Draft Roadmap for production and use of hydrogen in Ukraine March 2021 Contents Executive Summary ....................................................................................................................... 6 Introduction ...................................................................................................................................... 8 1. Analysis of best international practices and plans for the use of hydrogen....... 9 2. Analysis of the importance of hydrogen technologies and the potential for their use in Ukraine ...................................................................................................................... 15 2.1. Use of hydrogen in the energy sector .......................................................................... 15 2.2. Use of hydrogen in the transport sector ..................................................................... 19 2.3. Use of hydrogen in the industry sector ....................................................................... 21 2.4. Use of hydrogen in the natural gas industry .............................................................. 24 3. Analysis of hydrogen production methods and their cost-effectiveness .......... 27 3.1. Mass production of hydrogen using steam methane reforming (SMR) .............. 27 3.2. Hydrogen production by electrolysis ........................................................................... 28 3.3. Other technological options for hydrogen production ............................................ 29 3.4. Economic analysis of various hydrogen production methods ............................. 30 4. Analysis of infrastructure for hydrogen storage and transportation .................. 31 5. Analysis of potential to produce renewable hydrogen domestically .................. 34 6. Roadmap for the introduction of hydrogen technologies in Ukraine .................. 38 6.1. Actions and measures at the national level ................................................................ 38 6.2. Actions and measures at the oblast and municipal level ....................................... 69 6.3. Identification of pilot projects......................................................................................... 69 6.4. Implementation of the Roadmap tasks – monitoring and verification ................ 71 7. Conclusions and recommendations ............................................................................. 73 Bibliography ................................................................................................................................... 80 ANNEX 1 - Economic analysis of various hydrogen production methods ................... 82 ANNEX 2 - Hydrogen storage technologies ........................................................................... 84 ANNEX 3 - Innovative solutions ................................................................................................ 87 ANNEX 4 - Ukrainian norms and regulations applicable to hydrogen technologies.. 88 2 Acknowledgments Stanislav Dubko is the main author of this report. Oleg Dzioubinski, Branko Milicevic, and Harikrishnan Tulsidas of the UNECE Sustainable Energy Division, Léa Bigot and Jürgen Keinhorst of the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety of Germany contributed to the report through their review and comments. Valuable contributions to the report were provided by respondents to project surveys and interview participants, in particular: Yaroslav Demchenkov and Yulia Rybak, Ministry of Energy; Kostiantyn Gura, SAEE; Oleksandr Repkin and Oksana Tarasyuk, Ukrainian Hydrogen Council; and Oleksandra Gumeniuk, EUEA. Participants of the Capacity-building workshop on development of hydrogen infrastructure held in Kyiv and online on 25 February 2021 also contributed to the report. Comments received during and after the workshop were taken into account to the extent possible. Cut-off date of this report is 9 March 2021. 3 List of Acronyms AEL Alkaline Electrolyzers AEM Alkaline Exchange Membrane AMC Anti-Monopoly Committee atm Standard Atmosphere (unit of pressure) ATR Autothermal Reforming CAES Compressed Air Energy Storage CAPEX Capital Expenditures CCS Carbon Capture and Storage CO2 Carbon Dioxide CoM Cabinet of Ministers ESU Energy Strategy of Ukraine EU European Union FCEV Fuel Cell Electric Vehicle FCH Fuel Cell and Hydrogen FCH JU Fuel Cell and Hydrogen Joint Undertaking GDP Gross Domestic Product GHG Greenhouse Gases GTS Gas Transportation System GW Gigawatt IEA International Energy Agency IPCEI Important Projects of Common European Interest IPHE International Partnership for Hydrogen and Fuel Cells in the Economy IRENA International Renewable Energy Agency KPIs Key Performance Indicators LOHC Liquid Organic Hydrogen Carrier MCTD Ministry for Communities and Territories Development MENR Ministry of Ecology and Natural Resources MoE Ministry of Energy MoF Ministry of Finance NASU National Academy of Science (of Ukraine) NEEAP National Energy Efficiency Action Plan NEURC National Commission for State regulation of Energy and Public Utilities NGO Non-Government Organizations NO Nitrogen Oxide Nm3 Normal cubic meter NPP Nuclear Power Plant NREAP National Renewable Energy Action Plan OPEX Operational Expenditures 4 PEC Photoelectrochemical Cell PEM Proton Exchange Membrane POX Partial Oxidation PPE Programmation pluriannuelle de l’énergie (Multi-Year Energy Plan) PSPS Pumped Storage Power Stations R&D Research and development RES Renewable Energy Sources RPTC Regular Programme for Technical Cooperation SAEE State Agency on Energy Efficiency and Energy Saving SMR Steam Methane Reforming SMSS Semiconductor Magnetic Storage Systems SOEC Solid Oxide Electrolyzer Cell SOFC Solid Oxide Fuel Cell SPP Solar Power Plant toe Tonnes oil equivalent TPES Total Primary Energy Supply TPP Thermal Power Plant TRL Technology Research Level TWh Terawatt hour UPS United Power System (of Ukraine) UNECE United Nations Economic Commission for Europe USF Underground Storage Facilities WPP Wind Power Plant 5 Executive Summary Energy transition is an ambitious strategic choice of Ukraine, which will determine the main trends and directions of development of the national economy over the next 30 years. In order to realize this transition Ukrainian government will face many challenges: - How to reduce the dependence on fossil fuels? - How to decarbonize industry which is highly dependent on fossil fuels? - How to decarbonize the transport sector? - How to develop mobility on the basis of renewable energy? - How to improve energy efficiency and energy storage? - How to integrate flexibility options in order to match the generation of renewable electricity with demand? All these questions and many more could be addressed with the help of many new technologies which will be needed to replace the current reliance on conventional energy. One of the most promising modern technologies to deliver the scaled up renewable energy to the economy are hydrogen technologies due to unique hydrogen chemical properties as the carrier of energy. Combined with comprehensive energy efficiency measures and development of renewable energy sources, large scale production and use of hydrogen in Ukraine will allow to decarbonize its energy sector, as well as transport and many other industries. This will contribute to strengthening intersectoral ties and forming sustainable clusters in the economy, intensifying innovation and investment activities, creating new job opportunities, increasing the competitiveness of Ukrainian enterprises, promoting Ukraine in the world rankings to significantly improve the investment climate. Implementation of recommendations outlined in this Report is meant to significantly improve energy efficiency of the economy with the aim to approximate the average level of the EU countries in terms of energy capacity of GDP, as well as to achieve the increase of the share of RES in the energy mix accompanied by the reduction of greenhouse gas emissions, aligning them to the average level of EU countries in terms of GDP carbon intensity. Given the size and anticipated growth of the existing hydrogen market, the development of renewable hydrogen projects could present a significant investment opportunity in Ukraine. Not only does Ukraine enjoy some of the most abundant renewable resources in Europe, but it also is the country that is most in need of new and clean forms of energy to support economic development. Ensuring that the alternative fuels create zero emissions, are affordable, and are convenient to use is essential to avoid locking Ukraine (and ultimately global CO2 emissions) into a trajectory that leads to significant climatic warming by the middle of the century. But hydrogen applications do not come without challenges. Hydrogen is a gas difficult to contain, with properties that require careful consideration to ensure safe usage. Although technologies and procedures do exist to minimize leaks and to ensure that, where necessary, hydrogen is released in a controlled manner, they are not understood well outside the petrochemical industry. Indeed, where there have been safety incidents involving hydrogen, the cause has often been a fault in the assembly of the units, demonstrating the importance of having access to experienced installers and engineers. Access to such skills is also important for the ongoing maintenance of fuel cell systems, notably those operating at higher temperatures for which suppliers are advising some