Articles
Scaling up clean H2 to meet demand
Executive Viewpoint
H. D. HERMES, VP Clean Hydrogen, Worley
The global hydrogen (H2) market is forecast to grow 1,000-fold by 2040, with demand for clean H2 projected to reach 500 metric MMtpy (million tons per year) between now and 2050. This is represented by the European Union (EU) pinpointing H2 as central to decarbonizing European industry, transport, power and buildings.
Why such demand for one product? Clean H2 has the potential to decarbonize chemical, cement, iron and steel production and provide combined heat and power from a single source. H2 will enable surplus energy from other sources to be stored and circulated across sectors and regions, creating a circular economy of renewable energy where excess energy is continually recycled into power.
This is why H2 is critical to the EU strategy of energy system integration, as it can produce heat and power from multiple sources. It is also a prime electrofuel, a renewably-sourced drop-in replacement fuel to decarbonize sectors like shipping and aviation. Crucially, H2 can provide renewable fuel for sectors from freight transport and shipping, which are unsuitable for direct electrification.
Recent international climate agreements have accelerated the demand for clean H2. However, a gap between supply and demand is growing, with the world needing 500 metric MMtpy of green and blue H2 by 2050. In a microcosm of the global shortage, current total H2 capacity would need to be scaled up by a factor of 100 to power only the commercial truck fleet in a country like Germany alone. This is driving increasing industry demand for a more competitive levelized cost of H2 to encourage the necessary investment in extra capacity. So how can the cost of H2 be reduced to make it more competitive?
Cross-sector energy convergence. Ramping up clean H2 production will require a mix of energy sources underpinned by cross-sector collaboration and integration. This is because clean H2 will require a blend of power sources—such as solar and wind energy—and a parallel convergence of previously separate sectors and specialisms from electrolyzers and petroleum to offshore wind and gas. A fragmented, siloed H2 value chain could function as a significant drag on development speed at a crucial time when we need to scale up production.
H2-based energy convergence is already taking shape in combined heat-and-power plants, offshore wind-to-H2 projects and H2-fueled household heating and transport. We similarly see cross-sector consortiums of chemicals, heating, electricity and green energy producers planning for eMethanol and pioneering partnerships between fossil fuel and renewable energy firms to produce green H2. Firms spanning industries as diverse as renewables, water, power and fertilizer have formed a Green Hydrogen Catapult to reduce development costs through combined economies of scale. The European Commission’s Hydrogen Strategy similarly outlined plans to integrate the EU’s entire energy system across sectors and regions.
Breaking down sector silos. However, this involves the challenge of breaking down national and sector silos and uniting industries that have never worked together, as identified in, “From Ambition to Reality,” a whitepaper written by the author’s company’s in collaboration with Princeton University (U.S.). The widely varying standards, cultures, tools and technologies across relevant industries—from electrolyzers to petrochemicals—could create disjointed development. For example, conflicting business models, design approaches and engineering methods could be seen across industrial clusters or partnerships. This means incompatible tools and technologies could hamper cross-sector collaboration and data-sharing. Similarly, a culture clash could occur between project partners with contrasting corporate cultures, such as chemicals or wind.
H2 standards. Demand is growing for global standards to ensure consistencies with technologies, processes, safety and sustainability across the H2 value chain. Cross-sector energy system integration requires cross-sector oversight and harmonized standards or regulations. Streamlined and aligned EU H2 legislation under the umbrella of the Hydrogen Act would ensure consistent safe and sustainable production across sectors and countries, providing a benchmark for best practices across all industries involved in clean H2 and harmonizing diverse efforts around common objectives.
Connecting a diverse ecosystem. Integration also requires project management specialists spanning every relevant sector to function as an ecosystem hub connecting all H2 tools, technologies, sectors and suppliers. Neutral conveners would help ensure the seamless integration of diverse project partners, policies, people and processes. This would enable the industry to avail of “optioneering,” drawing on the full array of tools to find the optimal mix of best-in-class solutions for everything from cost to carbon efficiency.
For example, the author’s company provides asset integration services, including selecting the best blend of technologies to develop Shell’s pioneering Holland Hydrogen I green H2 facility. The project will draw on the company’s experience across multiple relevant sectors—from offshore wind to electrolysis—to coordinate collaboration between Shell and an offshore wind farm to produce 50,000 kg/d–60,000 kg/d of H2 in the first phase.
This demonstrates how neutral conveners straddling multiple sectors can drive the holistic, “whole-system” asset integration and cohesive collaboration necessary for H2. It offers a microcosm of how the wider energy sector could be managed as an interconnected “system of systems” feeding clean H2.
Importantly, this project shows how independent third-party organizations can provide neutral consultancy to help industrial clusters or consortiums select the optimal mix of products and processes from all sectors for any H2 application. Vendor-neutral “open” design standards for H2 could similarly create a shared ecosystem of H2 technologies so all projects can draw on a best-in-class blend of solutions.
The H2 revolution. The clean H2 revolution will require an unprecedented effort uniting industry, academia and government and bringing together a massive value chain spanning multiple industries and sectors. This energy system integration has the capacity to simultaneously decarbonize various industries, from transport to heating, and store and spread clean power and heat across the global economy. Conversely, a fragmented and siloed H2 value chain will mean new generating capacity cannot keep pace with demand for decarbonization.
Speeding up development will require the harmonization of diverse practices and technologies through common standards, regulations, project management models and cross-sector specialists bridging multiple industries. Industrial clusters, catapults, consortiums and public-private partnerships should be created to unite industry, investors, governments and regulators to drive collaborative research and development.
Finally, overarching frameworks for standardization and coordination of H2 production, storage and distribution are needed. Ultimately, the aim is to manage the energy sector as a single interoperable ecosystem where energy sources, expertise and assets can circulate freely across sectors.
About the author
HANS DIETER HERMES is the Vice President, Hydrogen, for Worley, and has an extensive record in international business development in renewable energy (solar, wind and H2) technologies and economics, including experience in energy projects in more than 20 countries throughout Europe, the Americas, Africa and Asia. Dr. Hermes has served as Steering Committee Chairman of the 25-GW Green Hydrogen Project GEO in Oman; and as an Advisory Board Member of the MENA-Fuels Project for the Federal Ministry for Economic Affairs and Climate Action, Germany, analyzing the Middle East and North Africa for the supply of green H2-based synthetic fuels up to the year 2050. He is also the co-author of the September 2020 publication, “How to make Green Hydrogen economic?” (Hermes, Witte, et. al.). Dr. Hermes previously served in several senior roles at Vattenfall, including: Project Governance Officer for renewable energy, steering investment decisions and project developments and holding responsibility for the policy and decision framework for all renewable projects (wind, solar, hydrogen); Head of Business Development, Biomass; and Head of the “Vattenfall Carbon Fund,” financing renewable energy projects for emissions reduction in Asia, East Europe and Latin America. He also served as Head of Energy Economics for Tractebel Engineering (Lahmeyer International GmbH), where he was responsible for the management and financial turnaround of two energy and water companies, financed by World Bank. Dr. Hermes earned an MSc degree in mechanical engineering and a PhD in energy economics.
Related Articles
Connect with H2Tech
