IRENA report on Hydrogen from Renewable Power

A new report ‘Hydrogen from renewable power: Technology outlook for the energy transition’ has been released by the International Renewable Energy Agency (IRENA). This report shows Hydrogen can help meet a range of energy needs that would be difficult to address through direct electrification, making hydrogen the missing link in the global transition to a low carbon energy system.

As the world strives to cut carbon emissions, electric power from renewables has emerged as a vital energy source. Yet transport and industry will still require combustible fuels for many purposes. Such needs could be met with hydrogen, which itself can be produced using renewable power.

Hydrogen provides high-grade heat, helping to meet a range of energy needs that would be difficult to address through direct electrification. This could make hydrogen the missing link in the transformation of the global energy system. Key sectors for renewable-based hydrogen uptake include: 

·         Industry, where it could replace fossil-based feedstocks, including natural gas, in high-emission applications.

·         Buildings and power, where it could be mixed with natural gas or combined with industrial carbon dioxide (CO2) emissions to produce syngas.

·         Transport, where it can provide low-carbon mobility through fuel-cell electric vehicles. 

Electrolysers – which split hydrogen and oxygen – can make power systems more flexible, helping to integrate high shares of variable renewables. Power consumption for electrolysis be adjusted to follow actual solar and wind output, while producing the hydrogen needed for transport, industry or injection into the gas grid.  

In the long run, hydrogen could become a key element in 100% renewable energy systems. With technologies maturing, actual scale-up should yield major cost reductions. The right policy and regulatory framework, however, remains crucial to stimulate private investment in in hydrogen production in the first place.

Hydrogen could be the missing link in the energy transition: renewable electricity can be used to produce hydrogen, which can in turn provide renewable fuels to sectors otherwise difficult to decarbonise through direct electrification. Key findings include:

•        Hydrogen produced from renewable power could facilitate the deployment and integration of high shares of variable renewable energy (VRE) into the energy system.

•        Hydrogen from renewable power could create new downstream markets for renewable power. It has the potential to reduce renewable electricity generators’ exposure to power price volatility risk.

•        Key hydrogen technologies are reaching technology maturity. Scale-up is necessary to pursue the necessary cost reductions, building on decades of experience with an array of established global players and mature technologies and processes.

•        Proton exchange membrane (PEM) electrolysers and fuel cells are approaching technical maturity and economies of scale, with commercial deployment starting in several regions.

•        The economics remain challenging, with significant cost reductions to be achieved for hydrogen to reach competitiveness. Production of hydrogen from renewable power is expected to take place as both grid-connected, on-site production and off-grid, located where best renewable resources are.

•        Initial efforts could focus on large-scale applications, so as to rapidly generate economies of scale with minimal infrastructure requirements, and on sectors where hydrogen from renewables stands out as one of the few technically-feasible options to meet climate targets and comply with local emissions regulations.

This report finds that in general hydrogen from renewable electricity is most likely to achieve cost-effectiveness through high electrolyser utilisation rates combined with low-cost renewable electricity. Yet outcomes should be assessed carefully for each possible production site. Large scale, off-grid hydrogen projects directly connected to solar and wind farms in high resource locations may provide low-cost, 100 % renewable hydrogen. However they will have lower electrolyser utilisation rate due to the nature of solar and wind resources, which would increase hydrogen cost. Meanwhile, close-to-demand, grid connected production facilities can maximise the utilisation rate of the electrolyser and minimise logistic costs, but might not have access to such low electricity prices, and from 100 % renewable electricity supply.