IRENA sees renewable hydrogen at least cost-possible within decade

18 December 2020

Hydrogen produced with renewable electricity could compete on costs with fossil fuel alternatives by 2030, according to a new report from the International Renewable Energy Agency (IRENA). A combination of falling costs for solar and wind power, improved performance as well as economies of scale for electrolyzers could make it possible.

A combination of cost reductions in electricity and electrolyzers, combined with increased efficiency and operating lifetime, can deliver 80% reduction in green hydrogen cost. Source: IRENA

The report—Green Hydrogen Cost Reduction: scaling up electrolyzers to meet the 1.5 C climate goal—looks at drivers for innovation and presents strategies that governments can peruse to reduce the cost of electrolyzers by 40% in the short term and by up to 80% in the long term.

Green hydrogen could play a critical role in decarbonization strategies, particularly so where direct electrification is challenging in harder-to-abate sectors, such as steel, chemicals, long-haul transport, shipping and aviation. However, regulations, market design and the costs of power and electrolyzer production are still major barriers to the uptake of green hydrogen, the IRENA report says.

Today, green hydrogen is 2-3 times more expensive than “blue” hydrogen, produced from fossil fuels in combination with carbon capture and storage (CCS). The production cost for green hydrogen is determined by the renewable electricity price, the investment cost of the electrolyzer and its operating hours.

Renewables have already become the cheapest source of power in many parts of the world, with auctions reaching record price-lows below US$20 per megawatt-hour (MWh). While low-cost electricity is a necessary condition for competitive green hydrogen, investment costs for electrolysis facilities must fall significantly too. IRENA’s new study identifies key strategies and policies to reduce costs for electrolyzers through innovation and improved performance aiming to scale up electrolyzers from today’s megawatt to multi-gigawatt (GW) levels. Standardization and mass-manufacturing of the electrolyzer stacks, efficiency in operation as well as the optimization of material procurement and supply chains will be equally important to bring down costs. For that, today’s manufacturing capacity of less than 1 GW would have to massively grow beyond 100 GW in the next 10 to 15 years. In the best-case scenario, using low-cost renewable electricity at US$20/MWh in large, cost-competitive electrolyser facilities could produce green hydrogen at a competitive cost with blue hydrogen already today. If rapid scale-up and aggressive electrolyzers deployment take place in the next decade, green hydrogen could then start competing on costs with blue hydrogen by 2030 in many countries, making it cheaper than other low-carbon alternatives before 2040, IRENA’s analysis shows.

"Hydrogen produced with renewable electricity"..... is a scam. Energy produced from renewables is a too valuable resource to be wasted in H2 infrastructure. The complete cycle from production to final use is horribly inefficient. If it can't be achieved via implementation of suited bacteria to decompose H2O into Hydrogen and Oxygen at mass scale, then it is better to just forget it.

@yoatman

Why do you make comments without having the least idea about the technologies involved?

The most favourable areas with ample solar and wind resources are miles from anywhere, which is why the land is cheap.

There is no way of even using the power without turning it into a chemical of some sort, so the choice you are presenting does not exist.

And as the energy authorities in every country of the world realise, decarbonisation simply can't take place without hydrogen, which is why it is such a big part of all their plans

Light vehicle transport is just one small part of the puzzle, and it is ludicrous to pretend that batteries can tackle much of the rest.

Figure ES1 shows how up to 85% of green
hydrogen production costs can be reduced in the
long term by a combination of cheaper electricity
and electrolyser capex investment, in addition to
increased efficiency and optimised operation of
the electrolyser.

@yoatmon stated: "Energy produced from renewables is a too valuable resource to be wasted in H2 infrastructure. "
Reply: RE is used directly in the grid or stored in batteries whenever possible, and only the grid-surplus RE will be used to make H2.
Grid electricity is only 1/3 to 1/4 of total energy consumption, so we will need to overbuild RE capacity to be 5 times higher than the grid's peak demand to meet all energy demand. As such, we will have grid-surplus energy for the majority of the time, except when RE output will be down to 1/5 of peak output. During which time, ALL of the RE output will be devoted to the grid. When RE output is below grid's demand, then gas turbines will have to be turned on burning H2 as fuel, but this is a rare event, due to the overwhelming RE capacity.

Notice that due to the rare event of the grid needing power backup, grid-utility battery storage will NOT be cost-effective due to infrequent cycling. Battery need to be cycled every 1-2 days in order to use up all of its cycle life during its limited shelf life of 10-20 years.

This is dispatchable demand scheme to take advantage of intermittency of RE in order to require very little grid-utility storage and very little wasteful use of H2 to generate electricity.

Please note that for industrial use and for heating purposes, H2 has efficiency near 100%. New higher-temp steam electrolysis has efficiency of 90% on HHV basis even when accounted for the heat input, so we will have 90% round-trip efficiency, to rival any other e-storage media, comparable with battery's efficiency.

For light vehicles, Plug-in FCV that can use grid electricity for 80% of total mileage will overcome the inefficiency of FCV, and only needing H2 for long trips. For Heavy-duty vehicles for long-distance, the use of H2 permit significant gain in payloads over the use of battery. Short-trip HDV can be battery powered.

In summary, judicious use of RE which involves direct grid use, battery storage, and H2 for industrial and heating purposes and for long-trips in vehicles will make the most out of valuable RE resources. The true answer is the word AND instead of EITHER or OR, in the case of RE.

BOTTOM LINE: it's GreenWashing

Don't believe all you hear about H2:
https://cleantechnica.com/2020/12/18/big-oil-is-fueling-the-hydrogen-rush/

dursun,
You throw around the term as if you know something,
if you do spit it out.

How is your fight against those fake moon landings going?

You simply ignore the bits of reality you don't fancy.

Falling costs for renewables are a fact.

Falling costs for electrolysers are a fact - you can buy them right now way cheaper than a decade ago.

Mixing hydrogen in NG pipelines for delivery and extracting it where needed are also facts.

Hydrogen storage is orders of magnitude cheaper than batteries, and the notion that batteries alone can do the job of enabling renewables at high penetration rates is a fantasy.

What I didn't mention in my initial post: I detest monopolies of any kind especially OPEC and big oil not to mention the pollution they cause worldwide. In this sense, H2 is just a replacement for present active structures. I've been enjoying true independence for the past 15 years and sincerely regret that technological progress was too slow - since the first oil crisis in 1973 - to have enabled that situation since then which I'm enjoying now.

Roger,
hydrogen for heating is the most preposterous use one can imagine.

Option A: use a heat pump, with a positive COP which can give you up to 2 units of heat for each unit of electricity
Option B: bring an hydrogen pipe (with all its problems) to your home, burn 1 unit of heat which took nearly 2 units of electricity to synthesize.

I cannot imagine any rational being choosing Option A.

Even where a heat pump can't work, simple resistive electric heat is much better than hydrogen! Better efficiency without the expensive installation.

Oops, I meant "any rational being choosing Option B".

@peskanov

That is because you are utterly ignorant of the figures behind the engineering proposals, and prefer imaginary non-solutions.

The electricity does not appear by magic, and if you want a high proportion of renewables in the grid it has to be stored as chemical energy to cope with its periodicity.

So Japan now has 300,000 home fuel cells running on natural gas, where the heat from reforming the gas to hydrogen to produce electricity is used for heating water, so having an overall efficiency of over 90% for thermal plus electrical, an increase in efficiency of natural gas use of around 30% against central generation and transmission.

Real engineering plans as opposed to fantasy move on from that to allow a greater proportion of hydrogen in the natural gas grid, so that for instance in the UK by 2025 all gas boilers are to be compatible with 100% hydrogen.

Hydrogen also provides for year round 100% renewably powered blocks of flats in northern latitudes for instance in Sweden and integrates just fine with home solar, heat pumps and so on.

Here are the UK's plans out to 2035, when much of the grunt work has to be done to enable zero in 2050:

https://www.theccc.org.uk/publication/sixth-carbon-budget/

If you want to critique those plans, let us see a detailed, numerical rebuttal of the relevant criteria

You are fantasising.

Get in touch with reality.

Davemart,
"Heat", and "combined heat and power" are two different terms and two different uses fuel. I was replying about "heat", which was proposed by Roger.

BTW, combined heat and power does not make sense in all countries either. We don't have much use for that much hot water in the mediterranean countries for example. And you still have to factor the crazy cost of the fuel cells and electrolizers. Show me the numbers.

Next, "Japan did X things" is not argument at all. The USA & Brazil still supports that criminal ethanol for cars nonsense, so what? The fact that a whole country pursues a tech does not make it legit. Right now Japan has a project about getting hydrogen from lignite in Australia and importing it by ship; I am pretty sure it does not make sense to you or anybody here in greencarcongress, does it?

Injecting hydrogen in gas pipes is just greenwashing. That electricity is much better spent using it directly, no matter if we are talking about cooking or heating.
Hydrogen as storage is just the most expensive and inefficient way of storing renewable electricity there is. Even CAES would be cheaper.

The only rational use I can see for hydrogen is using it as feedstock for synthetic fuels and other product.

I will check this UK plan, but I have seen plenty of them through the years and they are usually plenty of wishful thinking and happy happy economic assumptions.

@peskanov

'That electricity is much better spent using it directly, no matter if we are talking about cooking or heating.'

Sure.

So stick to fossil fuels.

If you want to use renewables, it is not available when you want it and needs storing.

That is 'why hydrogen'

You must imagine that all the engineers in all the energy authorities in the world who universally are leveraging hydrogen to enable a lot of renewables are morons.

' I have seen plenty of them through the years '

And obviously understood none of them.

The 'alternative' you suppose does not exist.

Show me the plan, with the numbers to decarbonise without using hydrogen.

There isn't one, from any energy authority anywhere.

Davemart,
yes of course: governments never fail, all engineers always agree, and none of them have vested interest at all.

Therefore, I guess you support all previous renewables state supported energy policies as:
- USA E85 corn ecological and economical disaster
- Brazil's sugarcane ecological and humanitarian disaster
- Sweden imported palm oil, an Indonesian ecological and humanitarian disaster
- Spain's solar bubble around 2008, the state subsidizing a crazy amount of solar at uneconomical prices and causing a nasty price problem for a decade
...and many many more braindead schemes...just because some engineers did put a stamp on a government sponsored report.

And I have checked your marvelous report. It's a riot:

- They never ever mention combined heat and power for hydrogen. Just mixing some testimonial percentage of hydrogen in the gas pipes. In fact, they suggest eliminating existing fossil fuels based combined heat and power systems. Great idea, lol. One the few efficient energy systems in the UK, let it go first.

- They suggest to obtaining the hydrogen from electricity OR natural gas OR biomass.
Yeah, what a great concept. Reform methane into hydrogen and then inject it in methane pipes in small proportion. That will store a ton of energy, fantastic idea.
Or get it from biomass, yeah, why not. Devise a complex system to get hydrogen from biomass and store it. It does not matter that biomass CAN BE perfectly stored without conversion, as is more efficiently used in a biomass burning plant. Biomass is ALREADY energy storage than can complement renewables.

Yeas, I am real impressed. The documents have nice pictures and graphs, that I will admit.

I would like to question their color spectrum. I seems to me that the most "green" source of hydrogen would be high temperature electrolysis using nuclear power as it uses less electric power. And I would suggest that using renewable power would be no different that no different than the yellow grid power electrolysis unless you truly had an excess of renewable power and even then it would still make more sense to use the nuclear power as it is more efficient.

@ sd;
Nuclear power is only acceptable in fusion form and definitely not fission. Germany is making excellent progress in fusion and will deliver final assessment in approx. the 3rd quarter of 2021.

@yoatman::

I welcome alternative number based analysis.

The issue is that there aren't any, just random battery good, hydrogen bad burblings without the least analysis of how to make a low carbon society work without extensive use of hydrogen.

That is why all the real engineering proposals are based on that.

sd:

Hydrogen makes the economics of nuclear a lot better, as although modern reactors can be powered down, when their costs are mostly build not fuel, it makes little sense to do so.

China is looking at HT electrolysis for their new reactor builds.

I have always, or at least for the last half century and more, been a nuclear guy, and in my estimation the use of hydrogen is an enabling technology in conjunction with nuclear, and in no way opposed.

yoatmon,

We have fission power available and there is no fusion power available. For the past 5 or 6 decades, fusion power has been 20 years in the future. Maybe it will only be 10 years in the future for next several decades. There is a good argument that the current fission power plants are the cleanest and safest power that we have available and the newer plants such as Nucor's Small Modular Reactors that will be available shortly are even more safe.

And the nuclear wastes will be served to our children and grandchildren for supper?

Terrapower is working on a traveling wave reactor that will burn nuclear waste, depleted uranium, natural (non-enriched) uranium. It is a self fueling fast breeder which means that it burns the Pu239 as it is created without worrying about refining and possible proliferation of nuclear weapon material. End of nuclear waste problem.

https://en.wikipedia.org/wiki/TerraPower

I think that I would be more worried about our children being injured by falling old wind turbines.

I believe every word that you have written. I trust you more than the pope and Trump will be venerated for centuries as a saint of the 21st century.