Decarbonising End-Use Sectors: Practical Insights on Green Hydrogen, International Renewable Energy Agency, Abu Dhabi
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DECARBONISING END-USE SECTORS: PRACTICAL INSIGHTS ON GREEN HYDROGEN © IRENA 2021 Unless otherwise stated, material in this publication may be freely used, shared, copied, reproduced, printed and/or stored, provided that appropriate acknowledgement is given to IRENA as the source and copyright holder. Material in this publication that is attributed to third parties may be subject to separate terms of use and restrictions, and appropriate permissions from these third parties may need to be secured before any use of such material. 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 ev i ew a n d f e e d b a c k we r e p rov i d e d by D a n i e l Ze l ce r (Ac a c i a S u s t a i n 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 officials, 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. CONTENTS FIGURES AND BOXES ................................................................................................................. 4 ABBREVIATIONS ........................................................................................................................ 5 1. INTRODUCTION ..................................................................................................................... 7 2. GREEN HYDROGEN: AN ENABLER FOR REACHING NET-ZERO ................................................. 9 2.1 End-uses for green hydrogen ....................................................................................................................... 9 2.2 Looking ahead: Market projections for green hydrogen ..........................................................................11 3. ACCELERATING GREEN HYDROGEN UPTAKE ....................................................................... 13 3.1 Government buy-in and support ................................................................................................................. 13 3.2 Moving towards a global green hydrogen market .................................................................................... 15 4. KEY TAKEAWAYS AND RECOMMENDATIONS ........................................................................ 17 5. CASE STUDIES ............................................................................................................................... 19 Queensland Nitrates: Green ammonia production feasibility in Australia...................................................... 20 FH2R: Green hydrogen R&D and production in Japan .......................................................................................23 HYBRIT: Decarbonising steel production in Sweden ........................................................................................ 26 Green H2F Puertollano I: Green ammonia and fertiliser production in Spain ................................................ 29 Power-2-Green Hydrogen: Industrial revitalisation and island decarbonisation in Majorca .........................33 Westküste 100: Green hydrogen and sector coupling in Germany ................................................................. 36 REFERENCES ............................................................................................................................ 41 4 DECARBONISING END-USE SECTORS: FIGURES AND BOXES Figure 1: Potential market opportunities for green hydrogen identified by IRENA Coalition for Action ........... 10 Figure 2: Global demand for renewable electricity to produce green hydrogen by 2050 .......................................11 Figure 3: Policy measures to accelerate green hydrogen production............................................................................13 Figure 4: Hydrogen energy vectors for trade ........................................................................................................................15 Figure 5: Overview of case studies ...........................................................................................................................................19 Box 1: Definition of green hydrogen .......................................................................................................................................... 8 Box 2: Green hydrogen market potential identified by IRENA Coalition for Action ..................................................12 PRACTICAL INSIGHTS ON GREEN HYDROGEN 5 ABBREVIATIONS ARENA Australian Renewable Energy Agency NDC Nationally determined contribution AUD Australian dollar NEDO New Energy and Industrial Technology Development Organization CCS Carbon capture and storage Nm3 Normal cubic metre CO2 Carbon dioxide NOx Nitrogen oxide DRI Direct reduced iron O Oxygen EAF Electric arc furnace 2 PEM Polymer electrolyte membrane EJ Exajoule PPA Power purchase agreement ESG Environmental, social and governance PPP Public-private partnership EU European Union PV Photovoltaic EUR Euro QNP Queensland Nitrates FCH JU Fuel Cells and Hydrogen Joint Undertaking R&D Research and development FH2R Fukushima Hydrogen Energy RED-II Renewable Energy Directive II Research Field (European Union) GDP Gross domestic product SCADA Supervisory control and data acquisition GHG Greenhouse gas SMR Steam methane reforming GW Gigawatt tCO Tonne of carbon dioxide GWh Gigawatt-hour 2 tH2 Tonne of hydrogen H2 Hydrogen TWh Terawatt-hour IDAE Instituto para la Diversificación y Ahorro de la Energía USD United States dollar JPY Japanese yen kW Kilowatt LRC Lined Rock Cavern Mt Million metric tonne MW Megawatt MWp Megawatt-peak PRACTICAL INSIGHTS ON GREEN HYDROGEN 7 INTRODUCTION 01 The ongoing climate crisis, coupled with the costs and the availability of cost-competitive COVID-19 pandemic, has spurred many countries renewable power, countries are increasingly seeing to adopt green recovery measures and policies green hydrogen as a smart long-term investment. that have the potential to drive a lasting shift in the global energy mix. As of December 2020, over Over the last two years, at least 11 countries and 120 countries – responsible for nearly two-thirds the European Union (EU) have launched national of the world’s greenhouse gas (GHG) emissions – hydrogen strategies, with many more countries set have announced commitments to reach net-zero to follow suit. A number of national post-COVID