According to the latest Hydrogen Insight of December 2023 of the Hydrogen Council/McKinsey, electrolyser installations need to increase with a factor of 250, from 1.1GW capacity today to the planned 305 GW in 2030. This will translate in a cost 0f $570 bln and is still far short of the $1 trillion projected by 2030 to arrive at Net Zero in 2050.
While the projection for low-carbon hydrogen demand by 2050 in its net-zero scenario has stayed at 450 million tonnes, the IEA has downgraded the amount forecast for clean hydrogen in this pathway by 2030 from 90 million tonnes in its previous 2022 World Energy Outlook to 69 million tonnes and is sounding alarm on lack of effort to replace fossil hydrogen with clean H2 — amid rising sector emissions.
One reason for this re-evaluation is that technologies for direct electrification are starting to mature — reducing the need for hydrogen to decarbonise certain sectors. The IEA forcast that road transport will be relying “around ten percentage points less on technologies under development [now] in 2050” in part due to “a reduction in the share of hydrogen fuel cell electric heavy-duty vehicles”, given advances in battery-electric trucks…..
Additionally, the agency includes in its list of policies to help decarbonise heating “building energy codes, heating intensity standards, carbon pricing, incentives to adopt heat pumps and clean technologies and bans on the sale of new fossil fuel equipment”, without specific mention of hydrogen.
The IEA expects the largest proportion of the clean H2 used by 2030 in its net zero scenario — 22 million tonnes — will go towards demand from the power sector, while only 20 million tonnes will be used by industry. By 2050 however, while the share of hydrogen for power generation will increase to nearly 75 million tonnes, most H2 will then be used either as transport fuel directly or as a feedstock for e-fuels The IEA estimates that 400GW of electrolytic hydrogen projects, as well as 400 million tonnes of CO2 capture capacity, should be in the pipeline to start operations by 2030, which “could potentially meet the milestones” of the Announced Pledges Scenario (APS), which models the energy system necessary for governments to meet their targets, including national and regional net-zero pledges, on time.
However, the APS only projects around 25 million tonnes of clean H2 by 2030, or around a third of what the IEA projects is needed to stay on a net zero pathway by 2050. Of this, around 6.8 million tonnes of hydrogen is modelled to be used as feedstock for transport fuels and 3.4 million tonnes to power transport directly, with 6 million tonnes of H2 projected to be used by industry and 4.5 million tonnes for power generation.
Meanwhile, the agency’s scenario based on the actual direction of government’s energy policy only anticipates seven million tonnes of low-carbon hydrogen production by the start of next decade, primarily to displace fossil gas-based grey H2 in refining and ammonia production. A ten fold increase in global clean hydrogen production in about 5 years is therefor necessary to stay on course to net zero.