40
4 Scientific Literature Review for Establishing the Status …
4.4
The Substitution of Fossil-Fuel Based Hydrogen
by Renewable Hydrogen
In a context of increasing curtailment episodes, negative market prices and competitive and mature energy storage alternatives, the power-to-gas technology
becomes a relevant candidate to secure additional revenue streams for renewable
energy projects developers. The industrial sectors working on baseload operation
to boost production and profitability require reliable sources of hydrogen. The
demand is mostly fulfilled by fossil fuels which have severe sustainability and
economic limitations. Currently, 45 to 65 Mt year −1 hydrogen is produced globally as feedstock for chemical and petrochemical industries. This is equivalent to
about 1% of the global energy supply. 50% is produced from SMR, 30% from partial oxidation of crude oil, 18% from coal gasification and the remaining 4% from
water electrolysis (Staffell et al. 2019). The supply of renewable hydrogen would
enable the decarbonisation of the non-energetic use of fossil fuels in the petrochemical industry (ammonia, ethanol, oil refining) and in the future steel industry
(Fasihi and Breyer 2019). However, long equipment lifetime such as SMR and
investment cycles indicates that change will be slow (Staffell et al. 2019).
The power-to-gas technology provides flexibility in three dimensions (van
Leeuwen and Mulder 2018). The first dimension is the time. The time flexibility
enables adapting the timing of using the electricity and producing the hydrogen,
for instance when the electricity prices are negative. The second dimension is the
location. Instead of transporting the energy in form of electricity, the energy can
be transported in a chemical form with hydrogen. Existing pipelines and shipping
lines can substitute capital-intensive electricity infrastructures. The transportation
of energy in chemical form reduces losses occurring during the transportation process. The renewable energy can then be provided to end-users located far away
from the renewable energy production location. The third dimension is the enduse flexibility. With the change of energy vector, the renewable energy can be used
in industry sectors that cannot be easily electrified (i.e. fertilizer manufacturers,
steel manufacturing, oil refinery). This is called sector-coupling. The hydrogen
can be used as such (i.e. in fuel cells) or converted into another substance such
as ammonia or methanol (Levi and Cullen 2018).
Hydrogen produced from renewable energy sources provides a credible alternative to carbon-intensive fossil fuels. The power-to gas technology offers an
excellent complementarity with intermittent renewable energy sources such as
wind and solar. While the power-to-gas technology is not cost competitive with
the fossil fuel-based production methods, the rapid decrease of renewable energy
sources may change this paradigm. As both electricity prices and renewable power
4 Scientific Literature Review for Establishing the Status …
4.4
The Substitution of Fossil-Fuel Based Hydrogen
by Renewable Hydrogen
In a context of increasing curtailment episodes, negative market prices and competitive and mature energy storage alternatives, the power-to-gas technology
becomes a relevant candidate to secure additional revenue streams for renewable
energy projects developers. The industrial sectors working on baseload operation
to boost production and profitability require reliable sources of hydrogen. The
demand is mostly fulfilled by fossil fuels which have severe sustainability and
economic limitations. Currently, 45 to 65 Mt year −1 hydrogen is produced globally as feedstock for chemical and petrochemical industries. This is equivalent to
about 1% of the global energy supply. 50% is produced from SMR, 30% from partial oxidation of crude oil, 18% from coal gasification and the remaining 4% from
water electrolysis (Staffell et al. 2019). The supply of renewable hydrogen would
enable the decarbonisation of the non-energetic use of fossil fuels in the petrochemical industry (ammonia, ethanol, oil refining) and in the future steel industry
(Fasihi and Breyer 2019). However, long equipment lifetime such as SMR and
investment cycles indicates that change will be slow (Staffell et al. 2019).
The power-to-gas technology provides flexibility in three dimensions (van
Leeuwen and Mulder 2018). The first dimension is the time. The time flexibility
enables adapting the timing of using the electricity and producing the hydrogen,
for instance when the electricity prices are negative. The second dimension is the
location. Instead of transporting the energy in form of electricity, the energy can
be transported in a chemical form with hydrogen. Existing pipelines and shipping
lines can substitute capital-intensive electricity infrastructures. The transportation
of energy in chemical form reduces losses occurring during the transportation process. The renewable energy can then be provided to end-users located far away
from the renewable energy production location. The third dimension is the enduse flexibility. With the change of energy vector, the renewable energy can be used
in industry sectors that cannot be easily electrified (i.e. fertilizer manufacturers,
steel manufacturing, oil refinery). This is called sector-coupling. The hydrogen
can be used as such (i.e. in fuel cells) or converted into another substance such
as ammonia or methanol (Levi and Cullen 2018).
Hydrogen produced from renewable energy sources provides a credible alternative to carbon-intensive fossil fuels. The power-to gas technology offers an
excellent complementarity with intermittent renewable energy sources such as
wind and solar. While the power-to-gas technology is not cost competitive with
the fossil fuel-based production methods, the rapid decrease of renewable energy
sources may change this paradigm. As both electricity prices and renewable power