Written Evidence Submitted by Dr Andy Palmer
Overview and hypothesis:
It is vital that government policy for transportation is not myopically focussed on Battery Electric Vehicles (BEVs). In all probability, BEV, as it evolves, will be the dominant force in passenger road transportation, but the technology race continues to examine which form of energy is best deployed in more specialist sectors. Hydrogen has a role to play in one form or another, but it is likely that Hydrogen’s deployment in the industrial space rather than transportation will give rise to its availability in “Green” form (see Image 1).
Fuel Cells may be a form to be found in transportation by 2030 due to a decrease in cost (see Image 2), but specifically used in heavy goods vehicles and long-distant buses. It is unlikely to find favour in cars, urban buses or SUVs. However, it is likely to find itself in competition with alternative uses of hydrogen, notably synthetic fuels and cylinder combustion of hydrogen, which has the advantage of utilising the existing Internal Combustion Engine (ICE) infrastructure.
For the UK to stay competitive, it is vital that research and application is encouraged on all fronts but recognising that hydrogen’s use in the motor industry might not be as it is envisaged in the current mainstream school of thinking.
Below, I outline five considerations for hydrogen’s role in contributing to net zero objectives:
1) Green hydrogen Market Trends
Green hydrogen demand will depend on reduction in cost and increase in policy support
• Various agencies have forecast green Hydrogen demand in 2050 to reach 200-400 MT based on the current policy scenario and 650-750 MT if strong policy support is seen
• Green hydrogen cost is expected to decrease by ~60% by 2030
• This cost decline will likely lead to export by Gulf Cooperation Council/Australia & consumption by Asia/America
2) Regulatory Landscape
Globally, support for hydrogen in zero emission policy is rising
• Hydrogen-based targets are being announced across EU, South Korea, Japan and China. Policy emphasis is on subsidising green hydrogen production via electrolysis & fuel cell electric vehicles on road
• Supportive policies are awaited across major economies, such as India and the USA
3) Green Hydrogen Applications
Industry & transportation expected to have around 70% of green hydrogen applications by 2050
• Industry applications will drive green hydrogen demand in short and medium term
• In the long term, transport demand may provide some growth for green hydrogen, but only in specific “heavy weight” categories. Battery electric vehicles will dominate in light vehicle sectors, such as cars. Fuel Cell will compete with synthetic fuels for the heavy vehicle sector. See current forecasts in Image 3.
4) Technology Trends
Green Hydrogen Generation to be dominated by electrolysis technology
• Water electrolysis using renewable electricity to be the dominant hydrogen production process
• Polymer electrolyte membrane (PEM) water electrolysers expected to be the future technology of choice due to simpler systems & less land requirement compared to currently-used alkaline electrolysers
Challenges remain in developing Hydrogen Infra (transportation, storage & distribution)
• Hydrogen handling is costlier than natural gas due to its lower density & inflammable nature
• 3-4x more storage infrastructure is needed to be built to provide same level of energy security as natural gas
• Hydrogen transport as ammonia (relatively safer and easier) seen as more viable option (for long distance) but has technological challenges, especially related to re-conversion of Ammonia to pure hydrogen
5) Cost Trends
Green hydrogen expected to reach cost parity with grey hydrogen by around 2030
• Current green hydrogen production costs are around $4-6/Kg (~3x costly vs grey hydrogen)
• Green hydrogen production expected to reach cost parity with grey hydrogen by around 2030 – driven by electrolysers’ economies of scale (<$500/ KW) and falling cost of solar and wind (<$20/MWh)
Land based hydrogen infrastructure to be key for hydrogen transportation
• Hydrogen infrastructure is the biggest barrier towards large scale green hydrogen adoption. For same level of infrastructure as natural gas it would cost ~$637 billion by 2050.
• Transport of hydrogen as Ammonia via ships being planned by Australia & Saudi Arabia. Hydrogen sea-born trade less-likely to be competitive even by 2040s
• Local production & inland transport (trucks, inland pipelines & filling stations) to be the dominant mode of hydrogen transportation (especially for shorter distances)
• Cost/ Kg of hydrogen refueling stations to come down by around 80% by 2030 led by higher utilization, larger station size & standardized equipment