Policy & Socio-Economics

On this episode of Everything About Hydrogen we are speaking with Nashwa Al Rawahy Director of HMR Environmental Consultants based in Muscat Oman with regional offices in the United Arab Emirates.

We are excited to have an expert like Nashwa join us to discuss environmental and social impact studies their value to the communities and projects and the importance of building long term In Country Value (ICV).

The podcast can be found on their website.

In order to achieve the EU’s target of 55% carbon reduction by 2030 hydrogen will have to make a key contribution to the energy mix. With many applications in industrial heat mobility power and chemical refineries hydrogen can be used to decarbonise where electrification is not possible. Equinor is a broad energy company with 21000 employees developing oil gas wind and solar energy in more than 30 countries worldwide. Equinor have been at the forefront of promoting hydrogen projects in Europe and developing low-carbon hydrogen solutions. In this episode Johan Leuraers Chief Consultant - Policy and Regulatory Affairs at Equinor and John Williams Head of Hydrogen Expertise Cluster at AFRY Management Consulting join us to discuss the main barriers to the uptake of hydrogen and the next steps to kick-start the hydrogen economy.

The podcast can be found on their website.

Accommodating renewables on the electricity grid may hinder development opportunities for offshore wind farms (OWFs) as they begin to experience significant curtailment or constraint. However there is potential to combine investment in OWFs with Power-to-Gas (PtG) converting electricity to hydrogen via electrolysis for an alternative/complementary revenue. Using historic wind speed and simulated system marginal costs data this work models the electricity generated and potential revenues of a 504 MW OWF. Three configurations are analysed; (1) all electricity is sold to the grid (2) all electricity is converted to hydrogen and sold and (3) a hybrid system where power is converted to hydrogen when curtailment occurs and/or when the system marginal cost is low with the effect of curtailment analysed in each scenario. These represent the status quo a potential future configuration and an innovative business model respectively. The willingness of an investor to build PtG are determined by changes to the net present value (NPV) of a project. Results suggest that configuration (1) is most profitable and that curtailment mitigation alone is not sufficient to secure investment in PtG. By acting as an artificial floor in the electricity price a hybrid configuration (3) is promising and increases NPV for all hydrogen values greater than €4.2/kgH2. Hybrid system attractiveness increases with curtailment only if the hydrogen value is significantly above the levelised cost of €3.77/kgH2. In order for an investor to choose to pursue configuration (2) the offshore wind farm would have to anticipate 8.5% curtailment and be able to receive €4.5/kgH2 or 25% curtailment and receive €4/kgH2. The capital costs and discount rates are the most sensitive parameters and ambitious combinations of technology improvements could produce a levelised cost of €3/kgH2.

Hydrogen is a versatile energy carrier which can be produced from variety of feedstocks stored and transported in various forms for multi-functional end-uses in transportation energy and manufacturing sectors. Several regional national and supra-national climate policy frameworks emphasize the need value and importance of Fuel cell and Hydrogen (FCH) technologies for deep and sector-wide decarbonization. Despite these multi-faceted advantages familiar and proven FCH technologies such as alkaline electrolysis and proton-exchange membrane fuel cell (PEMFC) often face economic technical and societal barriers to mass-market adoption. There is no single unified standardized and globally harmonized normative definition of costs. Nevertheless the discussion and debates surrounding plausible candidates and/or constituents integral for assessing the economics and value proposition of status-quo as well as developmental FCH technologies are steadily increasing—Life Cycle Costing (LCC) being one of them if not the most important outcome of such exercises.<br/>To that end this review article seeks to improve our collective understanding of LCC of FCH technologies by scrutinizing close to a few hundred publications drawn from representative databases—SCOPUS and Web of Science encompassing several tens of technologies for production and select transportation storage and end-user utilization cases. This comprehensive review forms part of and serves as the basis for the Clean Hydrogen Partnership funded SH2E project whose ultimate goal is the methodical development a formal set of principles and guardrails for evaluating the economic environmental and social impacts of FCH technologies. Additionally the SH2E projects will also facilitate the proper comparison of different FCH technologies whilst reconciling range of technologies methodologies modelling assumptions and parameterization found in existing literature.

Countries around the world are prioritising net zero emissions to meet their Paris Agreement goals. The demand for social impact assessment (SIA) is likely to grow as this transition will require investments in decarbonisation projects with speed and at scale. There will be winners and losers of these projects because not everyone benefits the same; and hence trade-offs are inevitable. SIAs therefore should focus on understanding how the risks and benefits will be distributed among and within stakeholders and sectors and enable the identification of trade-offs that are just and fair. In this study we used a hypothetical case of large-scale hydrogen production in regional Australia and engaged with multi-disciplinary experts to identify justice issues in transitioning to such an industry. Using Rawlsian theory of justice as fairness we identified several tensions between different groups (national regional local inter and intra-communities) and sectors (environmental and economic) concerning the establishment of a hydrogen industry. These stakeholders and sectors will be disproportionately affected by this establishment. We argue that Rawlsian principles of justice would enable the practice of SIA to identify justice trade-offs. Further we conceptualise that a systems approach will be critical to facilitate a wider participation and an agile process for achieving just trade-offs in SIA.

Australia has clear aspirations to become a major global exporter of hydrogen as a replacement for fossil fuels and as part of the drive to reduce CO2 emissions as set out in the National Hydrogen Strategy released in 2019 jointly by the federal and state governments. In 2021 the Australian Energy Market Operator specified a grid forecast scenario for the first time entitled “hydrogen superpower”. Not only does Australia hope to capitalise on the emerging demand for zero-carbon hydrogen in places like Japan and South Korea by establishing a new export industry but it also needs to mitigate the built-in carbon risk of its export revenue from coal and LNG as major customers such as Japan and South Korea move to decarbonise their energy systems. This places hydrogen at the nexus of energy climate change mitigation and economic growth with implications for energy security. Much of the published literature on this topic concentrates on the details of what being a major hydrogen exporter will look like and what steps will need to be taken to achieve it. However there appears to be a gap in the study of the implications for Australia’s domestic energy system in terms of energy security and export economic vulnerability. The objective of this paper is to develop a conceptual framework for the implications of becoming a major hydrogen exporter on Australia’s energy system. Various green hydrogen export scenarios for Australia were compared and the most recent and comprehensive was selected as the basis for further examination for domestic energy system impacts. In this scenario 248.5 GW of new renewable electricity generation capacity was estimated to be required by 2050 to produce the additional 867 TWh required for an electrolyser output of 2088 PJ of green hydrogen for export which will comprise 55.9% of Australia’s total electricity demand at that time. The characteristics of comparative export-oriented resources and their interactions with the domestic economy and energy system are then examined through the lens of the resource curse hypothesis and the LNG and aluminium industries. These existing resource export frameworks are reviewed for applicability of specific factors to export-oriented green hydrogen production with applicable factors then compiled into a novel conceptual framework for exporter domestic implications from large-scale exports of green hydrogen. The green hydrogen export superpower (2050) scenario is then quantitatively assessed using the established indicators for energy exporter vulnerability and domestic energy security comparing it to Australia’s 2019 energy exports profile. This assessment finds that in almost all factors exporter vulnerability is reduced and domestic energy security is enhanced by the transition from fossil fuel exports to green hydrogen with the exception of an increase in exposure of the domestic energy system to international market forces.

This study aims to help the Department for Business Energy and Industrial Strategy (BEIS) determine whether the government should intervene to enable or require hydrogen-ready industrial boiler equipment. It will do this based on information from existing literature along with qualitative and quantitative information from stakeholder engagement. The study draws on evidence gathered through BEIS’ Call for Evidence (CfE) on hydrogen-ready industrial boilers. The assessment will advance the overall understanding of hydrogen-ready industrial boilers based on four outputs: definitions of hydrogen-readiness comparisons of the cost and resource requirement to install and convert hydrogen-ready industrial boiler equipment supply chain capacity for conversion to hydrogen and estimates of the UK industrial boiler population.

The topic of energy islands is currently a focal point in the push for the energy transition. An ambitious project in the North Sea aims to build an offshore wind-powered electrolyser for green hydrogen production. Power-to-X (PtX) is a process of converting renewable electricity into hydrogen-based energy carriers such as natural gas liquid fuels and chemicals. PtH2 represents a subset of PtX wherein hydrogen is the resultant green energy from the conversion process. Many uncertainties surround PtH2 plants affecting the economic success of the investment and making the price of hydrogen and the levelized cost of hydrogen (LCOH) of this technology uncompetitive. Several studies have analysed PtH2 layouts to identify the hydrogen price without considering how component capacities and external inputs affect the breakeven price. Unlike previous works this paper investigates component capacity dependencies under variables such as wind and hydrogen demand shape for dedicated/non-dedicated system layouts. To this end the techno-economic analysis finds the breakeven price optimising the components to reach the lowest selling price. Results show that the hydrogen price can reach 2.2 €/kg for a non-dedicated system for certain combinations of maximum demand and electrolyser capacity. Furthermore the LCOH analysis revealed that the offshore wind electrolyser system is currently uncompetitive with hydrogen production from carbon-based technologies but is competitive with renewable technologies. The sensitivity analysis reveals the green electricity price in the non-dedicated case for which a dedicated system has a lower optimum hydrogen price. The price limit for the dedicated case is 116 €/MWh.

Hydrogen has been at the centre of attention since the EU kicked-off its decarbonization agenda at full speed. Many consider it a silver bullet for the deep decarbonization of technically challenging sectors and industries but it is also an attractive option for the gas industry to retain and future-proof its well-developed infrastructure networks. The modelling methodology presented in this report systematically tests the feasibility and cost of different pipeline transportation methods – blending repurposing and dedicated hydrogen pipelines - under different decarbonization pathways and concludes that blending is not a viable solution and pipeline repurposing can lead to excessive investment outlays in the range of EUR 19–25 bn over the modelled period (2020–2050) for the EU-27.

The green hydrogen industry highly efficient and safe is endowed with flexible production and low carbon emissions. It is conducive to building a low-carbon efficient and clean energy structure optimizing the energy industry system and promoting the strategic transformation of energy development and enhancing energy security. In order to achieve carbon emission peaking by 2030 and neutrality by 2060 (dual carbon goals) China is vigorously promoting the green hydrogen industry. Based on an analysis of the green hydrogen industry policies of the U.S. the EU and Japan this paper explores supporting policies issued by Chinese central and local authorities and examines the inherent advantages of China’s green hydrogen industry. After investigating and analyzing the basis for the development of the green hydrogen industry in China we conclude that China has enormous potential including abundant renewable energy resources as well as commercialization experience with renewable energy robust infrastructure and technological innovation capacity demand for large-scale applications of green hydrogen in traditional industries etc. Despite this China’s green hydrogen industry is still in its early stage and has encountered bottlenecks in its development including a lack of clarity on the strategic role and position of the green hydrogen industry low competitiveness of green hydrogen production heavy reliance on imports of PEMs perfluorosulfonic acid resins (PFSR) and other core components the development dilemma of the industry chain lack of installed capacity for green hydrogen production and complicated administrative permission etc. This article therefore proposes that an appropriate development road-map and integrated administration supervision systems including safety supervision will systematically promote the green hydrogen industry. Enhancing the core technology and equipment of green hydrogen and improving the green hydrogen industry chain will be an adequate way to reduce dependence on foreign technologies lowering the price of green hydrogen products through the scale effect and thus expanding the scope of application of green hydrogen. Financial support mechanisms such as providing tax breaks and project subsidies will encourage enterprises to carry out innovative technological research on and invest in the green hydrogen industry.