The demand pull for hydrogen is present in Europe but will require stronger regulation and policy support if the sector is to develop more rapidly, according to participants speaking at a PE Live webcast organised in association with professional services firm Deloitte today.

Recently strengthened EU decarbonisation targets of reaching net-zero emissions by 2050 will trigger widespread electrification and the development of the hydrogen sector, according to Tarek Helmi, a partner in Deloitte’s strategy and operations practice.

6GW – Number of electrolysers EU wants by 2024

“We are doing some analysis on Germany, the Netherlands and Belgium around how their systems could look by 2050 under some assumptions, and electrification gets to 40-50 pc of the overall system. For the rest, you really need green molecules, with hydrogen being a big part of these green molecules,” he says.

The EU has an initial plan to install at least 6GW of green hydrogen electrolysers producing up to 1mn t/yr of green hydrogen. In its strategic vision for a climate-neutral EU published in November 2018, the share of hydrogen in Europe’s energy mix is projected to grow from less than 2pc currently to 13-14pc by 2050.

This production will need to form part of an increasingly complex energy system, meaning policy will have to be carefully coordinated to stimulate both supply and demand, according to Andrea Ramirez Ramirez, professor of low-carbon systems and technologies at the Delft University of Technology.

“As much as we would like to have a technology push, the reality is that we need the institutional and social conditions for that technology to be deployed,” she says. “That comes from regulation, legislation, infrastructure and capacity-building.”

Hydrogen could have a number of roles in a decarbonised energy system—as a fuel to replace coal in steelmaking and other carbon-intensive industrial processes, as a road transport fuel for larger vehicles and as a storage solution to resolve intermittency issues in electricity grids with high amounts of renewable generation.

Close cooperation

Developing a hydrogen system to fulfil all of these needs, as well as the necessary transport and storage infrastructure to underpin it, will require careful cooperation between a number of previously uncoupled sectors, according to Helmie Botter, VP for hydrogen business development at energy network operator Gasunie.

“We need the market commitment of industrial players who will take FIDs on demand and supply, we need the government for financial support—and also on a policy level to stimulate production and demand of hydrogen,” she says. “It will always be the sharing of risk between government, infrastructure companies and market participants.”

Policy incentives that stimulated the growth of the European renewables sector show that government support is vital in accelerating key industries. But things are likely to be different later on in the transition, according to Helmi. “Regulation will be important to enable the transition—this has been done with renewables,” he says.

“Having said that in this transition there will also be a bigger role to play for other players…we will see companies moving faster than regulation in certain places.”

The key to getting this right for policymakers will be the balance between macro- and micro- level measures, according to Ramirez Ramirez.

“On the one hand you want the target, on the other hand it’s how do you keep things flexible,” she says.

“We have learned there is no silver bullet, but also you don’t want one hundred and ten options because then where do you focus? The key building blocks will be electrolysers, and—if you want to use hydrogen for industry— capturing CO₂ for storage will be another.”

The PE Live webcast, Hydrogen development to 2030, is available on demand here. 

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Author: Tom Young