Hydrogen: The missing piece to reach net zero emission targets
Climatetech conference session - Green fuels


The element with atomic number one has also been a number one topic for a few years now. Ambitious hydrogen targets from governments, as well as the EU decarbonization plans, encourage investors, especially from oil and gas industry, to search for possible projects and to set themselves targets in this upcoming market. On the one hand, hydrogen can help utilize existing infrastructure, such as pipelines and gas fields, while on the other hand it can help to support the decarbonization of end uses where direct electrification is not an option.

When analyzing green commodities trading, in the light of net zero decarbonization targets, future hydrogen and power markets with high renewable shares will be key. An often-overlooked aspect of hydrogen is how strongly these two markets are linked, and the important role that hydrogen will play in future power systems.

In our base scenarios we expect about 1,400TWh hydrogen demand in Europe, including the UK, Switzerland, and Norway. The results show that the predominant share of that hydrogen will be produced by electrolysis to 2050. This electrolysis represents 844 TWh of additional, and more importantly flexible, demand for the EU power system. The remaining hydrogen will be sourced from methane reformation with carbon capture, or imported from multiple locations worldwide. In our analysis we demonstrate the strong impact of hydrogen on the profitability of other technologies such as solar PV, wind and gas or hydrogen turbines.

The flexibility means that electrolysis enters a symbiosis with variable renewable energy sources and strongly increases their profitability. We forecast that 350 GW of electrolysis capacity enables more than 370GW of additional solar PV and wind capacities.

Furthermore, hydrogen turbines also have a critical role to play to ensure resiliency in the power system, as one of the few fully dispatchable zero carbon power technologies. Our integrated power-hydrogen-carbon model allows us to understand the impact on every single hour from today through to 2050.

We will include key highlights of our analysis such as the improved price setting in the merit order due to electrolysis demand side flexibility, but also hydrogen and power price forecasts to 2050, and the interaction with the carbon emission trading scheme in Europe. Useful conclusions from the European case can be made and applied on markets around the globe. 

Speaker/ Author

Sebastian Braun
Sebastian Braun

Head of Quant Power and Hydrogen Analytics

ICIS - Independent Commodity Intelligence Services

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