroadmapsforthecomingyears.Thefertilisersectorcanandshouldtakealeadingroleinthistransition.Policymakersalreadyrecognisetheimportanceofthefertiliserindustryasanearlyadopterofcarbon-neutralhydrogenasfeedstockandhavesetupnationalandEuropeanstrategiestosupportthesector.TheGreenH2FPuertollanoIprojectaimstoofferazero-emissionalternativetoammoniaproductionwhichwillalsoenabledecarbonisedfertiliserproduction.Itisthefirstofitskindintermsofthevolumeofhydrogenproducedandelectrolysingcapacity,aswellasofferinganend-to-endsolutionforthedecarbonisationofthefertiliservaluechain.WhydidIberdroladecidetopursuehydrogen?HowdidIberdrolafirstgetinvolvedintheproject?MrGarcía-Tola:Forthelast20years,Iberdrolahasbeenengagedinthetransitiontoadecarbonisedenergymodel,throughinvestmentsinrenewableelectricity,smartgrids,large-scaleenergystorageanddigitaltransformation.Technologicaldevelopmentoverthesepastyearshasmadeelectricitythebackboneofadecarbonisedenergymodelwiththecombinationofrenewablepowergenerationanddirectelectrification.However,someindustrialusesaswellashard-to-abatesectorswillneedothertechnologicaldevelopments,andthisiswhereweseegreenhydrogenplayingakeyrole.Greenhydrogenwillenableprogressontwofronts:emissionsreductioninsectorsthatcurrentlyconsumehydrogen,producedbyprocessesthatemitCO2,andtheadoptionofhydrogeninsectorsthataredifficulttoelectrify(suchasheavytransportandairandseatransport).GreenH2FPuertollanoIbringstogethertheexpertiseofIberdrolaandFertiberiaandwillhopefullyhelpmovethelearningcurveforward,speedingupthematurityoftechnologiesforgreenhydrogenproductionandshowcasingitasasolutionforefficientdecarbonisation.Whathavebeensomeofthemajorchallengesofdevelopingtheproject?Howwerethesechallengesovercome?MrHerrero:Oneoftheaimsofthispilotprojectwastodemonstrateanend-to-endsolutionwithsignificantscaleattheammoniaproductionlevel.Someofthechallengeswereovercomeattheconcept-designphase,forinstancebysitingthePVplantinthevicinityoftheFertiberiaplantwithbatterystoragecapacityandadedicatedpowerline.Producinggreenhydrogenfromrenewableelectricitysourcesischallenginginitself,asdailyandseasonalfluctuationsneedtobetakenintoaccount.Incorporatingthegreenhydrogenandoxygenintotheconventionalammoniaproductionlineaddsanotherlevelofoperationalcomplexity.Couplingvariablegenerationwithcontinuousdemandrequiresadjustmentstomaintainprocessstability.Toovercomethesechallenges,wedecidedtoupgradethecontrolsystemsoftheammoniaplantandinstallgreenhydrogendailybuffers.Thisallowsustomaintainacertainlevelofstabilityofthehydrogenflowtotheammoniaplant,enablingoptimisedoperationdespitethegenerationcurveoftherenewablesource.InterviewwithDavidHerrero,IndustrialDirector,FertiberiaandMillánGarcía-Tola,HydrogenUnitDirector,IberdrolaDECARBONISINGEND-USESECTORS:30Whatroledidlocalornationalauthoritiesplayinaddressingthesechallenges?MrHerrero:Local,regionalandnationalauthoritieshavebeenverysupportiveoftheproject.TheNationalHydrogenCenter,whichisheadquarteredinthevicinityoftheplant,hasbeenakeystakeholdersincethebeginning,providingtechnicaladviceandsupport.Toreachalevelofdevelopmentneededtobecompetitive,thispublicsupportisamustasweprogressalongthelearningcurveandachieveeconomiesofscale.First-of-a-kindprojectslikethisneedsupportandfundingmechanisms.Goingforwardasprojectsdevelop,governmentandauthoritiesshouldalsofacilitateaccesstoaffordableandabundantrenewableelectricity.Theelectricitymovingthroughournetworkswillbemoreandmorerenewableasthepowersystembecomesincreasinglydecarbonised.Creatingalevelplayingfieldrequiresrobustcertificationmechanismsensuringtherenewableoriginofelectricity.Whataresomeofthekeylessonslearnedfromtheproject?MrHerrero:Therearestillmanylessonstolearnfromtheprojectasitadvancesinconstructionandonceitbecomesoperational.Butoneoftheobviouslessonsisthatitisnotstraightforwardtoconnectgreenhydrogentoanexistingconventionalammoniaplant.Thisisapilotstudyandmanyadaptationstotheammoniaproductionprocesswererequired.Inthefuture,withincreasingratiosofgreentogreyhydrogen6beingincorporated,moremodifications,automatisationsandnewequipmentwillprobablybeneeded.Wehavethetechnicalabilitynowtoimplementandtakefurtherstepsinscalingupgreenhydrogen.Infact,buildingonthisfirstexperience,wehaveannouncedaglobalplanforatotalof800MWofgreenhydrogencapacityacrossfourprojectstobeoperationalby2027.6“Greyhydrogen”ishydrogenproducedfromfossilfuels.Thisglobalplanis40timesthesizeofGreenH2FPuertollanoIandhasthepotentialtosetSpainonatransformationalpathwaytogreenhydrogen.Howdoyouseegreenhydrogenevolvingfromatechnologicalpointofview?Howcompetitivecanitget?MrGarcía-Tola:Hydrogenproductionwithelectrolysisisamatureandknowntechnology,butithasbeenoutpacedbygreyhydrogen,givenitsmuchlowercosts.Threecomponentshavethelargestimpactoncompetitiveness.Thesearethecostoftheelectrolyser,thecostoftheelectricityandtheplantcapacityfactor.Weseelargeimprovementpotentialinelectricitycostsasgenerationcostsinrenewableskeepondecreasing.Electrolyserinvestmentcostswillshowatypicallearningcurveevolutionwithlargecostreductionsasvolumesincrease.Giventhesizeandnumberofprojectsannounced,progressingalongthelearningcurvecanhappenveryquickly.Capacityfactorswillalsoincrease,drivenbytechnologicalevolution.Inall,andconsideringuncertaintyassociatedwithfuturedevelopments,weseeapotentialcostreductionbetween35%and60%,whichcouldmakegreenhydrogencompetitiveby2030.Whatisneededtoacceleratethecontributionofgreenhydrogentodecarbonisationefforts?MrGarcía-Tola:Tomeetthegreenhydrogenplansestablishedinmanyjurisdictions,inadditiontocostreductions,productioncapacitywillneedtobesubstantiallyincreased.Therearealreadyconsolidatedmanufacturersofelectrolysers,butthereareneedsinthevaluechaintoupscalevolume,increasethesizeofmanufacturedelectrolysersanddeveloptheassociatedindustrialnetworks.PRACTICALINSIGHTSONGREENHYDROGEN31Substation30kVElectrolyser20MWH2BufferGreenH2production1080tH2/yrO2production10000tO2/yrBattery5MW/20MWhFertiberiaPlantAmmoniaEmission-freefertilisersPuertollanoIIPVplant100MWDistributionnetworkDedicatedundergroundpowerlineH2O~3200l/hInthissense,wearealsopursuingactionstodevelopthesupplychain.TogetherwiththeBasqueenterpriseIngeteam,IberdrolahasalsofoundedIberlyzer,whichwillbecomethefirstlarge-scalemanufacturerofelectrolysersinSpain.Howdoyouexpectthemarketforgreenhydrogentogrow?Whatdoyouseeasthemajordrivers?MrHerrero:Asmentionedbefore,hydrogeniscurrentlyusedasfeedstockinanumberofindustrialsectorsandcurrentlyitsproductionismostlybasedonfossilfuel-basedprocesses.Thedemandforhydrogen–includingforthefertilisersector–isexpectedtocontinuetogrow.Giventheexistingdemandforhydrogeninthesector,greenhydrogenisalreadyavaluableproduct.Thegoodnewsisthatthetechnologytoproducehydrogenwithrenewableelectricityisknownandalthoughthetechnologylacksscaleandcompetitivenesstoday,itiscertainthatgreenhydrogenwillhaveakeyroleinadecarbonisedeconomy.Evenammoniacouldbeusedasanenergyvectorformanyotheruses,directlyusedatitsdestinationpointorconvertedbacktohydrogen.Ammoniacanalsoplayakeyroleindecarbonisationofcertainhard-to-abatetransportsegments,likedeep-seatransportation,whereitcouldbeusedasacarbon-free,sulphur-freemarinefuel.AlltheseuseswillbenefitfromthelessonslearnedfromtheGreenH2FPuertollanoIproject.ProjectoverviewofGreenH2FPuertollanoISource:IberdrolaDECARBONISINGEND-USESECTORS:32POWER-2-GREENHYDROGEN:INDUSTRIALREVITALISATIONANDISLANDDECARBONISATIONINMAJORCAThePower-2-GreenHydrogenprojectpioneersasolutionforislanddecarbonisationandindustrialreconversioninMajorca,Spain.Oncecomplete,itwillserveasarevitalisationprojectfortheBalearictownofLloseta,whichwassignificantlyimpactedbytheendofcementproduction,amajoremployerinthearea.TheprojectconsistsoftwosolarPVplantsmakingup16megawatts-peak(MWp)ofcombinedgenerationcapacityanda2.5MWPEMelectrolyser.Theoutputfromtheelectrolyserwillsupportmultipleend-useapplications.Althoughthegreenhydrogenproducedwillbemainlyusedtopowertheisland’spublictransportationfleet,somehydrogenwillalsobeinjectedintothegasgridandserveasback-upenergyforbuildings(publicbuildings,ports,hotels,etc.).Withprojectconstructionsettocommencein2021,Power-2-GreenHydrogenisexpectedtocontributesubstantiallytolocalgrossdomesticproduct(GDP)andtothecreationoflocaljobsduringitsconstructionandoperationandmaintenancephases.Onceoperational,theprojectwillgenerate300tonnesofhydrogeneachyearandreduceannualCO2emissionsinMajorcabyover16000tonnes.Asaresult,theislandwillbenefitfromfuelswitchinganddecarbonisationofthelocaleconomy(ACCIONA,2020a).Underapublic-privatealliancemodel,theprojectinvolvesonthepublicside,amongothers,theSpanishgovernmentagencyInstitutoparalaDiversificaciónyAhorrodelaEnergía(IDAE),theBalearicIslandsgovernment,andtheUniversityoftheBalearicIslands.Fromtheprivatesectorside,ACCIONAwillactasco-investoroftheprojectaswellasgreenhydrogentrader(alongwithpartnersEnagás,IDAEandCEMEX)anddeveloperofthetwosolarPVplants.Redexiswillbeinchargeofbuildingthehydrogenpipelinenecessarytomeettheconsumptiontargetssetbytheproject.TheEuropeanCommission’sFuelCellsandHydrogenJointUndertaking(FCHJU)recentlyselectedPower-2-GreenHydrogenforagrantvaluedatUSD12million(EUR10million),makingitthesecond-largestgrantawardedbyFCHJUtoagreenhydrogenprojectandthelargestgranteverofferedtoaMediterraneancountry.Inadditiontothisgrant,theprojecthasreceivedpublicfundingfromIDAE.Thetotalcapitalexpenditureoftheproject,includingsubsidies,totalsapproximatelyUSD60million(EUR50million)(ACCIONA,2020b).Photo:ACCIONAPRACTICALINSIGHTSONGREENHYDROGEN33WhydidtheBalearicgovernmentdecidetopursuehydrogen?HowdidtheBalearicgovernmentgetinvolvedintheproject?MrYllanes:TourismisthemostimportanteconomicsectorintheBalearicIslands,andithasbeenbadlyhitbytheCOVID-19pandemic.Thishashighlightedtheneedtopromoteothersectors,suchastherenewableenergysector.WeplantoinvestalmostEUR500million(privateandpublicfunds)overthenexttwoyearsintheimplementationofrenewablesthatinturnwillcreate17000jobs.Wearepursuinggreenhydrogenasacleanenergysourceandasanopportunitytore-industrialiseLloseta.Itallowsustomovefromcarbon-intensivesectorslikethecementindustrytootherindustries,whichcanreduceemissions,helpusgainknowledgeandpositionusasasustainablepathfinderinEurope.Thisshiftalsooffsetspotentialjoblossesfromthecementplantclosure.Privatecompanies,suchasACCIONAandEnagás,aswellastheSpanishgovernment,areinvolvedintheproject,whichhasbeenactivelysupportedbytheBalearicgovernmentandhasreceivedaEUR10millioninvestmentfromtheEU.WhydidACCIONAdecidetopursuehydrogen?HowdidACCIONAgetinvolvedintheproject?MrMateo:ACCIONAisthelargestpure-playrenewableenergyutilityintheworld,operatingcloseto11GWofrenewableenergycapacityinover16countries.Wearepioneersinrenewables,withassetsinourportfoliothathavebeenoperatingformorethan25years,andnowwelookforwardtobeingpartofthegreenhydrogenrevolution–withemphasisontheword“green”.Hydrogenhasmanycolours,butthefocusshouldbeonhydrogenproducedthroughelectrolysis,viagreenelectricity,whichisgoingtobethesubstituteoffossilfuelsinindustry,transportandmanyotheractivities.Greenhydrogenwillbethesolutioninthemanysectorswhereelectrificationisdifficultandsometimesnotpossible.ThisiswhywearehappytobepartofthefirsthydrogenprojectinSpainwiththeparticipationofourpartners,theSpanishgovernment,theBalearicgovernmentandtheEU,whohavebeenkeyinsupportingus.Whatroledolocalandregionalauthoritiesplayinaddressingthechallengesoftheproject?MrYllanes:TheBalearicgovernmenthashelpedmaketheprojectareality,workingwiththecompaniesinvolvedtomakeitaprojectthatdeservesEUinvestment.Forexample,wedeclaredtheprojectastrategicindustrialprojectoftheBalearicgovernment,whichspeedsbureaucraticprocessing.WehavealsoleasedpubliclandfortheconstructionofsolarPVplantsthatwillpowergreenhydrogenproduction.NowweareworkingwiththecityofPalma’spublicbuscompanytopurchaseafleetofhydrogen-poweredbusesandestimatingthepotentialinvestmentneeded.Wewillalsohelptosellhydrogentoindustries,especiallytohotelsinMajorca,andtopromotegreenhydrogenuseasaddedvalue.ItisanenormousopportunityfortheBalearicIslands.Fromaprivatesectorperspective,whataresomeofthemajorchallengesofdevelopingandoperatingtheproject?MrMateo:Hydrogenisarawmaterialforindustrywithmanyapplications,oranewvectortostoreelectricity.Themainchallengeistoadaptregulationsappropriatelysothatgreenhydrogenisnottreatedasahydrocarbon.Greenhydrogenisanewproductinthemarket,anditneedstobedeployedjointlywiththehelpofgovernmentsandregulatorstofacilitateeasierdeployment.ThelearningcurveforgreenhydrogentechnologywillbesimilartothatofsolarPVpanelsandbatteries.Higherpenetrationofthetechnologywilldrivedownprices,whichinturnwillpromoteevenmoreadoption.Hence,ourobligationistostartquickly,inordertoreducethecostcurveforthetechnologyanditsapplications.InterviewwithJuanPedroYllanes,Vice-PresidentandCounsellorforEnergyTransitionandProductiveSectorsattheBalearicgovernmentandRafaelMateoAlcalá,CEO-EnergyatACCIONADECARBONISINGEND-USESECTORS:34PetraPVplant8vMWpO2~2588tonnes/yearLlosetaPVplant8MWpElectrolyserCompressionandstorageHydroductHydroductHydrogenrechargingstationFuelcellsinpublicbuildings,hotelsandportTransportPublictransportationbusesIndustryHotelsRentalcarsandfleetsH2O~5000m3/yearCompressionandstorageWiththisproject,wearealsopioneeringtheuseofblockchaintoverifythegreenoriginoftheelectricityusedtoproducehydrogen.Currently,wehavenoregulationinthisfield,makingitimportanttoestablishmechanismsthatcanverifygreenhydrogenisinfactgreenhydrogenandnotanyothertypeofproduct.Whateconomicandsocialimpactsdoyouexpecttheprojecttocreateinyourregion?MrYllanes:Oneofthegoalsofthisprojectistobepioneersinthiseconomicdiversification.Itisessentialforus,becausewecannolongeronlyrelyontourism.Renewables,industry,innovation,research–thatisthemodelwewanttoachieveintheBalearicIslands.Weareinvolvingresearchandacademia,suchastheBalearicIslandsUniversity,tocreatefurthereconomicimpact.Wehopethiswillbethefirstofmanysustainableenergyinnovationprojectstobeimplementedinourislands.7Theinterviewwasconductedon28October2020,andtheelectrolyserforthePower-2-GreenHydrogenprojectwaspurchasedinDecember2020.Arethereanyuniqueaspectsofthishydrogenprojectyouwouldliketohighlight?MrMateo:SincethisisthefirstgreenhydrogenprojectinSouthernEurope,itcanserveasafuturereferenceanddrivefasterpenetrationofhydrogen.Weareintheimplementationphaseaswespeakandarebuyingtheelectrolyserintheupcomingweeks.7Insomemonths,theprojectwillcreatejobsandmakeapositivecontributiontothelocaleconomy.Theplantwillproducemorethan300tonnesofgreenhydrogenperyear.Anotherdifferentialaspectisthattheprojectwillbereplicable.Manyindustrialcompaniesareaskingusaboutthefeasibilityofhavingsmallandlocalgreenhydrogenonsiteforownconsumption.Finally,theprojectisbeingbuiltunderaPPP(public-privatepartnership),whichprovidesaclearexampleofthepartnershipsthatareneeded.ProjectoverviewofGreen-2-PowerHydrogenSource:ACCIONAPRACTICALINSIGHTSONGREENHYDROGEN35WhatrolewillgreenhydrogenplayintheBalearicIslands’energytransition?MrYllanes:Greenhydrogencanbeaperfectcompanionforrenewableenergy.HereintheBalearicIslands,theenergytransitionismostlybasedonsolar,whichisanintermittentsourceofenergy.Hydrogencanbeusedtostorerenewableenergyattimesofexcessenergysupply.Ontheotherhand,themaindisadvantageofgreenhydrogenisthelowefficiencyofitsproductionprocesses,whichcurrentlystandataround50%.Tomaintainhighperformanceinfutureenergysystems,hydrogenshouldbe:1)usedinahighlyefficientway;and2)usedinsectorsforwhichwedonotcurrentlyhaveanyalternativerenewableenergysources.Regardinghighlyefficientuses,combinedheatandpowersystemswithfuelcellsareaninterestingalternativeinsomesectors(e.g.,hotelsforthetourismsector).Onthesecondpoint,sectorswithoutrenewablealternativesincludeheavyloadtransport,high-temperatureindustryandmarinemobility.Wedonotforeseetheuseofhydrogeninpassengercars,asthesizeofourislandsmakeselectricvehiclesanefficientalternative.Howdoyouexpectthemarketforgreenhydrogentogrow?Whatdoyouseeasthemajordrivers?MrMateo:Bydemonstratinggreenhydrogen’svalueasarealproductinthemarket,thedemandwillfollow.Thenextdecadewillseemassivepenetrationofrenewablesandalearningcurveforgreenhydrogen.Theexpectationisthatgreenhydrogenwillbecomecost-competitiveby2030.TomeetthepotentialgrowthofgreenhydrogeninSpainfromnowto2030wouldrequireapproximately35000Power-2-GreenHydrogenprojects.Thepotentialishuge,notjustintheBalearicIslandsbutalsointherestofthecountry.Thisiswhywearesointerestedinleadingandcreatinganexamplefortherestofthemarket.Furthermore,wearetryingtodevelopelectrolysercomponentslocally.Thistechnologywillprobablyallow,muchlikewinddidinthepast,thedeploymentoflocalmanufacturingofsomecomponents.Byenablingadomesticsupplychain,wecanalsocontributetotherecoveryoftherenewableenergyindustryinSpain.DECARBONISINGEND-USESECTORS:36WESTKÜSTE100:GREENHYDROGENANDSECTORCOUPLINGINGERMANYTheWestküste100projectaimstoproduceandusegreenhydrogenatanindustrialscalebyintegratingtheenergyandmaterialstreamsofregionalindustriesandshowcasinggreenhydrogen’spotentialasacatalystforsectorcoupling.TheprojectwasinitiatedbyaconsortiumincludingEDFGermany,HolcimGermany,OpenGridEurope,Ørsted,RaffinerieHeide,StadtwerkeHeide,ThügaandthyssenkruppIndustrialSolutions–togetherwiththeRegionHeideDevelopmentAgencyandtheFachhochschuleWestküste(WestCoastUniversityofAppliedSciences).InthefirstphaseoftheWestküste100project,a30MWelectrolyserpoweredbyoffshorewindenergywillbeinstalledatHeideRefinery,situatedonthewesterncoastofSchleswig-Holstein.Formorethan150years,theareahasbeenhometoextractionandrefiningofoilchalkandlaterliquidcrudeoilintolightingoil,fuelsandotherpetrochemicalproducts.Thearea’scloseproximitytothevastoffshorewindresourcesoftheGermanNorthSea,togetherwithitsstronglinktotheGermanpowertransmissiongridandthepotentialforgeologicalcavernstorage,makesHeideRefinerywell-situatedforgreenhydrogenproduction.Oncethefirstphaseiscomplete,the8EstimatedyearlyoutputissubjecttoimplementationoftherevisedRenewableEnergyDirectiveII(RED-II).Article27ofRED-IIstipulatesadelegatedact(apieceoflegislationpassedbytheEuropeanCommissionwhichentersintoforcedirectlyinmemberstates)whichwilldefinetherenewablecharacteroftheoutput(hydrogen)fromgrid-connectedelectrolysersandhowitcontributestowardsthe2030EUtargetof14%renewableenergyinthetransportsector.TheEuropeanCommissionshalladoptthisdelegatedelectrolyserwillbeoneofthefirstlarge-scalegreenhydrogenprojectsinGermanywithanestimatedyearlyoutputof3500-5000tonnesofhydrogen(tH2).8Thefirstphasewillfocusondevelopingandtestingsolutionstoproducegreenhydrogenandreplacefossil-basedhydrogen,servingasareal-lifeplatformtoreviewthetechnical,operational,economicandregulatorychallengesofscalinggreenhydrogenproduction.Areasoffocusincludeoperationandmaintenanceoftheelectrolyserplant;theplant’sinterfacewiththepowergrid;theproduction,transportationandstorageofhydrogen;andtheoverallsystemintegrationofmaterialflowsandbusinessmodels.Theconsortiumplanstobuildontheexperiencesfromdeveloping,integratingandoperatingtheinitial30MWelectrolysertoscaleuphydrogenproductionto700MWandcombinehydrogenproducedwithcapturedCO2fromthenearbyLägerdorfcementplanttoproducesyntheticmethanol.Thissyn-methanolcanthenbefurtherprocessedintoothersynthetichydrocarbons–forexample,asanindustrialrawmaterialorasaviationfuelfornearbyHamburgAirport.Aspartofthiseffort,theWestküste100projectisalsoexploringthefeasibilityoffeedingsurplusPhoto:ShutterstockPRACTICALINSIGHTSONGREENHYDROGEN37WhydidØrsteddecidetopursuehydrogen?HowdidØrstedfirstgetinvolvedintheproject?AtØrsted,wehavewitnessedfirst-handhowindustrialisingandscalingofrenewableenergy–inourcase,especiallyoffshorewindgeneration–havedrivendowncostsandmadegreenelectricitycheaperthancoal,gasornuclearpowerplantsinmostpartsoftheworld.However,whilewindandsolarenergywillbethebackboneoftheglobaleffortstolimitclimatechange,hardworkremainstocompletethegreentransformationofoursocieties.Sectorssuchascertainheavyindustriesandheavy-dutyroadtransport,deep-seashipping,andaviationarestillreliantonfossilfuelsforenergyorasfeedstockandcannotfeasiblybeelectrifieddirectly.Renewablehydrogen10canactasabridgetothegreentransformationforthesesectors,eitheraspurehydrogenorincombinationwithsustainablysourcedcarbonornitrogen,assustainablee-fuels.Buildingonourexperiencedevelopingandoperatingrenewablegenerationassets,wehaveanambitiontohelpacceleratethedevelopmentanddeploymentofrenewablehydrogenproductionandpower-to-Xtechnologies,andtohelpgrowthemarketforsustainablee-fuels.10“Renewablehydrogen”referstogreenhydrogen.Tothisend,refineries–withtheirestablisheddemandandinfrastructureforhydrogen–arerelevantforthefirstprojects.ØrstedisalreadypresentintheGermanmarket,whereweoperateapproximately1.3GWofgenerationcapacityacrossfouroffshorewindfarms.TheHeideregion’sdemonstrateddemandforhydrogen,existinginfrastructure,andindustrialandpoliticalenvironmentcommittedtodevelopingafunctioninghydrogeneconomymakeitanideallocationtoestablishandscalerenewablehydrogenproduction.Whathavebeensomeofthemajorchallengesofdevelopingandoperatingtheproject?Howwerethesechallengesovercome?Theprojectisstillinitsearlystages,butonemainchallenge,asisthecasewithanyrenewablehydrogenproject,istoovercomethecostbarrier.Hydrogenproducedinwaterelectrolysisplantsissignificantlymoreexpensivethanfossil-basedhydrogen.Onereasonisthatelectrolysertechnologyisstillrelativelyexpensive.Thelargestelectrolysersinoperationtodayareinthe10MWscale.ButwithWestküste100andotherprojectslikeitbeingannounced,wehopetoseeeconomiesofscaleandanindustrialisationofthesupplychainbringdowncostsoverthenextdecade.InterviewwithAndersNordstrøm,Vice-President,Hydrogen,Ørstedoxygenfromtheelectrolyserintothecombustionprocessattheplant.Whenfullyrealised,thiswouldpotentiallyreduceNOxemissionsfromthecementplantbyupto60%andturncarbonemissionsfromawasteproductintoaresourcethatcouldsubstituteforfossilfeedstockselsewhere.ExcessheatfromtheelectrolyserwillfurthermorebeusedtoheatlocalresidencesandbusinessesintheHeidearea.actby31December2021atthelatest.9Seefootnote8.ThefirstphaseoftheWestküste100projecthasatotalbudgetofUSD108million(EUR89million).Theprojectisfinancedbyconsortiumpartners,alongwithapprovedfundingofUSD36million(EUR30million)fromtheReallabor(real-worldlaboratory)programmeundertheFederalMinistryforEconomicAffairsandEnergyinGermany.TheprojectpartnersreceivedfundingconfirmationfromtheGermangovernmentinAugust2020andarenowworkingtowardsafinalinvestmentdecisiononthefirstphaseoftheproject.Thisisstill,however,subjecttofinalimplementationoftheEURenewableEnergyDirectiverecast(RED-II)innationallawanditsdelegatedact.9DECARBONISINGEND-USESECTORS:38Furthermore,mostofthefossilhydrogenproducedtodayisbasedonnaturalgas,whichisacheaperfeedstockthanelectricity.Toclosethecostgapbetweenrenewableandfossilhydrogenandenableaviablebusinesscaseforprojects,regulatoryincentivestooff-takerenewablehydrogenandtofostercostconvergenceareneeded.FortheWestküste100project,themostimportantleverisexpectedtocomefromtheRED-II,whichmandatesatleast14%ofrenewableenergyintransportin2030,includingtheoptionofusingrenewablehydrogentoachievethistarget.Whatroledidlocalornationalauthoritiesplayinaddressingthesechallenges?Westküste100isthefirstlarge-scalehydrogenprojecttoreceivefundingthroughthefederalGermanReallaborprogramme,whichhasenabledustogoforwardwiththeengineeringofthefirstphase.ThisfundingconfirmsthesupportofpoliticalactorstoovercomeregulatorybarriersanduncertaintieswhilealsoexploringwhatpotentialfutureregulationoftheGermanhydrogeneconomycouldlooklike.SpecialattentionwillbefocusedonthetranspositionofRED-IIintonationallegislationandonthedelegatedactdefiningwhatittakesforhydrogentocountas“renewable”.Thiswillcarryimportantweightintheproject.WhilescalingupproductionandutilisationofrenewablehydrogeninGermany–andelsewhereinEurope–stillfacesmuchtechnical,economicandregulatoryuncertainty,theactiveengagementofregionalandfederalpolicymakersinbringingthisprojecttofruitionhasgreatlyincreasedourchanceofsuccessandofdevelopingthenextphasesoftheproject.Meanwhile,theprojecthasalsobeenactivelypromotedbylocalauthoritiesandcoordinatedthroughtheHeideRegionDevelopmentAgency,includingmanagingnetworkingactivitiesandlinkstootherinstitutions,academiaandprojectsinthearea.Whataresomeofthekeylessonslearnedfromtheproject?Theconsortiumhasalreadylearnedvaluablelessonsfromtheearlydevelopmentphaseofthisprototypeproject.Mostimportantly,theWestküste100projectunderlinesthebenefitsofaholisticapproachtoestablishingindustrialproductionofrenewablehydrogen.Toovercomethecostgap,projectsmustidentifyapplicationswithhighaddedvalueofrenewablehydrogenandwithenduserswhoarewillingtopaythepremiumforit.Thismaybeoff-takersofhydrogenwhowanttoormustreducetheircarbonfootprint.Inthelongerrun,ifthetransparencyisinplace,itcouldbeprivateconsumerswillingtopaymore,e.g.,fora“green”airlineticket.Inaddition,thevalueofflagshipprojectswithparticipationfrombothproducersandconsumersishigh.Partnershipscansignificantlyreduceinvestorrisk.Theconsumerwillknowsupplyisavailablebeforeinvestingininfrastructuretooff-takeanduserenewablehydrogen,andthedeveloperoftheelectrolyserwillknowthereisdemand.Goingforward,thisisalsoanoteworthylessontopolicymakersseekingtopromoterenewablehydrogen.Finally,whenanalysingthebusinesscaseofrenewablehydrogenandpower-to-XintheHeideregion,itbecameapparentthatincentiveshaveanimportantroletoplaytohelpprojectssuchasWestküste100getoffthegroundandmoregenerallytocreateamarketforrenewablehydrogen.PRACTICALINSIGHTSONGREENHYDROGEN39Howdoyouexpectthemarketforrenewablehydrogentogrow?Whatdoyouseeasthemajordrivers?Renewablehydrogenhasanimportantroletoplayindecarbonisingoursociety.Thiscanbebyreplacingconsumptionoffossilhydrogenasindustrialfeedstockorasanenergycarrierforindustryandheavytransport–eitherinitspureformor,combinedwitheithercarbonornitrogen,asothersustainableefuelssuchase-methanolore-kerosene.Developingrenewablehydrogenreliesonthreeimportantfactors.Ahighrenewableshareofpowergeneration,competitivepowercosts,andpoliticaldeterminationtoachievedeepdecarbonisationwillcreategeneralincentivestodecarbonise,e.g.,throughcarbonpricing,aswellasexplicitsupportforrenewablehydrogenandpower-to-Xtechnologies.Inmarketsandgeographieswhereallthreearepresent,usingnorthwesternEuropeasanexample,weseeafuturemarketstartingwithlocalpeer-to-peerprojects,whererenewablehydrogenprojectsaredevelopedtomatchaspecificuse-case,andwiththeparticipationofbothproducersandconsumers.Intherun-upto2030,wehopetheseprojectswillproliferateand,wheresuccessful,growinsizeandscopeintoregionalhydrogenclusters.Thesemighttypicallyincludeoneormorelarge-scaleelectrolysersconnectedtoadedicatedhydrogeninfrastructure,perhapsincludingstorage,withhydrogenbeingusedforlarge-scalee-fuelproduction.Inthelongerterm,beyond2030,suchclusterscouldconnecttoanationaloreventrans-national“backbone”–ahydrogentransmissiongridandmarket.Here,hydrogenproducedfromelectrolyserssituatednearareaswithlargerenewableresourcepotentialcouldbepipedtoindustrialusers,therebyalsosavingcostsonelectricaltransmissioninfrastructure.OffshorewindBusinessparkGasgridRefinerySyntheticfuels(hydrocarbon)CementproductionO2:OxyfuelCO2:CaptureSyn-keroseneSyn-gasSyn-petrolHamburgAirportRenewableenergyOffheatCavernoperationH2OElectrolyserMethanolsynthesisMeOHProjectoverviewofWestküste100Source:ØrstedDECARBONISINGEND-USESECTORS:40REFERENCESACCIONA(2020a),GreenHyslandinMallorca,thefirstgreenhydrogenprojectinaMediterraneancountryduetogetEuropeanfunding,www.acciona.com/updates/news/green-hysland-in-mallorca-the-first-green-hydrogen-project-in-a-mediterranean-country-due-to-get-european-funding/(accessed29April2021).ACCIONA(2020b),ACCIONAandEnagáslaunchgreenhydrogenprojectinMallorca,www.acciona.com/updates/news/acciona-and-enagas-launch-green-hydrogen-project-in-mallorca/(accessed29April2021).AirProducts(2020),AirProducts,ACWAPowerandNEOMsignagreementfor$5billionproductionfacilityinNEOMpoweredbyrenewableenergyforproductionandexportofgreenhydrogentoglobalmarkets,www.airproducts.com/news-center/2020/07/0707-air-products-agreement-for-green-ammonia-production-facility-for-export-to-hydrogen-market(accessed15February2021).ARENA(2019),RenewablefuturebeckonsforQueenslandammoniaplants,https://arena.gov.au/blog/renewable-future-beckons-for-queensland-ammonia-plants/(accessed8May2021).BNEF(2021),1H2021hydrogenlevelizedcostupdate,BloombergNEF.BNEF(2020),Newenergyoutlook,BloombergNEF.CommonwealthofAustralia(2019),Australia’sNationalHydrogenStrategy,www.industry.gov.au/data-and-publications/australias-national-hydrogen-strategy(accessed11March2021).EnergyandClimateIntelligenceUnit(2021),TakingStock:Aglobalassessmentofnetzerotargets,Energy&ClimateIntelligenceUnitandOxfordNetZero,https://ca1-eci.edcdn.com/reports/ECIU-Oxford_Taking_Stock.pdf?mtime=20210323005817&focal=none(accessed13April2021).EnergyMinisters(2021),Post2025marketdesignfortheNationalElectricityMarket(NEM),https://energyministers.gov.au/publications/post-2025-market-design-national-electricity-market-nem(accessed12April2021).EnergyTransitionsCommission(2021),Makingthehydrogeneconomypossible:Acceleratingcleanhydrogeninanelectrifiedeconomy,www.energy-transitions.org/publications/making-clean-hydrogen-possible(accessed13May2021).EuropeanCommission(2020),CommunicationfromtheCommissiontotheEuropeanParliament,theCouncil,theEuropeanEconomicandSocialCommitteeandtheCommitteeoftheRegions:Ahydrogenstrategyforaclimate-neutralEurope,EuropeanCommission,Brussels,https://ec.europa.eu/energy/sites/ener/files/hydrogen_strategy.pdf.PRACTICALINSIGHTSONGREENHYDROGEN41GoldmanSachsResearch(2020),Greenhydrogen:Thenexttransformationaldriveroftheutilitiesindustry,www.goldmansachs.com/insights/pages/gs-research/green-hydrogen/report.pdf(accessed12May2021).HYBRIT(2021),Afossil-freefuture,www.hybritdevelopment.se/en/a-fossil-free-future/(accessed11April2021).HydrogenandFuelCellStrategyCouncil(2019),Thestrategicroadmapforhydrogenandfuelcells,www.meti.go.jp/english/press/2019/pdf/0312_002b.pdf(accessed21April2021).HydrogenCouncil(2021a),Hydrogeninsights:Aperspectiveonhydrogeninvestment,marketdevelopmentandcostcompetitiveness,https://hydrogencouncil.com/wp-content/uploads/2021/02/Hydrogen-Insights-2021.pdf(accessed14March2021).HydrogenCouncil(2021b),Hydrogendecarbonizationpathways:Potentialsupplyscenarios,https://hydrogencouncil.com/wp-content/uploads/2021/01/Hydrogen-Council-Report_Decarbonization-Pathways_Part-2_Supply-Scenarios.pdf(accessed16May2021).HydrogenCouncil(2020),Pathtohydrogencompetitiveness:Acostperspective,https://hydrogencouncil.com/wp-content/uploads/2020/01/Path-to-Hydrogen-Competitiveness_Full-Study-1.pdf(accessed18April2021).HydrogenCouncil(2017),Hydrogenscalingup:Asustainablepathwayfortheglobalenergytransition,https://hydrogencouncil.com/wp-content/uploads/2017/11/Hydrogen-scaling-up-Hydrogen-Council.pdf(accessed13May2021).Iberdrola(2021),IberdrolawillconstructthelargestgreenhydrogenplantforindustrialuseinEurope,www.iberdrola.com/about-us/lines-business/flagship-projects/puertollano-green-hydrogen-plant(accessed14May2021).IEA(2021),Netzeroby2050:Aroadmapfortheglobalenergysector,InternationalEnergyAgency,https://iea.blob.core.windows.net/assets/4719e321-6d3d-41a2-bd6b-461ad2f850a8/NetZeroby2050-ARoadmapfortheGlobalEnergySector.pdf(accessed18May2021).IEA(2020),Electricityinformation:Overview,InternationalEnergyAgency,www.iea.org/reports/electricity-information-overview(accessed13May2021).IEA(2019),Thefutureofhydrogen:Seizingtoday’sopportunities,OECD,Paris.IncitecPivotLimited(2020),IPLMouraQNPSiteLeaflet,IncitecPivot,www.incitecpivot.com.au/~/media/Files/IPL/Work%20with%20us/ipl_moura_qnp_site_leaflet.pdf.IRENA(2021a),Greenhydrogensupply:Aguidetopolicymaking,InternationalRenewableEnergyAgency,AbuDhabi.IRENA(2021b),Renewablecapacitystatistics2021,InternationalRenewableEnergyAgency,AbuDhabi.IRENA(2021c),Worldenergytransitionsoutlook:1.5°Cpathway,InternationalRenewableEnergyAgency,AbuDhabi.IRENA(2020a),Globalrenewablesoutlook:Energytransformation2050,InternationalRenewableEnergyAgency,AbuDhabi.IRENA(2020b),Greenhydrogen:Aguidetopolicymaking,InternationalRenewableEnergyAgency,AbuDhabi.IRENA(2020c),Greenhydrogencostreduction:Scalingupelectrolyserstomeetthe1.5⁰Cclimategoal,InternationalRenewableEnergyAgency,AbuDhabi.IRENA(2019),Innovationlandscapebrief:Renewablepower-to-hydrogen,InternationalRenewableEnergyAgency,AbuDhabi.DECARBONISINGEND-USESECTORS:42IRENA(2018),Hydrogenfromrenewablepowertechnologyoutlookfortheenergytransition,InternationalRenewableEnergyAgency,AbuDhabi.IRENACoalitionforAction(2021),Companiesintransitiontowards100%renewables:Focusonheatingandcooling,InternationalRenewableEnergyAgency,AbuDhabi.IRENA,IEAandREN21(2020),Renewableenergypoliciesinatimeoftransition:Heatingandcooling,IRENA,OECD/IEAandREN21.Kao,S.(2020),“SouthKorea’shydrogenstrategyandindustrialperspectives”,ÉditoÉnergie,IFRI,www.ifri.org/sites/default/files/atoms/files/sichao_kan_hydrogen_korea_2020_1.pdf(accessed14March2021).Meng,X.etal.(2020),“StatusquoofChinahydrogenstrategy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