Hydrogen to meet 12pc of energy demand by 2050: Irena

  • Market: Hydrogen
  • 18/01/22

The International Renewable Energy Agency (Irena) forecasts low-carbon hydrogen could meet 12pc of final energy use by 2050, if policies are put in place to limit global temperatures to a 1.5°C increase.

Its Geopolitics of the Energy Transformation report projects global demand to near quadruple to around 410mn t/yr from 120mn t/yr in 2020, with green hydrogen produced from renewable energy supplying two-thirds and a third for blue hydrogen that is largely derived from gas but has its carbon emissions captured, stored or reused. Fossil-derived grey hydrogen, almost all the hydrogen currently produced, is expected to be entirely phased out.

Green hydrogen by 2030 may become cost-competitive with blue hydrogen in China because of low-cost electrolysers and in India and Brazil where renewables are cheap and gas is expensive, the report said.

"The expected cost reduction in green hydrogen coupled with stricter climate mitigation policies means that investments in blue or grey [hydrogen] may end up stranded," the report said.

More than 30 countries now have hydrogen plans compared with only Japan in 2017, with the emergence of a low-carbon hydrogen market likely to affect economic and political relations.

"Australia, Chile, Morocco, Saudi Arabia and the United States are best placed to emerge as major clean hydrogen producers by 2050", the report said. Australia, Saudi Arabia and the US can retain their role as energy exporters but countries such as Chile, Morocco and Namibia could flip to become net exporters of energy and "gain in geostrategic importance".

Japan, South Korea and parts of Europe and Latin America will probably need imports to satisfy demand, the report said, highlighting that Germany and Japan are already engaged in diplomacy to secure access to hydrogen.

Around 85pc of hydrogen is currently produced and consumed on site because transporting the gas is impractical and costly. Irena expects two-thirds will be consumed domestically by 2050 and the remainder traded internationally. Of this, half is predicted to move via pipeline — including repurposed natural gas pipelines — while the other half is predicted to move in the form of ammonia that is more energy dense and easier to liquefy.

The report suggests clean hydrogen should be prioritised for use in refineries, followed by steel manufacturing and international shipping. Electrification-based solutions were preferred for urban vehicles, short-term energy storage and residential heating.


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Long-term contracts needed to stabilise gas prices: MET

Long-term contracts needed to stabilise gas prices: MET

London, 28 March (Argus) — Germany and Europe need more LNG and business-to-business long-term contracts to even out supply shocks and stabilise gas prices, even as demand is unlikely to reach historical heights again, chief executive of Swiss trading firm MET's German subsidiary Joerg Selbach-Roentgen told Argus . Long-term LNG contracts have a "stabilising effect" on prices when "all market participants know there is enough coming", Selbach-Roentgen said. He is not satisfied with the amount of long-term LNG supply contracted into Germany, arguing that stabilisation remains important even now that the market has "cooled down" after the price shocks of 2022. Long-term contracts are important for the standing of German industry, Selbach-Roentgen said — not to be reliant on spot cargoes is a matter of global competitiveness for the industrial gas market, he said. The chief executive called for more long-term contracts in other areas as well, such as for industrial offtakers, either fixed price or index-driven. Since long-term LNG contracts are concluded between wholesalers and producers, the latter need long-term planning security for their projects, which usually leads to terms of about 20 years. But long-term LNG contracts in general do not represent a major risk for MET nor for industrial offtakers in Europe, Selbach-Roentgen said. LNG is a more flexibly-structured "solution" to expected demand drops in regard to the energy transition as the tail end can be shipped to companies on other continents such as Asia if European demand wanes, he said. Gas demand is not likely to recover to "historical heights" again, mostly driven by industrials "jumping ship", Selbach-Roentgen said. When talking to large industrial companies, the discussion is often about the option that they might divert investments away from the German market as the price environment is "not attractive enough" for them any longer in terms of planning security, the chief executive said. This trend started out of necessity in reaction to the price spikes but may now be connected to longer-term "strategic" considerations, he said. In addition, industrial decarbonisation — as well as industrial offtakers' risk aversion because of the volatile gas market following Russian gas supply curtailments — leads companies to invest less into longer-term gas dependencies in Germany, Selbach-Roentgen said. In addition, MET advocates for a green gas blending obligation of 1-2pc green gas or hydrogen, in line with legislative drafts under discussion by the German government. This has already met with interest by offtakers, despite uncertainties around availability and prices, and would provide a regulatory framework that allows firms to prepare for the energy transition, Selbach-Roentgen said. By Till Stehr and Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Africa’s H2 project development lags behind: report


27/03/24
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27/03/24

Africa’s H2 project development lags behind: report

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Jera delays Hekinan NH3-coal co-firing test: Correction


26/03/24
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26/03/24

Jera delays Hekinan NH3-coal co-firing test: Correction

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25/03/24
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25/03/24

Brazilian ports ally for decarbonization goals

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25/03/24
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25/03/24

Oil sands producers plan CCS network, hub

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