The increasing penetration of wind and solar power in the years to come will make the hydrogen produced from renewable energy an affordable alternative by 2035, according to DNV GL’s new research paper.
According to the report titled ”The economically viable use of green hydrogen” , green hydrogen will become an economic energy carrier to complement electricity and accelerate the decarbonization of industrial feedstock and heat, as well as providing long-term storage solutions,
DNV GL’s Energy Transition Outlook forecasts that solar PV, wind energy and hydropower will account for 80% of global electricity production in 2050. As this capacity increases, opportunities to utilize its low-cost electricity are becoming feasible to avoid curtailment: initially conversion into heat, then (daily) battery storage, and eventually conversion into green hydrogen, DNV GL said.
The prerequisite for hydrogen to become an economically viable energy carrier are two-fold, according to the paper. Firstly, the prospect of increasing times with low-cost electricity caused by an oversupply of available energy due to the sharp rise of renewable energy sources. Secondly, use cases for hydrogen applications are expected to be in support of low-carbon options.
If those parameters are set, the production of hydrogen from electricity can compete with natural-gas based hydrogen production and provides a viable commercial business option for numerous applications, starting with industrial hydrogen feedstock, according to the paper.
DNV GL’s energy experts conclude that of the main reasons for the economic feasibility of hydrogen between 2030 – 2050 is, among other, an increase in time periods when low or zero cost prices for electricity are available due to the rise of renewables.
“The prospect of delivering affordable hydrogen applications in the mid-term future provides a very encouraging signal to accelerate the global energy transition,” said Lucy Craig , Vice President of Technology and Innovation at DNV GL – Energy.
“Our research demonstrates that green hydrogen provides an optimal use for surplus electricity, which we expect to see in the years to come due to the rapid rise of renewable energy. In combination with electrolysis, hydrogen proves to be an economically feasible solution for the decarbonization of the heat and storage sector.”
DNV GL’s researchers made a distinction between hydrogen production using surplus electricity generation from renewables and peak electricity generation, applying hydrogen as a fuel. This distinction is based on the underlying belief that the role of hydrogen in the electricity system competes with alternative solutions to the challenges of the energy transition and the increasing penetration of variable renewable energy systems.