Hydrogen Economy Outlook - content.macquarie.com
Transcript of Hydrogen Economy Outlook - content.macquarie.com
Hydrogen Economy OutlookMACQUARIE KOREA GREEN ENERGY DAY
Ali Izadi
@AI_Energy
November 2, 2021
2 November 2, 2021
1. Hydrogen can help decarbonize hard-to-abate sectors, if produced cleanly
2. Clean hydrogen will get cheaper than fossil-fuel based hydrogen by 2030
3. Clean hydrogen demand grows rapidly, but significant technical and policy
challenges remain
Key messages
3 November 2, 2021
Source: International Energy Agency, Morgan Stanley. See notes pane for notes.
The production of hydrogen is already a big, and polluting, businessSupply and demand for hydrogen globally, 2018 Key statistics, 2018
● 117MMT produced
● $130 billion in sales
● Over 99% derived
from fossil fuels
● Releases 830MtCO2
(2.2% of global energy
related CO2)
● Consumes around 6%
of natural gas and 2%
of coal
4 November 2, 2021
Source: BloombergNEF. *Note: some of these sectors could also use hydrogen for its chemical properties, such as fertilizers, plastics, fuel refining and steel.
Using the energy in H2 could help decarbonize hard-to-abate sectors…
Chemicals
ProductsBuildings
Fuel for
H2
Residential &
commercial
Industry
Steel Cement
Paper Food
Aluminum
Heavy transport
Power
Electricity peaking
and seasonal
balancing
Fertilizers*
Plastics*
Fuel refining*
Feedstock forHeat for
Steel* Glass
Metallurgy Food
5 November 2, 2021
…but for H2 to cut emissions, it needs to be made it without releasing CO2
‘Green’ H2 from
renewable
electricity
‘Blue’ H2 from fossil
fuels with carbon
capture and storage (CCS)
‘Turquoise’ H2 from
methane pyrolysis
Pink / yellow / purple:
• From nuclear electricity
or biomass
• These color labels are
applied inconsistently
Not CO2-free:
• ‘Gray’ H2 from fossil
fuels without CCS
• H2 from electrolysis
powered by high-carbon
grid electricity
Source: BloombergNEF. Image source: Wikimedia.
6 November 2, 2021
1. Hydrogen can help decarbonize hard-to-abate sectors, if produced cleanly
2. Clean hydrogen will get cheaper than fossil-fuel based hydrogen by 2030
3. Clean hydrogen demand grows rapidly, but significant technical and policy
challenges remain
Key messages
7 November 2, 2021
0.0
14.9
29.8
44.6
59.5
74.4
89.3
0.0
2.0
4.0
6.0
8.0
10.0
12.0
2 3 4 5 60.0
14.9
29.8
44.6
59.5
74.4
89.3
0.0
2.0
4.0
6.0
8.0
10.0
12.0
2021 2030 2050
$/MMBtu$/kg (real 2020)
Renewable H2
‘Blue’ H2 from
natural gas
with CCS
‘Blue’ H2 from
coal with CCS
Source: BloombergNEF. Note: CCS = carbon capture and storage. Assumes equal CCS costs in all countries.
Today, making H2 from renewables is expensive, but that will changeHydrogen production costs, 2021-2050
8 November 2, 2021
Source: BloombergNEF Hydrogen: The Economics of Production From Fossil Fuels (web | terminal)
Costs of ‘gray’ and ‘blue’ hydrogen largely depend on fossil fuel pricesLevelized cost of H2 production
from natural gas reforming
Levelized cost of H2 production
from coal gasification
0
1
2
3
4
30 40 50 60 70 80 90 100 110 120
Coal price ($/metric ton)
Levelized cost of H2 ($/kg)
With CCS (2050)
0
1
2
3
4
1 2 3 4 5 6 7 8 9 10 11
Natural gas price ($/MMBtu)
Levelized cost of H2 ($/kg)
With CCS (2050)
9 November 2, 2021
1. Hydrogen can help decarbonize hard-to-abate sectors, if produced cleanly
2. Clean hydrogen will get cheaper than fossil-fuel based hydrogen by 2030
3. Clean hydrogen demand grows rapidly, but significant technical and policy
challenges remain
Key messages
10 November 2, 2021
Other fuels
Hydrogen
Natural gas
indicates the decrease in energy density when storage is accounted forDiesel
Methanol
LNG -162 C
AmmoniaLH2 -253 C
CH2 700 bar
NMC battery H2
CNG 250 bar
Gasoline
Natural gas0
10
20
30
40
0 20 40 60 80 100 120 140
Gravimetric energy density (MJ/kg)
Volumetric energy density (MJ/l)
Liquid hydrocarbons
Heavy Light
More space required
Less space
required
Source: BloombergNEF, The Engineering ToolBox. Note: uses high heating values (HHV).
Hydrogen is light but takes up a lot of space compared to fossil fuels…Volumetric and gravimetric energy densities of different fuels
11 November 2, 2021
…in other words, storing hydrogen is harder than storing fossil fuels…
Source: Cenergy. *Note: the exact ratio depends on the energy density of the natural gas in question.
Compressed natural gas Compressed hydrogen
3-4x
12 November 2, 2021
Source: BloombergNEF. *Note: the exact ratio depends on the energy density of the natural gas in question.
Compressed natural gas Compressed hydrogen
…and transporting H2 is harder than transporting natural gas for the same reason
3-4x
13 November 2, 2021
Source: Flaticon.com. *Note: 1-1.2x, depending on the calorific content of the natural gas in question.
Piped natural gas Piped hydrogen
Pipeline transport of H2 is comparable to that of natural gas
1-1.2x
14 November 2, 2021
Source: BloombergNEF.
Producing and using hydrogen can be inefficient
H2
68%
Total efficiency:
31%
Use H2 to
generate
electricity
Use electricity to
make H2
Store H2 in a
pressurized
tank
Round-trip efficiency of electrical storage via H2
15 November 2, 2021
Hydrogen has better prospects in some sectors than in others
Source: BloombergNEF, concept from Liebreich Associates
Unavoidable sectors
cannot decarbonize without
using clean hydrogen.
High potential sectors
need a low carbon price to
adopt H2, or other methods
of CO2 removal cost more.
Medium potential sectors
may find H2 competitive in
some circumstances.
Low potential sectors
could use some H2 under
special circumstances.
Uncompetitive sectors
have cheaper alternatives
to cut CO2.
High potential
Medium potential
Uncompetitive
Unavoidable
Low potential
Oil
refining
Methanol
productionAmmonia
productionNH3
Cement
Ships Aircraft
Trucks,
buses
Heating
homes
Passenger
cars
Steel
production
Peaking /
seasonal
power
Aluminum
production
The prospects for widespread adoption of clean H2 in various sectors
16 November 2, 2021
Green Scenario Gray Scenario Red Scenario
Three pathways to meet the carbon budget required for a well-below two-degrees pathway
Electrification and
renewable energy
“Green”
hydrogen
Electrification and
renewable energy
Electrification and
renewable energy
Fossil fuels +
CCS + removals
“Blue”
hydrogen
“Red”
hydrogen
Nuclear
power
Bioenergy
Recycling
Demand-side efficiency
Bioenergy Bioenergy
17 November 2, 2021
‘Green’ scenario ‘Red’ scenario ‘Gray’ scenario
How much H2 is used will depend on whether and how decarbonization occurs
Source: BloombergNEF New Energy Outlook 2021 (web | terminal). Note: excludes existing market of 117Mt.
Future H2 demand will depend
on policy. BNEF’s New Energy
Outlook 2021 presents three
scenarios.
Green scenario: net-zero is
reached in 2050 via renewable
power, with hydrogen demand
rising 11 times.
Red scenario: nuclear replaces
H2 in power sector.
Gray scenario: the world
reaches net zero using fossil
fuels with CCS.
Should we reach net zero by
2050, a mixture of all three
scenarios is likely. H2 demand
would be lower if we do not reach
net zero.
0
200
400
600
800
1,000
1,200
1,400
2020 2030 2040 2050
Mt
0
200
400
600
800
1,000
1,200
1,400
2020 2030 2040 2050
Mt
0
200
400
600
800
1,000
1,200
1,400
2020 2030 2040 2050
Mt
0
1000
2020 2030 2040 2050
MMtPower Non-energy use Other Shipping Rail
Aviation Road Commercial Residential Other industry
Petrochemicals Cement Aluminum Steel
18 November 2, 2021
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Ali Izadi
@AI_Energy