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The Future of Hydrogen and scaling up Hydrogen in emerging market

image credit: AHEAD THROUGH BLOCKCHAIN ​​STRATEGIES - SIMPLY NATURALLY BETTER THROUGH WHITE TECHNOLOGIES - IEA

The Future of Hydrogen

 

IEA’s 7 key recommendations to scale up Hydrogen in emerging  markets

 

Hydrogen is a versatile energy carrier, which can help to tackle various critical energy challenges. Hydrogen can be produced from almost all energy resources, though today’s use of Hydrogen in oil refining and chemical production is mostly covered by Hydrogenfrom fossil fuels, with significant associated CO2 emissions. 

 

hydrogen through iridium catalyst

 

 

"Hydrogen is today enjoying unprecedented momentum. The world should not miss this unique chance to make Hydrogen an important part of our clean and secure energy future."

 

 

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World Energy Investment 2020

 

Clean Hydrogen, being produced from renewables, nuclear or fossil fuels with CCUS, can help to decarbonise a range of sectors, including long-haul transport, chemicals, iron and steel, where it is proven difficult to reduce emissions. Hydrogen can also help to improve air quality in cities and improve energy security. Hydrogen can also support the integration of variable renewables in the electricity system, being one of the very few options for storing electricity over days, weeks or months.

 

Today Hydrogen is mainly used in the refining and chemical sectors and produced from fossils, accounting for 6% of global natural gas use and 2% of coal consumption and being responsible for 830 MtCO2 of annual CO2 emissions. Scale-up will be critical to bring down the costs of technologies for producing and using clean Hydrogen, such as electrolysers, fuel cells and Hydrogen production with CCUS.

 

 

IEA

 

 

 

A record year for electrolysis capacity

 

Hydrogen technologies maintained strong momentum in 2019, awakening keen interest among policy makers. It was a record year for electrolysis capacity becoming operational and several significant announcements were made for upcoming years. The fuel cell electric vehicle market almost doubled owing to outstanding expansion in China, Japan and Korea. However, low-carbon production capacity remained relatively constant and is still off track with the SDS.

 

 

Demand for Hydrogen continues to rise, almost entirely supplied from fossil fuels

Supplying Hydrogen to industrial users is now a major business around the world. Demand for Hydrogen, which has grown more than threefold since 1975, continues to rise – almost entirely supplied from fossil fuels, with 6% of global natural gas and 2% of global coal going to Hydrogen production. As a consequence, production of Hydrogen is responsible for CO2 emissions of around 830 million tonnes of carbon dioxide per year, equivalent to the CO2 emissions of the United Kingdom and Indonesia combined.

 

Hydrogen TCP

The Hydrogen TCP, founded in 1977, works to accelerate Hydrogen implementation and widespread utilisation in the areas of production, storage, distribution, power, heating, mobility and industry. The Hydrogen TCP seeks to optimise environmental protection, improve energy security, transform global energy systems and grid management, and promote international economic development, as well as serving as the premier global resource for expertise in all aspects of Hydrogen technology.

 

From oil security to steering the world toward secure and sustainable energy transitions

The IEA was born with the 1973-1974 oil crisis, when industrialised countries found they were not adequately equipped to deal with the oil embargo imposed by major producers that pushed prices to historically high levels. 

 

 

IEA Clean Energy Transitions Summit

 

 

 

This first oil shock led to the creation of the IEA in November 1974 with a broad mandate on energy security and energy policy co-operation. This included setting up a collective action mechanism to respond effectively to potential disruptions in oil supply. The framework was anchored in the IEA treaty called the “Agreement on an International Energy Program,” with newly created autonomous Agency hosted at the OECD in Paris.

The IEA was established as the main international forum for energy co-operation on a variety of issues such as security of supply, long-term policy, information transparency, energy efficiency, sustainability, research and development, technology collaboration, and international energy relations.

 

 

Modernization strategy

 

While energy security remains a core mission, the IEA has evolved over the years, adapting to the transformation of the global energy system. Today, the IEA is at the heart of global dialogue on energy, providing authoritative statistics and analysis and examining the full spectrum of energy issues, advocating policies that will enhance the reliability, affordability and sustainability of energy in its 30 members countries and beyond.

In 2015, the IEA’s Ministerial Meeting approved a new modernization strategy presented by the Agency’s newly appointed Executive Director, Dr Fatih Birol, to strengthen the Agency’s role as an authoritative voice on global energy policy. Ministers the focus on creating a more inclusive and truly global agency through closer engagement with emerging energy economies.

The modernization of the IEA was structured under three pillars: strengthening and broadening the IEA’s commitment to energy security beyond oil, to natural gas and electricity; deepening the IEA’s engagement with major emerging economies; and providing a greater focus on clean energy technology, including energy efficiency.

The Agency’s successful “open door” policy allowed the IEA to deepen its collaboration with eight new countries through the Association progamme: Brazil, China, India, Indonesia, Morocco, Thailand, Singapore, and South Africa. The IEA family now represents about 75% of global energy consumption, up from 40% in 2015.

 

Sustainable Recovery

 

IEA

 

Sustainable Recovery, from the IEA’s flagship World Energy Outlook series, sets out a plan that offers an energy sector roadmap for governments to spur economic growth, create millions of jobs and put global emissions into structural decline. By integrating energy policies into government responses to the economic shock caused by the Covid-19 crisis, the plan would also accelerate the deployment of modern, reliable and clean energy technologies and infrastructure.

 

Past and present leadership

 

 

The IEA has had seven Executive Directors since its creation:

 

Ulf Lantzke, Germany (1975-1984); Helga Steeg, Germany (1984-1994); Robert Priddle, United Kingdom (1994-2003); Claude Mandil, France (2003-2007); Nobuo Tanaka, Japan (2007-2011); Maria van der Hoeven, Netherlands (2011-2015); and Dr Fatih Birol, Turkey (since 2015).

 

At the heart of global dialogue on energy

 

The IEA works with governments and industry to shape a secure and sustainable energy future for all

 

The IEA is at the heart of global dialogue on energy, providing authoritative analysis, data, policy recommendations, and real-world solutions to help countries provide secure and sustainable energy for all.

The IEA was created in 1974 to help co-ordinate a collective response to major disruptions in the supply of oil. While oil security this remains a key aspect of our work, the IEA has evolved and expanded significantly since its foundation.

Taking an all-fuels, all-technology approach, the IEA advocates policies that enhance the reliability, affordability and sustainability of energy. It examines the full spectrum issues including renewables, oil, gas and coal supply and demand, energy efficiency, clean energy technologies, electricity systems and markets, access to energy, demand-side management, and much more.

Since 2015, the IEA has opened its doors to major emerging countries to expand its global impact, and deepen cooperation in energy security, data and statistics, energy policy analysis, energy efficiency, and the growing use of clean energy technologies.

 

Hydrogen is today enjoying unprecedented momentum

 

The world should not miss this unique chance to make Hydrogen an important part of our clean and secure energy future.

 

Hydrogen and energy have a long shared history – powering the first internal combustion engines over 200 years ago to becoming an integral part of the modern refining industry. It is light, storable, energy-dense, and produces no direct emissions of pollutants or greenhouse gases. But for Hydrogen to make a significant contribution to clean energy transitions, it needs to be adopted in sectors where it is almost completely absent, such as transport, buildings and power generation.

The Future of Hydrogen provides an extensive and independent survey of Hydrogen that lays out where things stand now; the ways in which Hydrogen can help to achieve a clean, secure and affordable energy future; and how we can go about realising its potential.

 

World Energy Outlook: A world in transformation

 

The International Energy Agency’s flagship publication, finds that over the next two decades the global energy system is being reshaped by major forces: the United States is set to become the undisputed global oil and gas leader; renewables are being deployed rapidly thanks to falling costs; the share of electricity in the energy mix is growing, and China’s new economic strategy takes it on a cleaner growth mode.

 

IEA

 

 

 

Hydrogen production

Hydrogen can be extracted from fossil fuels and biomass, from water, or from a mix of both. Natural gas is currently the primary source of Hydrogen production, accounting for around three quarters of the annual global dedicated Hydrogen production of around 70 million tonnes. This accounts for about 6% of global natural gas use. Gas is followed by coal, due to its dominant role in China, and a small fraction is produced from from the use of oil and electricity.

The production cost of Hydrogen from natural gas is influenced by a range of technical and economic factors, with gas prices and capital expenditures being the two most important. 

Fuel costs are the largest cost component, accounting for between 45% and 75% of production costs. Low gas prices in the Middle East, Russia and North America give rise to some of the lowest Hydrogen production costs. Gas importers like Japan, Korea, China and India have to contend with higher gas import prices, and that makes for higher Hydrogen production costs.

 

Demand for Hydrogen

Supplying Hydrogen to industrial users is now a major business around the world. Demand for Hydrogen, which has grown more than threefold since 1975, continues to rise – almost entirely supplied from fossil fuels, with 6% of global natural gas and 2% of global coal going to Hydrogen production.

As a consequence, production of Hydrogen is responsible for CO2 emissions of around 830 million tonnes of carbon dioxide per year, equivalent to the CO2 emissions of the United Kingdom and Indonesia combined.

 

Keeping an eye on costs

Dedicated electricity generation from renewables or nuclear power offers an alternative to the use of grid electricity for Hydrogen production.

With declining costs for renewable electricity, in particular from solar PV and wind, interest is growing in electrolytic Hydrogen and there have been several demonstration projects in recent years. Producing all of today’s dedicated Hydrogen output from electricity would result in an electricity demand of 3 600 TWh, more than the total annual electricity generation of the European Union.

With declining costs for solar PV and wind generation, building electrolysers at locations with excellent renewable resource conditions could become a low-cost supply option for Hydrogen, even after taking into account the transmission and distribution costs of transporting Hydrogen from (often remote) renewables locations to the end-users.

 

The IEA’s 7 key recommendations to scale up Hydrogen

 

Establish a role for Hydrogen in long-term energy strategies. National, regional and city governments can guide future expectations. Companies should also have clear long-term goals. Key sectors include refining, chemicals, iron and steel, freight and long-distance transport, buildings, and power generation and storage.

 

 

1

Stimulate commercial demand for clean Hydrogen.

Clean Hydrogen technogies are available but costs remain challenging. Policies that create sustainable markets for clean Hydrogen, especially to reduce emissions from fossil fuel-based Hydrogen, are needed to underpin investments by suppliers, distributors and users. By scaling up supply chains, these investments can drive cost reductions, whether from lowcarbon electricity or fossil fuels with carbon capture, utilisation and storage.

 

2

Address investment risks of first-movers.

New applications for Hydrogen, as well as clean Hydrogen supply and infrastructure projects, stand at the riskiest point of the deployment curve. Targeted and time-limited loans, guarantees and other tools can help the private sector to invest, learn and share risks and rewards.

 

3

Support R&D to bring down costs.

Alongside cost reductions from economies of scale, R&D is crucial to lower costs and improve performance, including for fuel cells, Hydrogen-based fuels and electrolysers (the technology that produces Hydrogen from water). Government actions, including use of public funds, are critical in setting the research agenda, taking risks and attracting private capital for innovation.

 

4

Eliminate unnecessary regulatory barriers and harmonise standards.

Project developers face hurdles where regulations and permit requirements are unclear, unfit for new purposes, or inconsistent across sectors and countries. Sharing knowledge and harmonising standards is key, including for equipment, safety and certifying emissions from different sources. Hydrogen’s complex supply chains mean governments, companies, communities and civil society need to consult regularly.

 

5

Engage internationally and track progress.

Enhanced international cooperation is needed across the board but especially on standards, sharing of good practices and cross-border infrastructure. Hydrogen production and use need to be monitored and reported on a regular basis to keep track of progress towards longterm goals.

 

6

Engage internationally and track progress.

Enhanced international cooperation is needed across the board but especially on standards, sharing of good practices and cross-border infrastructure. Hydrogen production and use need to be monitored and reported on a regular basis to keep track of progress towards longterm goals.

 

7

Near term, practical opportunities for policy action.

Hydrogen is already widely used in some industries, but it has not yet realised its potential to support clean energy transitions. Ambitious, targeted and near-term action is needed to further overcome barriers and reduce costs.

The IEA has identified four value chains that offer springboard opportunities to scale up Hydrogen supply and demand, building on existing industries, infrastructure and policies. Governments and other stakeholders will be able to identify which of these offer the most near-term potential in their geographical, industrial and energy system contexts.

Regardless of which of these four key opportunities are pursued – or other value chains not listed here – the full policy package of five action areas listed above will be needed. Furthermore, governments – at regional, national or community levels – will benefit from international cooperation with others who are working to drive forward similar markets for Hydrogen.

 

 

Executive perspective

 

The time is right to tap into Hydrogen’s potential to play a key role in a clean, secure and affordable energy future.

 

At the request of the government of Japan under its G20 presidency, the International Energy Agency (IEA) has produced this landmark report to analyse the current state of play for Hydrogen and to offer guidance on its future development. The report finds that clean Hydrogen is currently enjoying unprecedented political and business momentum, with the number of policies and projects around the world expanding rapidly. It concludes that now is the time to scale up technologies and bring down costs to allow Hydrogen to become widely used. The pragmatic and actionable recommendations to governments and industry that are provided will make it possible to take full advantage of this increasing momentum.

 

Hydrogen can help tackle various critical energy challenges.

It offers ways to decarbonise a range of sectors – including long-haul transport, chemicals, and iron and steel – where it is proving difficult to meaningfully reduce emissions. It can also help improve air quality and strengthen energy security. Despite very ambitious international climate goals, global energy-related CO2 emissions reached an all time high in 2018. Outdoor air pollution also remains a pressing problem, with around 3 million people dying prematurely each year.

 

Hydrogen is versatile.

Technologies already available today enable Hydrogen to produce, store, move and use energy in different ways. A wide variety of fuels are able to produce Hydrogen, including renewables, nuclear, natural gas, coal and oil. It can be transported as a gas by pipelines or in liquid form by ships, much like liquefied natural gas (LNG). It can be transformed into electricity and methane to power homes and feed industry, and into fuels for cars, trucks, ships and planes.

 

Hydrogen can enable renewables to provide an even greater contribution.

It has the potential to help with variable output from renewables, like solar photovoltaics (PV) and wind, whose availability is not always well matched with demand. Hydrogen is one of the leading options for storing energy from renewables and looks promising to be a lowest-cost option for storing electricity over days, weeks or even months. Hydrogen and Hydrogen-based fuels can transport energy from renewables over long distances – from regions with abundant solar and wind resources, such as Australia or Latin America, to energy-hungry cities thousands of kilometres away.

 

There have been false starts for Hydrogen in the past; this time could be different.

The recent successes of solar PV, wind, batteries and electric vehicles have shown that policy and technology innovation have the power to build global clean energy industries. With a global energy sector in flux, the versatility of Hydrogen is attracting stronger interest from a diverse group of governments and companies. Support is coming from governments that both import and export energy as well as renewable electricity suppliers, industrial gas producers, electricity and gas utilities, automakers, oil and gas companies, major engineering firms, and cities. Investments in Hydrogen can help foster new technological and industrial development in economies around the world, creating skilled jobs.

 

Hydrogen can be used much more widely.

Today, Hydrogen is used mostly in oil refining and for the production of fertilisers. For it to make a significant contribution to clean energy transitions, it also needs to be adopted in sectors where it is almost completely absent at the moment, such as transport, buildings and power generation.

 

 

However, clean, widespread use of
Hydrogen in global energy transitions
faces several challenges

 

 

Producing Hydrogen from low-carbon energy is costly at the moment. 

IEA analysis finds that the cost of producing Hydrogen from renewable electricity could fall 30% by 2030 as a result of declining costs of renewables and the scaling up of Hydrogen production. Fuel cells, refuelling equipment and electrolysers (which produce Hydrogen from electricity and water) can all benefit from mass manufacturing.

 

The development of Hydrogen infrastructure is slow and holding back widespread adoption. 

Hydrogen prices for consumers are highly dependent on how many refuelling stations there are, how often they are used and how much Hydrogen is delivered per day. Tackling this is likely to require planning and coordination that brings together national and local governments, industry and investors.

 

Hydrogen is almost entirely supplied from natural gas and coal today. 

Hydrogen is already with us at industrial scale all around the world, but its production is responsible for annual CO2 emissions equivalent to those of Indonesia and the United Kingdom combined. Harnessing this existing scale on the way to a clean energy future requires both the capture of CO2 from Hydrogen production from fossil fuels and greater supplies of Hydrogen from clean electricity.

 

Regulations currently limit the development of a clean Hydrogen industry. 

Government and industry must work together to ensure existing regulations are not an unnecessary barrier to investment. Trade will benefit from common international standards for the safety of transporting and storing large volumes of Hydrogen and for tracing the environmental impacts of different Hydrogen supplies.

 

The IEA has identified four near-term opportunities to boost Hydrogen on the path towards its clean, widespread use. 

Focusing on these real-world springboards could help Hydrogen achieve the necessary scale to bring down costs and reduce risks for governments and the private sector. While each opportunity has a distinct purpose, all four also mutually reinforce one another.

 

Make industrial ports the nerve centres for scaling up the use of clean Hydrogen. 

Today, much of the refining and chemicals production that uses Hydrogen based on fossil fuels is already concentrated in coastal industrial zones around the world, such as the North Sea in Europe, the Gulf Coast in North America and southeastern China. Encouraging these plants to shift to cleaner Hydrogen production would drive down overall costs. These large sources of Hydrogen supply can also fuel ships and trucks serving the ports and power other nearby industrial facilities like steel plants.

 

Build on existing infrastructure, such as millions of kilometres of natural gas pipelines.

Introducing clean Hydrogen to replace just 5% of the volume of countries’ natural gas supplies would significantly boost demand for Hydrogen and drive down costs.
 

Expand Hydrogen in transport through fleets, freight and corridors. 

Powering high-mileage cars, trucks and buses to carry passengers and goods along popular routes can make fuel-cell vehicles more competitive.

 

Launch the Hydrogen trade’s first international shipping routes. 

Lessons from the successful growth of the global LNG market can be leveraged. International Hydrogen trade needs to start soon if it is to make an impact on the global energy system.

 

International co‑operation is vital to accelerate the growth of versatile, clean Hydrogen around the world. 

If governments work to scale up Hydrogen in a co‑ordinated way, it can help to spur investments in factories and infrastructure that will bring down costs and enable the sharing of knowledge and best practices. Trade in Hydrogen will benefit from common international standards. As the global energy organisation that covers all fuels and all technologies, the IEA will continue to provide rigorous analysis and policy advice to support international co‑operation and to conduct effective tracking of progress in the years ahead.

As a roadmap for the future, we are offering seven key recommendations to help governments, companies and others to seize this chance to enable clean Hydrogen to fulfil its long-term potential.

 

AHEAD THROUGH BLOCKCHAIN ​​STRATEGIES AND SUPPLY CHAIN ​​SOLUTIONS OF THE NEXT FUTURE - SIMPLY NATURALLY BETTER THROUGH WHITE TECHNOLOGIES 

Raw materials are crucial to the economy. They form a strong industrial base in which a wide range of goods and applications of daily life as well as modern technologies are produced. Reliable and unhindered access to certain raw materials froms worldwide a upcoming challenge to be solved. Analytical thinking, goal-oriented approaches and the fascination of "out of the box thinking" enables me to channel challenges in the daily business into opportunities and to create benefits where nobody expects them. I'm fascinated by the impossible and always motivated to initiate and realize them through innovative and creative approaches. 

HATVANI ROBERT - SSR - STRATEGIC SUPPLYCHAIN REDUNDANCY

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