Contracts for Difference (CfD): Allocation Round 4

Contracts for Difference (CfD): Allocation Round 4

The next Contracts for Difference (CfD) auction will begin in December, the Department for Business, Energy and Industrial Strategy (BEIS) has confirmed.

By confirming that the round won’t take place until December, BEIS hopes to “provide further clarity to prospective participants” it said.

The announcement was made alongside the release of the government’s response to the changes to Supply Chain Plans and the CfD contract, which it launched in November 2020. This confirmed the decision to bring forward the assessment of a developer’s delivery of its supply chain commitments to shortly after a project’s Milestone Delivery Date.

Additionally, it confirmed that new powers in legislation will be given to the Secretary of State to assess a Supply Chain Implementation Statement, and either pass or refuse it. It also confirmed the introduction of a new Operational Condition Precedent, which has the potential for a CfD contract to be terminated if the Statement isn’t provided by a Low Carbon Contracts Company.

These latest supply chain proposals set out “challenging new demands for project developers” said RenewableUK’s deputy chief executive Melanie Onn, adding that it’s “vital” that guidance is clear on how the contribution towards job creation, skills development and fostering innovation in the supply chain is demonstrated.

“Project developers are already working with manufacturers to help them understand our projects’ needs and timelines, which will support investment in new facilities and the development of new skills in our workforce.

“Underpinning all this, we need large volumes of new capacity in the next CfD auction for new contracts to generate clean power to keep us on track for our 2030 target, quadrupling what we’ve already installed”.

It’s hoped the CfD round will double renewable energy capacity compared with the last round, expanding technologies including offshore wind, onshore wind, solar, tidal and floating offshore wind. The response from BEIS additionally confirmed that phasing will not be extended to floating offshore wind.

Round four will be particularly significant as established ‘Pot One’ technologies including solar PV and onshore wind will be able to bid in, with BEIS targeting support for 12 GW of new renewable capacity. In November, the government confirmed that the negative pricing rule for projects would be extended, however it is consulting further on potential amendments for energy storage and system flexibility.

Contracts for Difference (CfD): Allocation Round 4

UK government launches first-ever Hydrogen Strategy

The UK’s first-ever Hydrogen Strategy drives forward the commitments laid out in the Prime Minister’s ambitious 10 Point Plan for a green industrial revolution by setting the foundation for how the UK government will work with industry to meet its ambition for 5GW of low carbon hydrogen production capacity by 2030 – the equivalent of replacing natural gas in powering around 3 million UK homes each year as well as powering transport and businesses, particularly heavy industry.

  • First-ever vision to kick start world-leading hydrogen economy set to support over 9,000 UK jobs and unlock £4 billion investment by 2030
  • consultation also launched to look at ways to overcome cost gap between low carbon hydrogen and fossil fuels
  • £105 million in UK government funding provided to support polluting industries to significantly slash their emissions

Tens of thousands of jobs, billions of pounds in investment and new export opportunities will be unlocked through government plans to create a thriving low carbon hydrogen sector in the UK over the next decade and beyond, the Business and Energy Secretary Kwasi Kwarteng has set out today (17 August).

A booming, UK-wide hydrogen economy could be worth £900 million and create over 9,000 high-quality jobs by 2030, potentially rising to 100,000 jobs and worth up to £13 billion by 2050. By 2030, hydrogen could play an important role in decarbonising polluting, energy-intensive industries like chemicals, oil refineries, power and heavy transport like shipping, HGV lorries and trains, by helping these sectors move away from fossil fuels. Low-carbon hydrogen provides opportunities for UK companies and workers across our industrial heartlands.

With government analysis suggesting that 20-35% of the UK’s energy consumption by 2050 could be hydrogen-based, this new energy source could be critical to meet our targets of net zero emissions by 2050 and cutting emissions by 78% by 2035 – a view shared by the UK’s independent Climate Change Committee. In the UK, a low-carbon hydrogen economy could deliver emissions savings equivalent to the carbon captured by 700 million trees by 2032 and is a key pillar of capitalising on cleaner energy sources as the UK moves away from fossil fuels.

Business & Energy Secretary Kwasi Kwarteng said:

Today marks the start of the UK’s hydrogen revolution. This home-grown clean energy source has the potential to transform the way we power our lives and will be essential to tackling climate change and reaching Net Zero.

With the potential to provide a third of the UK’s energy in the future, our strategy positions the UK as first in the global race to ramp up hydrogen technology and seize the thousands of jobs and private investment that come with it.

Energy & Climate Change Minister Anne-Marie Trevelyan said:

Today’s Hydrogen Strategy sends a strong signal globally that we are committed to building a thriving low carbon hydrogen economy that could deliver hundreds of thousands of high-quality green jobs, helps millions of homes transition to green energy, support our key industrial heartlands to move away from fossil fuels and bring in significant investment.

The government’s approach is based on the UK’s previous success with offshore wind, where early government action coupled with strong private sector backing has earned the UK a world leading status. One of the main tools used by government to support the establishment of offshore wind in the UK was the Contracts for Difference (CfD) scheme, which incentivises investment in renewable energy by providing developers with direct protection from volatile wholesale prices and protects consumers from paying increased support costs when electricity prices are high.

As such, the government has today launched a public consultation on a preferred hydrogen business model which, built on a similar premise to the offshore wind CfDs, is designed to overcome the cost gap between low carbon hydrogen and fossil fuels, helping the costs of low-carbon alternatives to fall quickly, as hydrogen comes to play an increasing role in our lives. Alongside this, the government is consulting on the design of the £240 million Net Zero Hydrogen Fund, which aims to support the commercial deployment of new low carbon hydrogen production plants across the UK.

Other measures included in the UK’s first-ever Hydrogen Strategy include:

  • outlining a ‘twin track’ approach to supporting multiple technologies including ‘green’ electrolytic and ‘blue’ carbon capture-enabled hydrogen production, and committing to providing further detail in 2022 on the government’s production strategy
  • collaborating with industry to develop a UK standard for low carbon hydrogen giving certainty to producers and users that the hydrogen the UK produces is consistent with net zero while supporting the deployment of hydrogen across the country
  • undertaking a review to support the development of the necessary network and storage infrastructure to underpin a thriving hydrogen sector
  • working with industry to assess the safety, technical feasibility, and cost effectiveness of mixing 20% hydrogen into the existing gas supply. Doing so could deliver a 7% emissions reduction on natural gas
  • launching a hydrogen sector development action plan in early 2022 setting out how the government will support companies to secure supply chain opportunities, skills and jobs in hydrogen

CEO of ITM Power Dr Graham Cooley said:

By supporting the creation of a UK home market, today’s announcement is a very welcome step in helping British companies cement their positions as world leaders in hydrogen technology. The industry needs a policy landscape in place that identifies priorities and support mechanisms for rolling out green hydrogen production in the UK and that’s just what today’s Hydrogen Strategy sets out.

Green, zero-carbon hydrogen can abate greenhouse gas emissions from industry, transport and heat. It can be used to store our abundant renewable energy from offshore wind and longer term, be used to create export markets. This is a win for the UK’s decarbonisation plans, a win for cleaner air and a win for British jobs.

Hydrogen Director at National Grid Antony Green said:

The transition to a green economy will require a mix of technologies and hydrogen will play a vital role. This strategy signals the UK’s commitment to hydrogen and provides the certainty needed to boost consumer and investor confidence and support commercial solutions. Importantly, unlocking the potential of hydrogen as a clean energy solution requires significant pace and innovation to scale up production, and the guidance from government today will be key to triggering the investment and buy-in needed to achieve this.

Chief Policy Director at CBI Matthew Fell said:

With hydrogen key to unlocking decarbonisation across carbon-intensive sectors, as well as stimulating high levels of skilled green jobs, the government’s Hydrogen Strategy is a key milestone in the delivery of the UK’s 10 Point Plan.

As a leader in high skilled manufacturing, and with an extensive legacy in energy production, the UK stands perfectly positioned to capitalise on the opportunities provided by hydrogen.

As the countdown to COP26 continues, hydrogen is an area where the UK can lead by example on the global stage, showcasing the value of strong partnerships between government and the private sector on the road to reducing emissions.

Chief Executive at SSE Alistair Phillips-Davies said:

We strongly welcome the publication of this first-ever Hydrogen Strategy and hope to turn this encouraging strategy into firm and rapid action through our exciting plans. These include working with Equinor on the world’s first major hydrogen-fired power station at Keadby and developing hydrogen storage caverns at Aldbrough, as well as our partnership with Siemens Gamesa to co-locate hydrogen production facilities at our wind farms. The strategy is a welcome first step to realising the potential of hydrogen.

Prioritising and supporting polluting industries to significantly slash their emissions, the government also announced today a £105 million funding package through its Net Zero Innovation Portfolio that will act as a first step to build up Britain’s low carbon hydrogen economy. The investment will help industries to develop low carbon alternatives for industrial fuels, including hydrogen, which will be key to meeting climate commitments. This includes:

  • £55 million Industrial Fuel Switching Competition. Funding will support the development and trials of solutions to switch industry from high to low carbon fuels such as natural gas to clean hydrogen, helping industry reach net zero by 2050
  • £40 million Red Diesel Replacement Competition. Providing grant funding for the development and demonstration of low carbon alternatives to diesel for the construction, quarrying and mining sectors, with the aim of decarbonising these industries reliant on red diesel, a fuel used mainly for off-road purposes such as in bulldozers. With red diesel responsible for the production of nearly 14 million tonnes of carbon each year, the investment supports the UK government’s budget announcement removing the entitlement to use red diesel and rebated biodiesel
  • £10 million Industrial Energy Efficiency Accelerator (IEEA). Offering funding to clean technology developers to work with industrial sites to install, test and prove solutions for reducing UK industry’s energy and resource consumption

This comes as the Transport Secretary unveils the winners of a £2.5 million R&D competition for hydrogen transport pilots in the Tees Valley area, which will lead to supermarkets, emergency services and delivery companies trialling hydrogen-powered transport to move goods and carry out local services.

Associate Director for the Carbon Trust Paul Huggins said:

The previous rounds of the Industrial Energy Efficiency Accelerator have seen over £8 million of funding awarded to 16 successful projects. The programme has been instrumental in securing the first industrial demonstration of a wide range of innovative technologies, with the future potential to deliver up to 10 million tonnes of cumulative carbon savings over 10 years.

Seeing these technologies working at scale on site will reduce the barriers to widespread industry adoption of energy saving technologies. We are delighted that BEIS has re-appointed the Carbon Trust and our partners, Jacobs and KTN, to deliver the next round of the IEEA and look forward to supporting the next wave of demonstration projects and further contributing to UK’s industry transition toward net zero.

Hydrogen can be made as safe as natural gas. As the hydrogen economy develops, all necessary assessments will be carried out and measures put in place to ensure that hydrogen is stored, distributed and used in a safe way.

The UK government is already working with the Health and Safety Executive and energy regulator Ofgem to support industry to conduct first-of-a-kind hydrogen heating trials. These trials along with the results of a wider research and development testing programme will inform a UK government decision in 2026 on the role of hydrogen in decarbonising heat. If a positive case is established, by 2035 hydrogen could be playing a significant role in heating people’s homes and businesses, powering cars, cookers, boilers and more – helping to slash carbon emissions from the UK’s heating system and tackle climate change.

Director of Policy at the Association for Renewable Energy and Clean Technology (REA) Frank Gordon said:

This Strategy provides welcome clarity. The REA urged the government to provide certainty for investors, deliver a technology neutral approach and highlight the range of low carbon pathways. The Hydrogen Strategy starts to answer those calls and offers a positive vision for the role of hydrogen in meeting the UK’s net zero ambitions.

Backed up by the Net Zero Hydrogen Fund, a revenue support scheme for hydrogen production and a standard methodology to define when hydrogen is low carbon, we believe this Strategy can provide a stimulus for British-based hydrogen production over the coming years.

Chief Executive of Energy UK Emma Pinchbeck said:

Hydrogen and CCUS are going to be incredibly valuable for sectors that will be difficult to decarbonise with electricity – and so we welcome that today’s Hydrogen Strategy takes an economy-wide approach to developing these innovative technologies. The UK has real potential for hydrogen and CCUS, both of which can deliver new skilled jobs, particularly in places where the UK already has a proud industrial and energy heritage.

Executive Director at the Aldersgate Group Nick Molho said:

We welcome the consultation on business models to make large-scale low carbon hydrogen production commercially viable and the commitment to develop a robust standard to ensure UK hydrogen production is consistent with the net zero target.

Low carbon hydrogen has a crucial role to play in cutting emissions in complex sectors of the economy, such as long-range road transport and heavy industry in both clustered and dispersed sites. The key to ramping up production and cutting the cost of low carbon hydrogen – including the scaling up of green electrolysis capacity – will be to combine meaningful demonstration projects in sectors such as steel and investment in skills, with rapid clarity on the market mechanisms industry can rely on to make a predictable return on investment.

The Hydrogen Strategy is one of a series of strategies the UK government is publishing ahead of the UN Climate Summit COP26 taking place in Glasgow this November. The UK government has already published its Industrial Decarbonisation Strategy, Transport Decarbonisation Strategy and North Sea Transition Deal, while its Heat and Buildings and Net Zero Strategies will be published this year.

Case studies

Across the UK innovative projects are already taking place, kickstarting Britain’s world-leading low carbon hydrogen economy. This includes:

  • In Scotland. The Acorn Hydrogen project located in St Fergus, Aberdeenshire, is taking advantage of existing oil and gas infrastructure to reform North Sea natural gas into low carbon hydrogen with the emissions created from generating the hydrogen, safely removed and stored through carbon capture, usage and storage. The project is being led by Storegga, with funding and support from industry partners including Harbour Energy, Shell, the UK and Scottish Governments and the European Union.
  • In Northern Ireland. The development of hydrogen-powered buses by Wrightbus in Belfast. The company has invested heavily into developing hydrogen fuel cell buses and has received over £8 million over the last four years from Government research and development funding for the automotive sector.
  • In Wales. In Port Talbot a project by Hanson Cement is demonstrating how hydrogen from renewable energy can help decarbonise cement manufacturing.
  • In England. As part of the BEIS-funded HyNet Industrial Fuel Switching Competition, Unilever alongside Progressive Energy are running a trial to switch an onsite natural gas-fired boiler to hydrogen. The boiler, located at Unilever’s Port Sunlight facility on the Wirral, raises steam used for the manufacture of home and personal care products.

A full list of ongoing hydrogen projects across the UK, as well as explainers about what hydrogen is and how it works is available. See the full list of documents published today:

Today’s Hydrogen Strategy package also contains further detail on different ways to produce hydrogen and our technical cost projections of each technology out to 2050, and an annex setting out the analysis and evidence underpinning the Hydrogen Strategy and consultations.

Through the safety workstream of the Hy4heat programme, the UK government has supported work to assess the safe use of hydrogen gas in certain types of domestic properties and buildings, as part of preparation for the first community trials using hydrogen as a heating source.

Further support the UK government is providing for hydrogen projects include:

1. £240 million Net Zero Hydrogen Fund to support new hydrogen production projects;

2. Hydrogen Business Model to stimulate private investment in new low carbon hydrogen projects;

3. Phase 2 of the £315 million Industrial Energy Transformation Fund to support industry to switch to low carbon fuels, including hydrogen;

4. Up to £60 million through the Low Carbon Hydrogen Supply 2 competition to support innovative hydrogen production, transport and storage technologies;

5. £68 million Longer Duration Energy Storage Demonstration competition;

6. World-leading trials of hydrogen for heating, including a hydrogen neighbourhood trial by 2023, hydrogen village trial by 2025 and potential pilot hydrogen town by the end of the decade;

7. Up to £183 million for transport decarbonisation, including trials and roll-outs of hydrogen technologies for buses, HGV lorries, shipping and aviation, including:

  • up to £120 million this year through the Zero Emission Bus Regional Areas (ZEBRA) scheme towards 4,000 new zero emission buses, either hydrogen or battery electric, and infrastructure needed to support them
  • up to £20 million this year to design trials for both electric road system and hydrogen long haul heavy road vehicles (HGVs) and to run a battery electric trial to establish the feasibility, deliverability, costs and benefits of each technology
  • up to £20 million this year for the Clean Maritime Demonstration Competition
  • up to £15 million this year for the ‘Green Fuels, Green Skies’ competition to support the production of first-of-a-kind sustainable aviation fuel plants in the UK
  • £3 million this year to support the development of a Hydrogen Transport Hub in Tees Valley, and £4.8 million (subject to business case) to support the development of a hydrogen hub in Holyhead, Wales

The £95 million UK government funding package and £10 million Industrial Energy Efficiency Accelerator (IEEA) comes from the £1 billion Net Zero Innovation Portfolio. See details of all 3 competitions, and how to register interest. As part of the £10 million IEEA, the government has awarded £1.7 million to the Carbon Trust to be the delivery partner for the programme.

Powersystems Hydrogen NewsWatch Update June 2021

Powersystems Hydrogen NewsWatch Update June 2021

The Powersystems Renewables NewsWatch provides a roundup of the latest headlines relating to Hydrogen

Earlier this year Powersystems reviewed Green Hydrogen as a renewable energy technology and some of the challenges the sector faces and that pressure has been building to make more of this gas and to use it to move energy in a form that can burn in power plants and steel mills, energize fuel-cell vehicles and generators, and combine with captured carbon dioxide to make liquid fuels or solid plastics.

The UK government’s “Ten Point Plan for a Green Industrial Revolution” was published in November 2020 stating the intention of publishing a hydrogen strategy in 2021. This also set a target of 40 GW of offshore wind generation capacity and 5 GW of low carbon hydrogen production by 2030, appearing to indicate an intention to play a leading role in European hydrogen development.

The State of the Hydrogen Nation Survey was launched this month by the Hydrogen Strategy Now group (campaign partners include; Vattenfall, Alexander Dennis, EDF, ITM Power, Orsted, Siemens, BOSCH and many more) to analyse the views of industry leaders on the progress and potential of the UK Hydrogen sector to date. The survey advises that the UK could miss out on millions in investments and tens of thousands of jobs in the next decade unless the Government raises its 5 GW Hydrogen target.

More than three-quarters of respondents to Hydrogen Strategy Now’s ‘State of the Hydrogen Nation’ survey said the 5 GW hydrogen production target set out in the PM’s Ten Point Plan is not ambitious enough. And almost half said the lack of a clear Hydrogen Strategy has seen the UK “miss out on valuable investments” into UK hydrogen projects, while 81% said the UK was failing to meet its hydrogen potential.

Around 60% of respondents said they were not confident that the Hydrogen Strategy would create a “world leading” hydrogen market, which the Government has set as its measurement of success. The survey also revealed that industry experts believe that Scotland is far ahead of the other devolved administrations when it comes to hydrogen ambitions.

Hydrogen is Point Two in the Prime Minister’s Ten Point Plan for a Green Industrial Revolution. It featured heavily in the Energy White Paper, and there are several major upcoming policy documents that are expected to include significant commitments on hydrogen – the Transport Decarbonisation Plan, the Heat and Buildings Strategy, and the Hydrogen Strategy itself.

The global hydrogen race

The global hydrogen race is gathering speed. The global hydrogen economy is estimated to be worth $2.5 trillion by 2050, supporting 30 million jobs. Other nations, such as Australia, Japan, South Korea, Canada, and China have already set ambitious strategies for growing their hydrogen economies.

Germany joined this list with their own €9 billion hydrogen strategy. Reported last week by the German National Hydrogen Council, it is estimated by the German Fraunhofer Gesellschaft that 80 terawatt hours (TWh) will be needed by 2030, and 400 to 800 TWh by 2050. The demand for Hydrogen will be even greater than previously assumed and reported.

The European Commission is also creating an EU hydrogen strategy, which includes plans for multi-billion-euro investment in hydrogen projects, and schemes to boost sales of hydrogen electric vehicles.

Last year, the EU and 15 other countries published hydrogen plans. At least $300bn is expected to be invested globally over the next decade by the public and private sectors, with some even projecting that hydrogen could meet almost a fifth of global energy demand. The potential reward is great. By strategically placing, in the PM’s words, a “big bet” on hydrogen now, the UK can create thousands of highly skilled green jobs, attract investment and unlock large scale export opportunities, increase energy security and position itself world leader in a future $2.5tr hydrogen economy. However, many other nations are also alert to this Net Zero and economic opportunity and are moving fast to position themselves at the front of the global hydrogen race

Next Steps

The race to lead this industry has started, evidenced by the billions being invested into hydrogen by Governments across the world. As Baroness Brown, vice chair of the Committee on Climate Change, stated at the launch of the Hydrogen Strategy Now campaign, “the UK missed the boat on wind technology and missed the boat on batteries. We can ‘t afford to miss the boat on hydrogen”.

Britain can win the race for hydrogen supremacy if it faces down competition from Japan

Japan has made an unprecedented commitment to hydrogen power as an alternative energy source, investing US$19.2 billion in the technology in new funding alone. As first out of the starting blocks, Japan has staked its claim as the world leader in the industry. We are at a critical juncture, however, and there is a golden window of opportunity for the UK to become a serious hydrogen player.

The hydrogen strategy in Japan is bold and far-reaching. So, how can the UK match Japan’s efforts and become the pre-eminent hydrogen world power? There are a host of simple policies which must be implemented as soon as possible in order to steal a march on the competition.

First of all, we need mechanisms to incentivise hydrogen vehicles, along with a similar incentive for each kilogram of hydrogen sold. This can be quickly achieved through the liberalisation of the Renewable Transport Fuel Obligation, which has recently gone out for public consultation. Looking further, we hope the hydrogen strategy will enable the development of a more refined scheme, such as potentially contracts for difference.

The government must throw its support behind hydrogen trains, as being achieved currently in the EU (we reported in last month’s NewsWatch with the very first orders for dual powered hydrogen-electric trains in France ) and back the mass deployment of hydrogen buses, again it was announced this week that London is the first city in England to put hydrogen-powered double-decker buses on the streets after a new fleet was launched this week. Transport for London (TfL) yesterday added 20 zero-emission hydrogen fuel cell buses to the 500 electric buses already in service in London, hopefully this will kick-start investment in UK-made buses as well as stimulate hydrogen production.

The hydrogen-power construction of the nuclear power station, Sizewell C should be a blueprint for the future of construction, one of the most emissions-heavy industries in the UK. All of these policies have the ability to accelerate progress to net zero, stimulate private investment and create jobs across the United Kingdom, with minimal taxpayer spend.

Hydrogen electric vehicles – Pros and Cons

Hopium unveils its hydrogen-powered sedan prototype and opens the first 1000 pre-orders

Hopium the new French manufacturer of hydrogen powered sedans, unveils its very first rolling prototype during the ‘Viva Technology’ week in Paris. This high-end vehicle, aims to be the first French-powered sedan to hit the market in 2026. The Machina prototype will be equipped with a 700-bar Type IV vessel made by Plastic Omnium in its Herenatls plant (Belgium).

Announced in October 2020 and produced in record time in the Linas-Montlhéry test workshop, this vehicle called Alpha 0, certifies the reliability of the fuel cell system. After the design and architecture phases, followed by the implementation of the various components within the vehicle, the prototype was able to be evaluated and perfected through bench and track tests. With a speed of 200 km/h (124 mph), this test version already borders on the performance promised by the Hopium Machina in its final form. Alpha 0 also introduces for the first time the signature lighting, emblem of Hopium, whose shape is reminiscent of the stratification of hydrogen and the movement of waves on the surface of water. The Hopium teams are already fully committed in carrying out the next steps, aiming to produce Hopium Machina on an industrial scale, with a new rendez-vous expected in the first quarter of 2022.

The Inherent problem with Hydrogen Cars

According to European non-governmental organisation Transport & Environment, for every 100kWh of renewable electricity, you get 77kWh of useable energy from a battery EV (BEV), but only 30kWh in a hydrogen-powered fuel-cell electric vehicle (FCEV). A green-hydrogen-powered EV therefore requires more than two-and-a-half times the amount of electricity as a BEV.

One of the arguments in favour of FCEVs is that they can be filled up like petrol or diesel vehicles, eliminating the range anxiety associated with EVs — presuming that H2 fuelling will be widely available. It is also argued that they will be easier than BEVs for drivers who do not have easy access to a charging point, such as those who live in apartments or do not have a driveway.

But as Volkswagen recently pointed out, while explaining its decision to focus on BEVs, FCEVs will always be a more expensive option, and their perceived advantages will soon be undermined. “With the battery-powered e-car, driving remains affordable. Current e-models are already at the price level of comparable combustion engine models. “In contrast, the hydrogen car will always remain more expensive than the battery car – due to the complex technology and high fuel costs. Drivers already pay around €9-12 per 100km for a hydrogen car, while battery cars cost only €2-7 per 100km (depending on electricity prices in individual countries). And the topic of long-distance travel? That will soon no longer play a role. With the new generation of e-cars, ranges will increase to 400km to 600km, while charging will become increasingly faster.”

Blow to clean hydrogen sector as major truck maker rules out H2 for long distance transport

Volkswagen-owned Scania, which has produced both battery- and hydrogen-powered vehicles, has concluded that H2 will be too inefficient and expensive for long-distance transport. “Scania has invested in hydrogen technologies and is currently the only heavy-duty vehicle manufacturer with vehicles in operations with customers. However, going forward the use of hydrogen for such applications will be limited since three times as much renewable electricity is needed to power a hydrogen truck compared to a battery electric truck. A great deal of energy is namely lost in the production, distribution, and conversion back to electricity,” the Swedish manufacturer said in a statement. Scania’s aim is to be the leader in the shift towards a sustainable transport system. Battery electric vehicles will be the main tool to drive this shift and to enable decarbonised transport solutions with better transport economy to customers.”

China to spend billions on hydrogen vehicles despite a minimal supply of clean H2

Concerns have been raised in China that an investment boom in technology and infrastructure to support hydrogen-powered vehicles risks being undermined because of insufficient supplies of clean H2. Incentivised by government subsidies, 35 projects related to fuel cells, fuel-cell vehicles and hydrogen refuelling stations worth a combined 110bn yuan ($17bn) have been signed in China in the first five months of 2021. Most of these plans have involved investment in the development of hydrogen fuel cell vehicles and refilling stations, which can be built a lot more cheaply and faster than large-scale hydrogen production projects. However, few have thought about where the Hydrogen supply will come from. Read more here

Embryonic markets and rapid growth of key technologies

Wind could produce affordable green hydrogen by 2030

Wind power could make it possible to produce hydrogen without emitting greenhouse gases as cheaply as is currently feasible with fossil fuel energy by 2030, turbine maker Siemens Gamesa (SGREN.MC) said in a white paper released on June 9. Using onshore wind turbines to power electrolysers that extract hydrogen from water could become as cheap as making it using fossil fuels by 2030, and offshore wind could get there by 2035, Siemens Gamesa said. It also said it would only be possible to bring down the cost of green hydrogen and boost production if government and industry speed up building renewable capacity, developing a supply chain and supporting infrastructure. “We can’t underestimate the challenge of producing green hydrogen at the scale needed to deliver on the 2050 net zero targets,” it said. Electrolysers and battery storage can be added to existing wind farms, and sites near places that demand hydrogen can also start to produce it, the company said. Siemens Gamesa, which dominates the global market for offshore wind turbines, said it is speeding up work on a prototype system to produce hydrogen powered by offshore wind in the next five years. read more

Europe on track for 2.7GW of hydrogen electrolyser capacity by 2025

The total announced project capacity within the European hydrogen electrolyser market would take the green hydrogen sector to 2.7 GW by 2025 – a nearly 50-fold increase on capacity built over the last ten years. This is according to research conducted by Delta-EE’s new Global Hydrogen Intelligence Service, the study indicates that over the past decade, project activity around clean hydrogen has been growing quickly, with 67 operational projects including electrolysers, offering a total capacity of 56MW, developed across 13 different countries. These projects produce an estimated 4,700 tonnes of green hydrogen per year, with approximately half of this consumed by the transport industry and approximately one third used for decarbonising industrial applications, such as petrochemical refining.

The study found that currently nearly half of all European electrolyser capacity is in Germany, while no other country has more than 10MW installed. However, the sector is expanding fast; the first major projects in several countries (e.g. Spain, Netherlands, Denmark) will be at the 10s of MW scale in 2021/22 and will soar towards the 100s MW by 2025. A key factor in this growth will be the increase in manufacturing capacity of electrolyser manufacturers.

Light hearted updates on Hydrogen

For the first time, the Eiffel Tower in Paris has been lit up by electricity produced from certified renewable hydrogen.

The hydrogen, supplied by Air Liquide, lit up the Tower for a laser show during the Paris de l’hydrogène event organised by Energy Observer. The event is showcasing the potential role of hydrogen in France’s green recovery, as well as raising awareness of the energy transition in general.

I’m lovin it: McDonald’s Switzerland ships its Big Mac ingredients in a green hydrogen truck

McDonald’s Big Mac and hydrogen; probably not two things you were expecting to read in a sentence today. But ingredients for the famous hamburger and other products were shipped to a McDonald’s restaurant in Switzerland in a green hydrogen truck last month. Logistics company Havi said it transported the goods from its centre in Oensingen, Solothurn to the McDonald’s site in Crissier, Vaud – and it called the journey a world first. Boasting a range of 400km, this hydrogen truck runs quietly as well as emission-free; refuelling with green hydrogen created using renewable energies takes just 10 minutes.

 

Read more about building the clean electrification at the heart of the global decarbonisation strategy, the UK’s first Hydrogen town and New Hydrogen Collaborations and Pathways in Aprils’ Hydrogen review.

Read more about Net Zero by 2050, the European Clean Hydrogen Alliance, Five T a private hydrogen infrastructure fund as well as Hydrogen trains, planes and automobiles in May’s Hydrogen review

 

 

 

 

 

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