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5 Empirical Research for Establishing the Potential of Renewable Hydrogen …
Some indirect factors impact the cost competitiveness of the renewable hydrogen production. A higher cost of the CO 2 emissions would reduce the cost
competitiveness of fossil fuel-based hydrogen production compared to renewable hydrogen. Moreover, the capture of CO 2 emissions (CCS), if required, would
add a cost element to the fossil fuel-based hydrogen production. Similarly, a higher cost of the fossil fuels used to produce hydrogen, for instance the natural gas,
would increase the competitiveness of the renewable hydrogen production.
Long running hours of the power-to-gas system, higher merchant value of
renewable hydrogen and a market for merchant oxygen would also contribute
positively to the cost competitiveness of a renewable power-to gas system.
5.1.2 The Hydrogen Demand
The documentation review has shown that hydrogen has been used as feedstock
in the industry sectors for decades. 45 to 65 million tons year −1 of hydrogen are
consumed globally by petrochemical industries.
Over 95% of the hydrogen is produced from fossil fuels via SMR, coal gasification or as by-product of oil refining processes. The SMR is the most utilized
process globally while the coal gasification process is mainstream in China due
to the traditionally coal-based economy. Coal gasification is also widely used in
Australia due to the important coal resource.
The production of fossil fuel-based hydrogen is most cost competitive compared to the production of renewable hydrogen. The production of hydrogen from
fossil fuels has a cost ranging between e 1–1,5 kg –1 H 2 while renewable hydrogen production has a cost ranging between e 3–6 kg −1 H 2 depending on the
renewable energy source.
Hydrogen is used in the production of ammonia. Ammonia is a key element for
the fabrication of fertilizers. Ammonia can also be used in other industry sectors
such as the transportation and energy sectors.
Hydrogen is used in the synthesis of methanol. China is the largest producer of
methanol accounting for more than 60% of the global production capacity. 70%
of the Chinese production is based on coal.
The hydrogen demand in oil refining is continuously increasing with more
stringent regulations for desulphurization. Most of the hydrogen in an oil refinery is produced in-situ, either as a by-product from the refining processes or
from purpose-built natural gas SMR plant. When the hydrogen demand cannot
be covered by the production capacity of the oil refinery, merchant hydrogen is
procured.
5 Empirical Research for Establishing the Potential of Renewable Hydrogen …
Some indirect factors impact the cost competitiveness of the renewable hydrogen production. A higher cost of the CO 2 emissions would reduce the cost
competitiveness of fossil fuel-based hydrogen production compared to renewable hydrogen. Moreover, the capture of CO 2 emissions (CCS), if required, would
add a cost element to the fossil fuel-based hydrogen production. Similarly, a higher cost of the fossil fuels used to produce hydrogen, for instance the natural gas,
would increase the competitiveness of the renewable hydrogen production.
Long running hours of the power-to-gas system, higher merchant value of
renewable hydrogen and a market for merchant oxygen would also contribute
positively to the cost competitiveness of a renewable power-to gas system.
5.1.2 The Hydrogen Demand
The documentation review has shown that hydrogen has been used as feedstock
in the industry sectors for decades. 45 to 65 million tons year −1 of hydrogen are
consumed globally by petrochemical industries.
Over 95% of the hydrogen is produced from fossil fuels via SMR, coal gasification or as by-product of oil refining processes. The SMR is the most utilized
process globally while the coal gasification process is mainstream in China due
to the traditionally coal-based economy. Coal gasification is also widely used in
Australia due to the important coal resource.
The production of fossil fuel-based hydrogen is most cost competitive compared to the production of renewable hydrogen. The production of hydrogen from
fossil fuels has a cost ranging between e 1–1,5 kg –1 H 2 while renewable hydrogen production has a cost ranging between e 3–6 kg −1 H 2 depending on the
renewable energy source.
Hydrogen is used in the production of ammonia. Ammonia is a key element for
the fabrication of fertilizers. Ammonia can also be used in other industry sectors
such as the transportation and energy sectors.
Hydrogen is used in the synthesis of methanol. China is the largest producer of
methanol accounting for more than 60% of the global production capacity. 70%
of the Chinese production is based on coal.
The hydrogen demand in oil refining is continuously increasing with more
stringent regulations for desulphurization. Most of the hydrogen in an oil refinery is produced in-situ, either as a by-product from the refining processes or
from purpose-built natural gas SMR plant. When the hydrogen demand cannot
be covered by the production capacity of the oil refinery, merchant hydrogen is
procured.