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US demand for hydrogen may quadruple by 2050: NREL

16 November 2020 Keiron Greenhalgh

Demand for hydrogen in the US could reach as much as 41 million mt/year by 2050, a four-fold increase compared with the present, according to a recent National Renewable Energy Laboratory (NREL) report.

That forecast eyes green hydrogen riding the recent wave of enthusiasm for the technology, with the prognostication based on assumptions related to research and development-driven reductions in the cost of low-temperature electrolysis (LTE) and financial incentives for LTE. Green hydrogen is produced via electrolysis from renewable or other zero-emissions power sources.

Such a situation would, according to NREL estimates, reduce US petroleum use by 15%, whereby 12 million mt/year of hydrogen would fuel 18% of cars and 26% of light-duty trucks, with a further 5 million mt/year fueling 22% of the medium- and heavy-duty vehicle fleet.

In addition, LTE could boost renewable power generation deployment and utilization, according to the study.

"When LTE contributes to hydrogen production in our scenarios, the capacity of renewable energy generation technologies increases because of additional demand for [low-cost, dispatch-constrained electricity or LCE]. In addition, utilization of renewable electricity generators increases, because generation that exceeds the non-LTE load would be curtailed without the LTE," it said.

The NREL reference scenario, meanwhile, has a US hydrogen market size of 22 million mt/year. That forecast is based on the current status of hydrogen technologies and expected hydrogen demand growth across all sectors. It is based on US Energy Information Administration natural gas prices and electrolysis costs and all of the production being "grey hydrogen" via steam methane reformation.

However, the report estimates a "serviceable" demand total of 106 million mt/year across nine applications by the middle of the 21st century, about 11 times larger than 2015 US on-purpose hydrogen production of 10 million mt/year of hydrogen, which was used primarily for oil refining and ammonia production.

The hydrogen demand for those two applications is expected to grow, owing to the need to refine heavier crude oils and increased demand for fertilizer.

According to the analysis, almost half of the potential market would be for industrial processes, including synthetic hydrocarbon production (14 million mt/year), metals refining (12 million mt/year), oil refining (7 million mt/year), ammonia production (4 million mt/year) and biofuels production (9 million mt/year).

Fuel cell electric vehicles would account for over a quarter of the serviceable consumption at 29 million mt/year.

The remainder would be used to support other energy systems in the form of seasonal electricity storage (15 million mt/year) and injection into the natural gas system (16 million mt/year).

All the expected demand could be produced from only 15% of the annual technical potential of electricity from combined US onshore and offshore wind resources, assuming other domestic uses of wind resource continued at 2017 level, NREL said.

The report admits there could be other uses too - and therefore further upside. NREL said analysis showed that if drivers outside the scope of the study increased demand for non-petroleum fuel, hydrogen injection into the gas system and seasonal electricity storage, the market size in the LCE scenario could more than double to 94 million mt/year.

The NREL report was commissioned as part of "H2@Scale," a US Department of Energy initiative led by the Office of Energy Efficiency and Renewable Energy's Hydrogen and Fuel Technologies Office.

Call to arms

The same day the report came out, 8 October - designated "National Hydrogen and Fuel Cell Day" - a coalition of major US and multi-national companies issued a call to arms to politicians and other executives to embrace the use of hydrogen and the possibilities for the US in the sector.

"The US is uniquely positioned to build a world-leading hydrogen economy," according to the coalition. "The US has the abundant, low-cost primary energy sources needed to produce low-carbon hydrogen. For electrolytic hydrogen, the country has ample renewable and low-carbon electricity resources, including wind, solar, hydropower, and nuclear."

The companies laid out how and why they believe demand will grow and what the US has to lose if it fails to engage the spirit of American enterprise and can-do attitude politicians - especially those stumping for votes - are apt to cite.

It also touts the sector's prospects for the creation of well-paid jobs, a particularly attractive pitch after the spike in unemployment in recent months due to the coronavirus pandemic

Hydrogen could help meet 14% of US energy demand by 2050, the equivalent of more than 2,468 TWh or 8.4 billion MMBtu per year, according to the roadmap, which was co-ordinated by the Fuel Cell & Hydrogen Energy Association.

"Today, the hydrogen industry as well as the US are at a crossroads as the country's energy future is determined," the coalition said. "Companies are grappling with decarbonization, preservation of natural resources, aging infrastructure, energy storage, an evolving regulatory landscape and new customer demands. The resiliency and reliability of our energy system are growing concerns.

"A vibrant hydrogen industry would maintain US energy leadership and security, create jobs, significantly reduce carbon emissions and support economic growth," it said. "The time to boost support for hydrogen is now. Decisions and investments made now will have long-term impact. Moreover, many energy infrastructure decisions take a long time to implement.

"Investment is needed to lay the groundwork for hydrogen solutions. Capital is required to build foundational hydrogen infrastructure and companies need the right incentives to invest in low-carbon hydrogen solutions. Regulatory barriers and appropriate codes and standards need to be addressed to enable large-scale commercialization and a robust, reliable supply chain," according to the coalition.

By 2030, the hydrogen economy in the US could generate an estimated $140 billion/year in revenue and support 700,000 total jobs across the hydrogen value chain, it said, citing US Department of Energy data. By 2050, it could drive growth by generating about $750 billion/year in revenue and a cumulative 3.4 million jobs, it added.

The coalition even foresees hydrogen enabling a "competitive nuclear industry," it said, at a time when plants have been shutting in numbers unprecedented since the first commercial power reactors were built - largely as a result of low electricity prices.

Hydrogen would also enable smoother integration of low-carbon power resources, according to the study. "Grid-connected electrolyzers that produce hydrogen could provide a significant source of flexibility for intermittent renewables, providing long-duration storage solutions that are complementary to short-duration battery solutions," it said, adding "they can provide additional load for low-carbon power sources like renewable and nuclear power."

Posted 16 November 2020 by Keiron Greenhalgh, Editor, Climate & Sustainability Group, IHS Markit

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