IRENA Power To Hydrogen Innovation 2019
IRENA Power To Hydrogen Innovation 2019
IRENA Power To Hydrogen Innovation 2019
POWER-TO-HYDROGEN
INNOVATION LANDSCAPE BRIEF
© IRENA 2019
Unless otherwise stated, material in this publication may be freely used, shared, copied, reproduced, printed
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ISBN 978-92-9260-145-4
Citation: IRENA (2019), Innovation landscape brief: Renewable Power-to-Hydrogen, International Renewable
Energy Agency, Abu Dhabi.
ACKNOWLEDGEMENTS
This report was prepared by the Innovation team at IRENA with text authored by Francisco Boshell and Arina Anisie,
with additional contributions and support from Santosh Kamath, Harsh Kanani and Rajesh Singla (KPMG India).
Valuable external review was provided by Bart Biebuyck (Fuel Cells and Hydrogen Joint Undertaking – FCH JU),
Tim Karlsson (International Partnership for Hydrogen and Fuel Cells in the Economy – IPHE), Jesper Kansbod
(Hybrit), Serge Fossati (Viking Cruises), Marcus Newborough (ITM Power), Yasuhiro Hattori (Energy Agency
Fukushima), Wouter Vanhoudt and Thomas Winkel (Hinicio), along with Raul Miranda, Elena Ocenic,
Nina Litman-Roventa and Paul Komor (IRENA).
DISCLAIMER
This publication and the material herein are provided “as is”. All reasonable precautions have been taken by IRENA to verify
the reliability of the material in this publication. However, neither IRENA nor any of its officials, agents, data or other third-
party content providers provides a warranty of any kind, either expressed or implied, and they accept no responsibility or
liability for any consequence of use of the publication or material herein.
The information contained herein does not necessarily represent the views of all Members of IRENA. The mention of
specific companies or certain projects or products does not imply that they are endorsed or recommended by IRENA in
preference to others of a similar nature that are not mentioned. The designations employed and the presentation of material
herein do not imply the expression of any opinion on the part of IRENA concerning the legal status of any region, country,
territory, city or area or of its authorities, or concerning the delimitation of frontiers or boundaries.
This document does not represent the official position of IRENA on any particular topic. Rather, it is intended as a contribution
to technical discussions on the promotion of renewable energy.
www.irena.org
1 BENEFITS
Converting variable renewable energy (VRE) sources to hydrogen via electrolysis can contribute to power
sector transformation in several ways:
Reducing VRE curtailment
WHAT IS POWER-TO-HYDROGEN ?
Hydrogen can be produced by electrolysis, a process that uses electricity to
split water into hydrogen and oxygen. When renewable power is used for this process,
hydrogen becomes a complementary carrier of renewable energy.
RENEWABLE POWER-TO-HYDROGEN
Hydrogen produced with excess solar PV and wind power can be stored for later use – as a
fuel for transport, industry and other sectors. Hydrogen production can be used as a ‘smart’
3
load to increase power system flexibility and help to decarbonise the overall economy.
I N N OVAT I O N L A N DS C A P E B R I E F
INNOVATION DIMENSIONS
11 Flexibility in conventional
power plants
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I. DESCRIPTION
Figure 1: Growth in hydrogen production with renewable electricity in Paris Agreement-aligned scenario
H H H
3 EJ 8 EJ 19 EJ
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Type of electrolyser
An electrolyser is a device that splits water into as a source of feedstock for industry (Figure 2).
hydrogen and oxygen using electricity. When An important distinction between hydrogen and
electricity produced from renewable energy other forms of energy storage is that hydrogen
sources is used in this process, the hydrogen can be stored and transported through the
becomes a carrier of renewable energy, existing natural gas network. Little investment
complementary to electricity. As described is needed to adapt natural gas infrastructure to
in Table 1, there are three main types of transport hydrogen. Blending hydrogen with other
electrolyser: an alkaline electrolyser; a proton gases means that pure hydrogen is no longer
exchange membrane (PEM) electrolyser; and a available for direct use in different applications,
solid oxide electrolyser (SOE). e.g. fuel cell vehicles. Extracting pure hydrogen
from blended gas is possible, but it is expensive
Hydrogen produced during the process of and complicated, so there is an economic trade-
electrolysis can be used as a medium for energy off to be made between the various hydrogen
storage and for applications such as producing applications.
heat for buildings, refuelling fuel cell vehicles and
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I N N OVAT I O N L A N DS C A P E B R I E F
ELECTRICITY
Aviation
Heavy-duty
POWER BUILDINGS
1 The US National Fire Protection Association gives hydrogen a 4, the highest flammability rating, denoting materials “that completely vaporise at normal
pressure and temperature and burn readily”.
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curtailment and thereby improves the return on At times that renewable energy cannot be fed
investment for VRE asset owners. into the power grid due to network constraints or
low demand, it could be supplied to electrolysers
Electrolysis can also enhance the reliability of for production of hydrogen via electrolysis.
power supply by providing flexibility services Procuring excess renewable energy (that is likely
when needed. With increasing penetration to be curtailed or sold at near zero marginal
of VRE resources such as solar PV and wind, prices) can significantly help improve the
large-scale storage solutions and grid stability economics of hydrogen production. Offtake of
management are becoming critical issues in excess renewable energy also enables VRE asset
system operation. owners to gain incremental revenues and reduces
their exposure to volatility in power prices.
Electrolysers can help integrate VRE into power
systems, as their electricity consumption can This option, however, requires great availability
be adjusted to follow wind and solar PV power of renewable power (especially at relatively
generation, where hydrogen becomes a medium low cost) to ensure a good load factor at the
of storage for renewable electricity. electrolysis facility. Low load factors yield a
high levelized cost of hydrogen (LCOH), as the
Thus, electrolysers offer a flexible load and can CAPEX of the electrolyser, a key component of
also provide grid balancing services (upwards and the hydrogen cost, needs to be allocated to low
downwards frequency regulation). The hydrogen production volumes (IRENA, 2018a). Figure 3
produced can be further used in the industrial showcases different LCOH at current technology
and transport sectors and as a fuel, or it can be cost levels and in 2025 for an Alkaline electrolyser
stored and then converted back into electricity. connected to the Danish grid.
Moreover, stored hydrogen may enable the
efficient distribution of energy across regions, In Spain, for example, demonstration projects
facilitating VRE consumption in areas where VRE are using hydrogen for the municipal bus fleet on
generation is difficult or direct electrification of islands, which is cost-efficient thanks to cheap
an end-use energy application. electricity from solar PV combined with grants
for the buses, translating into breakeven costs
with the conventional buses (today already). In
Sweden, hydrogen is used to decarbonise the
steel industry with the goal of decarbonising
the industry by 2035. By 2030, it is estimated
that the share of VRE curtailment will be around
10–30% in Sweden, which provides more
incentives for renewable hydrogen 2.
2 Based on discussions during the IRENA Online workshop: Identifying challenges for achieving 100% renewable power systems by mid-century, June 2019.
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Figure 3: Levelised cost of hydrogen (LCOH) produced via alkaline electrolyser in Denmark
12.0
LCOH (USD/kg)
10.0
8.0
6.0
4.0
2.0
0 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
LOAD FACTOR
Providing long-term energy storage Council, 2017a). P2H₂ can therefore potentially
assist in shifting the supply of renewable energy
While intraday imbalances caused by VRE from seasons with low demand to seasons with
generation might be better managed with batteries high demand.
in economic terms, seasonal variations need long-
term storage solutions such as P2H₂ (Eichman and Currently, storing power in the form of hydrogen
Flores-Espino, 2016). Hydrogen can serve as a is not financially viable 3. Given that a main
long-term storage medium, with the capability of advantage of VRE-based hydrogen is that it
storing energy for several months. Table 2 below reduces carbon dioxide (CO₂) emissions, policy
provides a comparison of various energy storage measures that account for the cost of CO₂
technologies and their storage capability. emissions would improve the economic case for
hydrogen storage and its subsequent use for
Long-term storage options can help countries power generation. The economics are expected
with significant seasonal differences between to improve due to technological development.
power demand and renewable power generation For example, the Hydrogen Council expects the
to integrate more renewable power into the cost of power storage in the form of hydrogen
grid. For example, Germany’s energy demand is to fall to EUR 140 per megawatt hour (MWh) by
30% higher in winter than in summer. However, 2030 4, which is lower than the projected cost for
renewable energy sources generate around 50% pumped hydro storage (about EUR 400 per MWh)
less power in winter than in summer (Hydrogen (Hydrogen Council, 2017a).
3 Currently, the cost of emissions is generally not included while analysing the financial viability of any project. One of the methods to improve
the technology’s financial viability is to price in the emissions, while encouraging hydrogen storage for power generation and discouraging conventional
power generation.
4 The cost quoted is for power-to-hydrogen-to-power.
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Table 2 Comparison of various energy storage technologies and their storage capability
Note: GW = gigawatt; h = hour; min = minute; MW = megawatt; R&D = research and demonstration;
RD&D = research, development and demonstration.
Source: Adapted from California Hydrogen Council, 2015; NREL, 2014; IEA, 2014
Providing grid balancing services alkaline and PEM electrolyser technologies differs
when used to provide specific grid services. In
Frequent fluctuations in power generation general, alkaline electrolysers offer less flexibility
from variable sources call for rapid-response as compared to PEM electrolysers, as shown in
balancing options. The electrolyser systems used Table 3 below. Alkaline electrolysers are unlikely
to produce hydrogen can be cycled up and down to offer grid services with an activation time
rapidly as a flexible load, providing grid services of less than 30 seconds (Tractebel, ENGIE and
such as frequency regulation. The performance of Hinicio, 2017).
Note: The ramp-up and ramp-down figures are percentage of nominal load.
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I N N OVAT I O N L A N DS C A P E B R I E F
Experimental analysis done by the US National A load simulator was used to generate harmonics
Renewable Energy Laboratory (NREL) on the grid (green line on Figure 4), which
demonstrates the use of electrolyser technology reduces the frequency below the lower limit
for utility-scale grid stabilisation services. The of 59.8 Hz. A control signal is generated when
experiment shows that electrolysers can rapidly the frequency reaches a defined point, and
change their load point in response to grid needs that signal is transmitted to the electrolysers
and at the same time accelerate recovery in case to reduce power consumption. The red and
of frequency deviation (Gardiner, 2014). Figure 4 blue lines in the graph show the response of
shows the result of the experiment conducted to the electrolysers (by reducing their power
maintain the frequency of the system at 60 Hz. consumption) once the frequency deviates by
0.2 Hz. The time taken for such response was
less than a second.
60.4
60.2
60.0
59.8
FREQUENCY(Hz)
59.6
Faster Recovery
59.4
59.2
Trigger at 0.2 Hz deviation
59.0
58.8
58.6
58.4
0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0
TIME (seconds)
Note: Hz = hertz.
Source: Gardiner, 2014
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Supporting sector coupling strategies Hydrogen can be transported using a gas pipeline
by increasing the use of renewable network or vessels. Transporting renewable power
power in other sectors in the form of hydrogen over long distances
could be an economically attractive option in
Hydrogen can be used to couple renewable the long term, especially in those cases where
electricity with other energy use sectors as the electricity grid has insufficient capacity or
depicted in Figure 2. Some of the applications of where building new infrastructure would be too
hydrogen are listed below. impractical or expensive. This might be the case
for offshore wind generation, where hydrogen
• As feedstock: Hydrogen can be used as could be produced offshore and then transported
feedstock in the chemical industry. It is a key to the shore via natural gas pipelines, either
input to the production of ammonia, synthetic converting existing offshore pipelines or using
fuels and various types of fertiliser. It can also newly installed pipelines where the costs are
be used in the methanation process to produce lower than laying submarine cables.
methane from CO₂. Hydrogen is also used to
produce synthetic liquid fuels from biomass, Also, regions with abundant and cheap renewable
which increases the efficiency of biomass energy sources but not enough demand could
utilisation significantly. Hydrogen can also be produce hydrogen to be transported to regions with
used to replace fossil fuels and act as a reducing limited renewable generation but high demand.
agent in heavy industries such as steel. In Transport of renewable energy via hydrogen could
Sweden, for instance, the HYBRIT project aims be developed at different scales, from local to
to replace coking coal with hydrogen in the ore- international. The latter option is being investigated
based steelmaking process.5 in several countries that either have abundant
renewable energy potential (e.g. Australia) or
• As fuel: Hydrogen can be directly used as limited indigenous renewable energy potential,
a fuel in the transport sector or to provide such as Japan (IRENA, 2018a). Several pilots are
power using fuel cells. For example, Europe being conducted to find out the most cost-effective
hosts 95 hydrogen stations where a fuel cell or economical way to transport hydrogen over long
can be refuelled in three minutes for a range distances. One example is the Hydrogen Energy
of 500–800 kilometres (H₂ live, 2019). Another Supply Chain (HESC) pilot project being undertaken
way to use hydrogen as a fuel is to blend it with in Japan (Hydrogen Strategy Group, 2018).
natural gas in the existing natural gas pipelines.
Standards suggest blending up to 10% hydrogen Also, harnessing the high potential of solar energy
(by volume),6 with a potential to increase it to in equatorial countries, storing it in the form of
20% (Hydrogen Strategy Group, 2018) (NREL, hydrogen, and transporting it to regions with
2015) (IRENA, 2018a). However, the appropriate high energy demand, such as Europe,7 might be
blend may vary significantly between pipeline economical (Hydrogen Council, 2017a).
network systems and natural gas compositions
and must therefore be assessed on a case-by- Micro-grids and fuel cell applications
case basis (NREL, 2013; ARENA, 2018). The
current limit on hydrogen in gas turbines and Due to their modularity, fuel cells typically are
engines is 1–2%, which can be increased to 10– employed in decentralised applications, offering
15% with minor retrofitting (Maroufmashat and electricity grid support and black start capability
Fowler, 2017). for micro-grids (Steinberger-Wilckens et al., 2017;
Gardiner, 2014). In Japan, residential fuel cell
Enabling distribution of renewable systems are deployed to provide consumer grid
power across regions and globally independence. The government of Japan aims to
install 1.4 million residential co-generation fuel
Transporting energy in the form of hydrogen cell systems by 2020, and 5.3 million by 2030.
can allow renewable energy to be supplied to Currently, more than 220 000 residential fuel cells
regions with scarce renewable energy resources systems are installed in Japan (Bloomberg New
(Hydrogen Council, 2017a). Energy Finance, 2017; FCHEA, 2019).
5 The HYBRIT project is a joint venture of SSAB, LKAB and Vattenfall established in 2016. The project aims to drastically change the steelmaking process
with a goal to provide fossil-free steel by 2035.
6 For most infrastructure components (IRENA, 2018a).
7 Analysis by the Hydrogen Council assumes that renewable energy is harnessed at the highest potential of solar energy in equatorial countries and
transported to regions with high energy demand in the form of hydrogen. The report also assumes that the cost of solar power in the Netherlands is double
the production cost of solar in the sunbelt regions.
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Reducing production costs and IRENA analysis shows that by 2050 hydrogen
improving revenue-stream has the potential to supply nearly 29 EJ of global
opportunities energy demand, two-thirds of which would come
from renewable sources (Figure 5).
Electrolysers have been long used in several
industries. They are regarded as a “mature” In the industrial sector, 14 EJ of renewable
technology for industrial applications. However, hydrogen would be consumed in 2050, largely
their potential in energy applications is still in the iron and steel subsectors, and also for
evolving (FCH JU, 2014). P2H₂ requires ammonia production.
performance improvement and cost reduction,
accompanied by unlocking and monetising the In the transport sector, hydrogen can be used
value streams from the use of the electrolysers in fuel cell electric vehicles (FCEVs), mostly
and the hydrogen. for heavier freight transport but also for some
passenger transport. The transport sector would
A market for hydrogen needs to be established for be the second largest user of renewable hydrogen
P2H₂ to be deployed successfully. As discussed, (after the industry sector) at around 4 EJ per year
hydrogen can be used across many different by 2050.
sectors: transport, power sector, industrial
feedstock, and producing heat for residential as
well as industrial purposes.
19EJ/YR
TOTAL RENEWABLE HYDROGEN SUPPLY
10 Fossil-based
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In the buildings sector, hydrogen can be blended Hinicio, 2017). Electricity costs alone constitute a
with natural gas or combined to produce synthetic major part of the total cost of producing hydrogen
methane and injected in gas grids. The gas grid from electrolysis. Electricity’s contribution to the
in this scenario would function as an existing overall cost of hydrogen depends on the cost of
large-scale storage asset, accommodating electricity itself, the size of the installation, load
and distributing low cost renewable electricity hours and the location of the electrolyser. While
(IRENA, 2019b). the cost of electricity is on average 30% of the
total cost of producing hydrogen, in some cases
Upfront capital costs can be substantial in setting it may be as high as 60% (Ainscough, Peterson
up hydrogen infrastructure such as electrolysers, and Miller, 2014). The levelised cost of hydrogen
transport infrastructure and storage. These costs, (LCOH) (USD/ KgH₂) is directly proportional to
coupled with high tariffs for electricity (procured electrolyser load factors. The higher the load
from utilities, VRE generators or the wholesale factor, the lower would be the share if fixed cost
market), make hydrogen even more expensive and the higher is the share of electricity cost in the
to produce through electrolysis. Technology and LCOH. Therefore, lower electricity costs enhance
infrastructure costs must therefore be continually the cost effectiveness of electrolytic hydrogen,
reduced, while existing regulatory and market for example by using excess renewable power
frameworks must be adjusted or redesigned to that is expected to be curtailed or by placing
accommodate the potential of P2H₂. hydrogen electrolysis plants in locations with very
low renewable electricity costs.
The cost of producing hydrogen from electrolysis is
currently in the range of EUR 2.4–6.7 per kilogram IRENA analysis shows that hydrogen produced from
(kg) depending on geography and various electricity can be competitive if the price of electricity
operating parameters, compared to EUR 1.3–3.0 falls to below USD 30/MWh or if electrolyser costs
per kg via SMR process (Tractebel, ENGIE and decline significantly (IRENA, 2019b).
2.5
2.3
Cost of production hydrogen
2.1
with fossil fuel technologies
2.0
without emitting CO2
(for instance using CCS),
1.5 considering a fuel cost
1.3
from 1.9 to 5.7 USD/GJ
1.0
0.5
0
20 40
Note: the analysis considers electrolyser running full load hours per year
Source: IRENA, 2019b
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14.0
PRODUCTION AND DELIVERY COST ($/KG)
6.0
4.0
2.0
10.8 9.7 9.2 9.0
0
Baseload Flexible On-site Example Spinning
operation operation renewables + DR program reserve
LCFS provision
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8 Chile and Australia aim to convert excess solar power into hydrogen, while Uruguay and Argentina aim to convert excess wind power into hydrogen.
9 For some countries pilots may still be needed, but given the number of pilots and demonstrations that have been done, some jurisdictions are looking at
going from the pilot/demonstration stage to commercial-scale projects. The Northern Netherlands is looking to put in 100–1 000 MW of renewable energy
sources to generate hydrogen for industry and transport applications while replacing the use of natural gas. Japan is building a port facility to import
liquefied hydrogen from Australia derived from brown coal, and from Brunei, for transport and energy uses.
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Figure 8: Key challenges and overview of possible enabling measures for power-to-hydrogen
TRANSPORT
• Initial high costs and low
volume
Electricity prices • Investment and technology
risk perception
• Nedd for dedicated refuelling
infrastructure (HRS)
KEY CHALLENGES
INDUSTRY
• High green hydrogen price
vs. fossil-based hydrogen
• Hydrogen for high
temperature heat
TRANSPORT
• Market pull regulations
(zero-emission zones, emission
standards, etc.)
Promote market uptake • Market push instruments
Facilitate access to low-cost
de-risking/insurance instruments (CAPEX subsidy, tax rebates, etc.)
renewable electricity
(“take or pay”) Infrastructure: Long-term
ENABLING MEASURES
INDUSTRY
Partial exemptions of grid • Carbon pricing
charges, taxes and levies for • Sectorial mandates
electrolysers* (emission, RE content etc.)
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Key facts about the developments in power to hydrogen are presented in Table 4, followed by some
pilot projects.
Share of hydrogen produced by 4% of the global hydrogen supply is produced via electrolysis
electrolysis (the rest is fossil fuel-based)¹
Cost of hydrogen production from • Cost of hydrogen production from electrolysis, through PEM,
electrolysis in 2017: EUR 6.7/kg of H₂; potential to drop to EUR 4.1/kg in 2025²
(PEM technology is better-suited to provide flexibility)
• PEM CAPEX cost is expected to decrease from EUR 1 200/kW (2017)
to EUR 700/kW (2025)¹
• Alkaline CAPEX cost is expected to decrease from EUR 750/kW (2017)
to EUR 480/kW (2025)¹
Cost of hydrogen infrastructure USD 8–10/kg (current estimates)
(including production, logistics for
USD 2–4/kg (expected in near future)¹
distribution)
Key countries with P2H₂ applications P2H₂ projects are located in (inter alia) Australia, Austria, Canada, Chile,
Denmark, France, Germany, Japan, United Kingdom and United States
Countries with goals for introducing China, France, Germany, Netherlands, Japan, Korea, United Kingdom
hydrogen in transport sector and United States⁴
Hydrogen demand expected in future by World: Total demand for hydrogen to increase from almost 8 EJ today¹
sector to 29 EJ in 2050⁵.
Europe: 2.8 GW of electrolyser capacity expected by 2025²
Japan: 300 000 tonnes per year (target by 2030)⁶
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Surf ‘N’ Turf Initiative – Orkney, United Kingdom The Stone Edge Farm micro-grid in California
was not able to export excess renewable power
The Surf ‘N’ Turf initiative uses power generated to the California Independent System Operator
from tidal and wind energy produced on the (CAISO) market in an economically viable way.
island of Eday, Orkney. Eday is home to 150 One of the challenges in exporting power was to
people who collectively own a 900 kW wind comply with the minimum threshold of 0.5 MW
turbine. The turbine was vulnerable to curtailment set by CAISO and meeting CAISO’s requirements
for various reasons. The Surf ‘N’ Turf initiative to install onsite weather forecasting. The
converts excess wind and tidal energy into micro-grid developer is now using hydrogen
hydrogen via a 500 kW electrolyser on the island; to export its power. It has set up a bank of
the hydrogen is then transported from Eday on onsite electrolysers, which converts the excess
ships to Mainland Orkney (Surf ‘N’ Turf Initiative, electricity into hydrogen. This hydrogen is then
n.d.). The hydrogen produced can either be used used in fuel cell electric vehicles. When required,
in industries and households during emergencies, the hydrogen is also used to produce power
or during lean seasons when renewable energy using fuel cells (Forni, 2017).
generation is low. Figure 9 shows the schematic
structure of the initiative.
H2 H2
Hydrogen to industry
Excess H 2
Hydrogen to buildings H 2 to Gas Grid
Electric grid
H 2 Fuel Cells
Electric cars H 2 Storage
Adapted from: Surf‘n’ Turf Initiative, 2018
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V. IMPLEMENTATION
REQUIREMENTS: CHECKLIST
TECHNICAL Hardware:
REQUIREMENTS
• Electrolyser technology to produce hydrogen from renewable electricity
• Hydrogen fuel cells to convert hydrogen into electricity when required
• Conversion units to use renewable hydrogen and convert into other substitutes such
as methane
• Hydrogen transport vessels such as ships and trucks
• Transport infrastructure (e.g. existing natural gas infrastructure)
• Storage facilities for hydrogen (in form of high-pressure or liquid hydrogen storage)
REGULATORY • Allow use of existing gas networks for transporting renewable hydrogen and set relevant
REQUIREMENTS standards, including safety standards (e.g. encourage blending of hydrogen with natural gas
in appropriate proportions, harmonise blending limits)
• Provide the necessary incentives for hydrogen to offer flexibility services (e.g. exemption
from taxes, levies and grid fees for electrolysers providing flexibility to the grid)
• Allow electrolysers to participate across the power sector (e.g. in some countries, only
generators can access frequency containment reserves and frequency restoration reserves)
Private sector:
• Work together with the public sector on innovative projects
• Disseminate information about the contribution of renewable hydrogen to power sector
transformation and VRE integration
• Develop new business models for the power sector and VRE integration
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ABBREVIATIONS
EJ exajoule
GW gigawatt
h hour
Hz hertz
kg kilogram
kW kilowatt
MW megawatt
PV photovoltaic
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