Policy & Socio-Economics

Purpose: The standards module of the FCHO (https://www.fchobservatory.eu/observatory/Policyand-RCS/Standards) presents a large number of standards relevant for the deployment of hydrogen and fuel cells. The standards are categorized per application enhancing ease of access and findability. The development of sector-relevant standards facilitate and enhance economies of scale interoperability comparability safety and many other issues. Scope: This report presents the developments in European and international standards for the year 2021 and the start of 2022. Standards from the following standards developing organizations are included: CEN CENELEC ISO IEC OIML. Key Findings: The development of sector relevant standards on an international level continued to grow in 2022; on a European level many standards are still in the process of being drafted. In 2021 & 2022 11 new standards have been published on the subject of fuel cell technologies and safety and measurement protocols of hydrogen technologies. The recently established committee CEN-CLC JTC 6 (Hydrogen in energy systems) has not published standards yet but is working on drafting standards on for example Guarantees of Origin. In the upcoming years multiple standards will be replaced such as the ISO 12619 1-12 set of standards affecting 40% of all collected standards. Previous Reports: The first report was published in September 2020 followed up by a second report in 2021. This report is the 3 rd Annual report.

The overuse of fossil fuels has caused a serious energy crisis and environmental pollution. Due to these challenges the search for alternative energy sources that can replace fossil fuels is necessary. Hydrogen is a widely acknowledged future energy carrier because of its nonpolluting properties and high energy density. To realize a hydrogen economy in the future it is essential to construct a comprehensive hydrogen supply chain that can make hydrogen a key energy carrier. This paper reviews the various technologies involved in the hydrogen supply chain encompassing hydrogen production storage transportation and utilization technologies. Then the challenges of constructing a hydrogen supply chain are discussed from techno-economic social and policy perspectives and prospects for the future development of a hydrogen supply chain are presented in light of these challenges.

The information in this report covers the period January 2021 – December 2021. The technology and market module of the FCHO presents a range of statistical data as an indicator of the health of the sector and the progress in market development over time. This includes statistical information on the size of the global fuel cell market including number and capacity of fuel cell systems shipped in a calendar year. For this edition data to the end of 2021 is presented where possible alongside analysis of key sector developments. Fuel cell system shipments for each calendar year are presented both as numbers of units and total system megawatts. The data are further divided and subdivided by:  Application: Total system shipments are divided into Transport Stationary and Portable applications  Fuel cell type: Numbers are provided for each of the different fuel cell chemistry types  Region of integration: Region where the final manufacturer – usually the system integrator – integrates the fuel cell into the final product  Region of deployment: Region where the final product was shipped to for deployment The data is sourced directly from industry players as well as other relevant sources including press releases associations and other industry bodies. This year the report also includes data relating to electrolysers commissioned within Europe. Information is presented on the number of hydrogen refuelling stations (HRS) deployed since 2014 with detailed information on HRS in operation including pressure capacity etc. In parallel the observatory provides data on the registered fuel cell electric vehicles (FCEVs) on European roads providing an indication of the speed of adoption of hydrogen in the transport sector. This annual report is an enrichment analysis of the data available on the FCHO providing global context and insights on trends observed year-over-year. Electrolyser systems commissioned for each calendar year within Europe are presented as both the number of units and the total system power rating in megawatts (MW). The data is further divided by:  Number of Electrolyser Units Commissioned: The number of units brought online each year in Europe from 2000 until 2021.  Application: Total systems commissioned are divided in Transport Fuel Industry Feedstock Steel Making Industrial Heat Power Generation Export Grid Injection and Sector Coupling.  Electrolyser Type: Number for each of the different electrolyser types commissioned are provided.  Region of deployment: Region where the electrolyser was commissioned. All sections in the Technology & Market module are updated following an annual data collection and validation cycle and the annual report is published the following Spring.

The aim of this study is to investigate the long-term planning of the Italian power sector from 2021 to 2050. The key role of photovoltaic and wind technologies in combination with power-to-power systems based on hydrogen and batteries is investigated. An updated version of the OSeMOSYS tool is used which employs a clustering method for the representation of time-varying input data. First the potential of variable renewable energy sources (VRES) is assessed. A sensitivity analysis is also performed on the temporal resolution of the model to determine an adequate trade-off between the computation time and the accuracy of the results. Then a technoeconomic optimization scenario is carried out resulting in a total net present cost of about 233.7 B€. A high penetration of VRES technologies is foreseen by 2050 with a total VRES installed capacity of 272.9 GW (mainly photovoltaic and onshore wind). Batteries are found to be the preferable energy storage solution in the first part of the energy transition while the hydrogen storage starts to be convenient from about the year 2040. Indeed the role of hydrogen storage becomes fundamental as the VRES penetration increases thanks to its cost-effective long-term storage capability. By 2050 74.6 % of electricity generation will be based on VRES which will also enable a significant reduction in CO2 emissions of about 87 %.

With decreasing costs of the clean technologies the balanced scales of the Sustainable Development Goal 7 targets e.g. energy equity (EE) energy security (ES) and environmental sustainability (EVS) are quickly changing. This fundamental balancing process is a key requirement for a net-zero future. Accordingly this research analyzes the regime-switching effect of Hydrogen economy as the green transition sharing economy and economic complexity as the complexity-based and geopolitical risks and energy prices as the geostrategy policies on the Goal 7 targets. To this end a Markov-switching panel vector autoregressive method with regime-heteroskedasticity is applied to study advancing the Goal 7 in the world's twenty-five large energy consumers during 2004–2020. Concerning the parameters and statistics of the model the results refer to the existence of two regimes associated with the Goal 7 corners called “upward and downward” regimes for EE and “slightly upward and sharply upward” regimes for ES and EVS. It is revealed that the vulnerability of EE and ES targets is considerably reduced when the regime switches to the dominant regime that is “downward” and “slightly upward” regimes respectively and that of the EVS target remains unaffected. Through the impulse-response analysis the findings denote that the first hypothesis of the efficiency of the Hydrogen economy in promoting the Goal 7 targets is insignificant. However the significant short-term and dynamic shock effects of the complexity-based and geostrategy policies on the Hydrogen economy are detected which will be a feasible alternative assessment in advancing the Goal 7. Further the complexity-based policies support the Goal 7 targets under different regimes especially in the short- and medium-term. Hence the second hypothesis regarding the effectiveness of the complexity-based policies in promoting Goal 7 targets is confirmed. The third hypothesis concerning the complexity of the impact of geostrategy policies on the Goal 7 targets is verified. Particularly the switching process towards the Goal 7 may not necessarily be restricted by the geopolitical risks. Moreover EE is supported through energy prices in the short-term under both regimes while they are non-conductive to promote ES and EVS through time. Accordingly the decision-makers should acknowledge adopting a regime-switching path forward for ensuring the time-varying balanced growth of the Goal 7 targets as the impact of the suggested policy instruments is asymmetric.

Driven by global targets to reduce greenhouse gas emissions energy systems are expected to undergo fundamental changes. In light of carbon neutrality policies China is expected to significantly increase the proportion of hydrogen and electricity in its energy system in the future. Nevertheless the future trajectory remains shrouded in uncertainty. To explore the potential ramifications of varying growth scenarios pertaining to hydrogen and electricity on the energy landscape this study employs a meticulously designed bottom-up model. Through comprehensive scenario calculations the research aims to unravel the implications of such expansions and provide a nuanced analysis of their effects on the energy system. Results show that with an increase in electrification rates cumulative carbon dioxide emissions over a certain planning horizon could be reduced at the price of increased unit reduction costs. By increasing the share of end-use electricity and hydrogen from 71% to 80% in 2060 the unit carbon reduction cost will rise by 17%. Increasing shares of hydrogen could shorten the carbon emission peak time by approximately five years but it also brings an increase in peak shaving demand.

Is there a place for today’s fossil fuel exporters in a low-carbon future? This study explores trade channels between energy exporters and importers using a novel electricity-hydrogen-steel energy systems model calibrated to Norway a major natural gas producer and Germany a major energy consumer. Under tight emission constraints Norway can supply Germany with electricity (blue) hydrogen or natural gas with re-import of captured CO2. Alternatively it can use hydrogen to produce steel through direct reduction and supply it to the world market an export route not available to other energy carriers due to high transport costs. Although results show that natural gas imports with CO2 capture in Germany is the least-cost solution avoiding local CO2 handling via imports of blue hydrogen (direct or embodied in steel) involves only moderately higher costs. A robust hydrogen demand would allow Norway to profitably export all its natural gas production as blue hydrogen. However diversification into local steel production as one example of easy-to-export industrial base products offers an effective hedge against the possibility of lower European blue hydrogen demand. Looking beyond Europe the findings of this study are also relevant for the world’s largest energy exporters (e.g. OPEC+) and importers (e.g. developing Asia). Thus it is recommended that large hydrocarbon exporters consider a strategic energy export transition to a diversified mix of blue hydrogen and climate-neutral industrial base products.

"The Oxford Institute for Energy Studies started researching the role of hydrogen in the energy transition in 2020.  Since then the interest in hydrogen has continued to grow globally across the energy industry. A key research question has been the extent to which clean hydrogen can be scaled up at reasonable cost and whether it can play a significant role in the global energy system. In April 2022 OIES launched a new Hydrogen Research Programme under the overarching theme of ’building business cases for a hydrogen economy’. This overarching theme was selected based on the observation that most clean hydrogen developments to date had been relatively small-scale pilot or demonstration projects typically funded by government grants or subsidies. For clean hydrogen to play a significant role there will need to be business cases developed in order to attract the many hundreds of billions of dollars of investment required  most of which will need to come from the private sector albeit ultimately underpinned by government-backed decarbonisation policies.  Just over a year has passed since the start of the Hydrogen Research Programme and the intention of this paper is to pull together key themes which have emerged from the research so far and which can form a useful framework for further research both by OIES and others.<br/>The six key themes in this paper listed below are intended to create a framework to at least start to address the challenges:<br/>Hydrogen is in competition with other decarbonisation alternatives.<br/>The business case for clean hydrogen relies on government policy to drive decarbonisation.<br/>It is essential to understand emissions associated with potential hydrogen investments.<br/>Hydrogen investments need to consider the full value chain and its geopolitics.<br/>Transport of hydrogen is expensive and so should be minimised.<br/>Storage of hydrogen is an essential part of the value chain and requires more focus.

Purpose: The purpose of the hydrogen supply and demand data stream is to provide an overview of the hydrogen market in Europe and to track industry’s progress in deploying clean hydrogen technologies. Scope: Data about hydrogen production capacity and consumption in EU countries together with Switzerland Norway Iceland and the United Kingdom. Hydrogen production capacity is presented by country and by production technology whereas the hydrogen consumption data is presented by country and by end-use sector. The analysis undertaken for this report was completed using data reflecting end of 2020. Key Findings: The current hydrogen market (on both the demand and supply side) is dominated by refining and ammonia industries with four countries (DE NL PL ES) responsible for more than half of hydrogen consumption. Hydrogen is overwhelmingly produced by reforming of fossil fuels (mostly natural gas). Clean hydrogen production capacities are currently insignificant with hydrogen produced from natural gas coupled with carbon capture at 0.42% and hydrogen produced from water electrolysis at 0.14% of total production capacity.

Hydrogen is among the energy carriers which are most often considered for bringing about a sustainable energy system. Yet so far hydrogen has not delivered as an energy carrier. The core objective of this paper is to provide a comprehensive analysis of the state-of-the-art and the future prospects of green hydrogen in the European energy system from economic energetic and CO2 emissions point-of-view. The analysis shows that there are some increasing opportunities for hydrogen use in industry and in the transport sector when electrification is not possible or is too expensive as well as a storage in the European electricity system. However a hydrogen-based energy system will remain a vision at least over the next decades. The major reason for this is the unfavorable economics mostly due to high investment costs in the whole supply chain. In addition the overall efficiencies in the hydrogen chains are moderate in general. The full environmental benignity of hydrogen as an energy carrier is only provided when renewable energy sources are used for hydrogen production. However in Europe the potentials for green hydrogen are very limited due to the insufficient expansion of renewable electricity generation. For this reason many European countries are considering options for green hydrogen import. The future of hydrogen is highly dependent on the supporting policy framework. To reduce the risk in the investment in hydrogen infrastructure as well as to justify the promotion of green hydrogen it is very important that Europe works out a very clear and realistic long-term implementation strategy.