EU, UK hydrogen supply to surpass demand by 2050

Additional reporting by Jake Stones

LONDON (ICIS)–European and UK green and blue hydrogen supply could exceed projected demand by 2050, said market participants at European Hydrogen Backbone (EHB) event on 15 June.

The EU and UK hydrogen demand is expected to be on average 2,150-750TWh corresponding to 20-25% of EU and UK final energy consumption by 2050, reported Dean Peters at consultancy firm Guidehouse in his presentation.

Demand would come from:

– industry sector: 1,200TWh

– power sector: 650TWh

– transport sector: 300TWh

– buildings sector: 0-600TWh

SUPPLY GROWTH

At the same time EU and UK green hydrogen supply potential is set for a gradual rise to 450TWh in 2030, 2,100TWh in 2040 and 4,000TWh in 2050, according to Kees van der Leun at Guidehouse.

Panellists argued that rapid expansion of wind and solar capacity, beyond what is needed for direct electricity, is required to reach the green hydrogen supply potential.

For the projected demand to be covered by green hydrogen only, renewables will have to produce 2,900-3,800TWh by 2050.

Europe can also produce large quantities of blue hydrogen.

By 2040 a network could span Ireland to Hungary or from Spain to the Nordic countries. It is from 2040 that the EHB notes the potential maturity of large-scale renewable capacity. For example, the North Sea has potential for 180GW of offshore wind power capacity to be installed by 2050.

Supply could flow via the Baltic gas pipeline between Denmark and Poland if the line were repurposed, with long-term natural gas contracts on the pipeline expiring by 2037.

DROPPING COSTS

Cost potential for green hydrogen in the EU/UK is also huge. All 4,000TWh green hydrogen potential in 2050 is expected to cost less than €2/kg.

Market participants also said blue hydrogen can speed up emission reductions and can be scaled up quickly.

Blue hydrogen production costs are expected to be €1.4-€2/kg at a carbon price of €50/tCO2e, according to van der Leun.

“[Blue hydrogen] projects announced to date add up to 230TWh by 2030 and 380TWh by 2035 with 70% of these volumes coming from UK and the Netherlands,” added van der Leun.

EUROPEAN COMMISSION’S VIEW

The EU is set to produce 1 million tonnes of hydrogen by 2024, the EU Energy Commissioner Kadri Simson said in her opening statement. Simson said the EU has to lay down the framework in order to boost hydrogen demand across sectors.

Sectors included for feedstock hydrogen demand include:

– Ammonia

– High value chemicals

– Fuel production

– Iron & steel

The Commission is also working to scale up hydrogen in cost-effective way and will propose dedicated hydrogen networks in order to attract investment from both public and private funds, added Simson.

Simson said hydrogen imports from neighbouring countries can complement domestic EU/UK production.

“Europe is collaborating with Morocco and Ukraine for future hydrogen supply. There is a huge scope for global cooperation as US and Japan are keen to develop the technology,” added Simson.

Solar hydrogen from Morocco, Algeria and Tunisia could reach EHB network at a cost of around €1/kg by 2050, said van der Leun.