Hydrogen Roadmap North America Workshop

1. Hydrogen Roadmap North America Workshop Alex Körner alexander.körner@iea.org

2. Content • Roadmap outline: Scope – vision – structure • Roadmap analytical capabilities: Modeling tools • State of the art • Literature review • Input data validation – transport • Preliminary results • Expected outcomes of the workshop

3. Structure and scope of the roadmap

4. Outline of Roadmap • Introduction • Rationale for roadmap – H2 in the energy system • Transport • Stationary applications • Energy storage • Synergies between energy sectors • Technology status today • Vision for deployment to 2050 • Technology development – Actions and milestones • Policy, regulation, financing: Actions and milestones

5. Rationale hydrogen • Decarbonization of the energy system • Power sector: Increased demand for operational flexibility creates demand for energy storage • Transport sector: Increased demand for high energy density AND low carbon fuels puts pressure on biofuels and creates demand for alternatives • Stationary: Increased demand for high efficient and integrated processes creates demand to use intersectoral synergies

6. Key features of Hydrogen • Potentially low carbon • Very flexible energy carrier which can be generated from almost all PE to a suite of useful end-use energy carriers • Can store energy • At large scale over long time – Energy storage & VARres integration • At small capacities under restricted space and weight requirements - Transport • Can be used as feedstock to reduce carbon footprint • Hydrogen is used in large quantities already today

7. Key features of Hydrogen • In the long term, hydrogen applications needs to built on: • The use of low carbon hydrogen • The need to store energy (either at larger quantities or in mobile applications) • In the short term, existing infrastructure to generate and distribute hydrogen will have to play a great role to create hydrogen demand markets

8. Technology status today • Discussion of key technology components • Electrolyzers, fuel cells and storage technology • Discussion of demand side technologies • Fuel cell vehicles • Niche applications • Fork lifts, UPS, micro FC CHP • Hydrogen distribution, transmission and retail infrastructure • Transmission technology – Gaseous and liquefied trucking, pipelines • Hydrogen refueling stations

9. Technology status today • Hydrogen based flexibility options for the power sector • Power – to – power • Power – to gas • Power – to – fuel • Efficient steel making processes • Blast furnace top-gas recovery with H2 separation and re-injection

10. Regional focus • The roadmap will contain global views on certain aspects – e.g. GHG potential of FCEVs in road transport • Detailed analysis will focus on the following regions • EU G4 • USA • Japan

11. Vision – Transport • What if 25% of all PLDVs are FCEVs by 2050? • Vehicle sales and ramp-up rates • Discussion of global fuel use and emission reduction potential • Costs and benefits • Infrastructure requirements and costs

12. Vision – Hydrogen storage • What if large scale hydrogen electricity storage can get competitive? • Estimation of storage potentials in high VARres integration • What costs/efficiencies needs to be reached for H2 electricity storage technology to be competitive

13. Vision – Power-to-gas • Can power-to-gas be a competitive flexibility option? • At which carbon price power-to-gas can get competitive? • Attempt to estimate regional storage potential within existing NG infrastructure under certain blend shares based on existing studies • What techno-economic parameters of electrolyzers needs to be achieved? Source: Analyse des Klimaschutzpotentials der Nutzung von erneuerbaremWasserstoff und Methan, DVGW 2013

14. Vision – Power-to-fuel • What if otherwise curtailed electricity would be used to produce H2 for transport? • Even under optimistic cost/efficiency assumptions of electrolyzers, low value electricity needs to be used to make renewable H2 competitive with e.g. NG steam reforming • Can the inherent storage need for transport refueling infrastructure serve as a storage for VARres integration? Source: Renewable Electricity Futures Study, Volume 1, NREL 2013

15. Technology development – Actions and milestones • Actions and milestones will be set based on the following metrics: • Which cost targets needs to be met – benchmarking of H2 technologies • Transport: TCO breakeven with gasoline hybrid ICEs • Storage: LCOE breakeven with PHS, CAES • By when cost targets needs to be met • Based on FCEVs stock targets, stock turn over and sales ramp-up • Based on power sector scenarios and variable renewable integration

16. Policy, regulation, financing – Actions and milestones • FCEVs: Estimateofeconomicgap • Effectoftaxationofpetroleumbasedtransportfuels • Quantificationofdirectsubsidies • Power – to – gas: Impact ofcarbonprizing • H2 electricitystorage: • Discussionofcurrentbarriers – e.g. storage technologies frequently do not fit naturally into existing regulatory frameworks as they provide value across different portions of the market

17. Analytical capabilities

18. Overall ETP modelling framework • Supplyside: • TIMES – Energy system least costoptimization model • Demandside • Split intothreesectoralmodels: Transport (MoMo), Industry and Buildings • All demandsidemodels are technologyrich stock accounting simulation toolswhichallow for sectoral projections of energy use, emissions and costsuntil 2050

19. Model horizon: 2009-2050 (2075) in 5 year periods ETP modelling framework Energycosts Primary energy Conversion sectors End-use service demands End-use sectors Final energy Electricity production Material demands Heating Cooling Passengertravel Freight etc. Electricity Gasoline Diesel Natural gas Heat etc. Industry Refineries Fossil Renewables Buildings Synfuel plants Nuclear CHP and heat plants Transport MoMo model etc. ETP-TIMES model Energydemand

20. Hydrogen supply options Centralised hydrogen production max. 10% Natural gas Heavy fuel oil Coal Biomass Natural gas pipeline Natural gas use Pyrolysis/ Gasifier/ Reformer with and without CCS H2 use in transport, industry, buildings, electricity generation, refining H2 distribution H2 pipeline Nuclear Solar Sulfur/Iodine cycle H2 storage Electricity Electrolysis Decentralised hydrogen production Electricity Electrolysis at fuel station H2 gas storage H2 use in transport Natural gas Reformer at fuel station LH2 storage Natural gas Heavy fuel oil Reformer/Gasifier at refinery H2 use in refining

21. ETP Mobility Model (MoMo) • It is a spreadsheet model of global transport energy use, emissions, safety, and materials use • analysis of a multiple set of scenarios, projections to 2050 • Based on hypotheses on GDP and population growth, fuel economy, costs, travel demand, vehicle technology shares • World divided in 29 regions, incl. a good number of specific countries • USA, Canada, Mexico, Brazil, France, Germany, Italy, UK, Japan, Korea, China, India • The model is suitable for handling regional and global issues • It contains a large amount of data on technology and fuel pathways • full evaluation of the life cycle GHG emissions • cost estimates for new light duty vehicles • estimates for fuels costs and fuel distribution infrastructure • section on material requirements for LDV manufacturing • It is based on the "ASIF" framework: Activity (passenger travel) * Structure (travel by mode, load factors) * Energy Intensity = Fuel use

22. Vehicle stock in 2DS and variants • 2DS passenger transport integrates technological and behavioural aspects: Avoid/Shift/Improve • ETP 2012 discussed different technology portfolios with respect to energy use, emissions and costs based on varying the shares of FCEVs vs. PHEVs

23. Fuel demand by scenario and fuel type • To reach the emission target, in the 2DS energy use in the road transport sector needs to be reduced by almost 50% compared to the 4DS, going back to 2010 levels whilst vehicle stock is more than doubling • The increased use of FCEVs can liberate more biofuels for use in other transport sectors

24. State of the art

25. Literature review • Literature list see ETP 2012 • Recently reviewed: • NREL FCEV Demonstration Project • FC stack lifetime seems main issue (2000h ~ 40,000 – 80,000km) • FCH-JU/McKinsey bus study • Leaves a lot of open questions with respect to results and methodology • NREL Renewable Energy Futures Study • Interesting levels of curtailment at various rates of variable renewable energy penetration: At 90% RES (~60% VARres) 140 TWh electricity are might be curtailed annually • NAS - Transition to alternative vehicles and fuels • “Fuel cells, batteries, biofuels, low-GHG production of hydrogen, carbon capture and storage, and vehicle efficiency should all be part of the current R&D strategy. It is unclear which options may emerge as the more promising and cost-effective.”

26. Kick-off meetingand Europe WS • On June 9/10 IEA hosted kick-off meetingand Europe WS in Paris • Vehicle technology is mature, market is needed • Strong need to built upon existing studies • Strong desire to focus on qualitative analysis • No common idea on infrastructure development nor how a “final” H2 T&D and retail system could look like • Costs of renewable H2 are a major challenge for applications in all sectors - economical only with very low electricity costs • Niche markets for electrolysers might emerge in the near future in the control power segment • Careful classification and distinction between H2 energy storage applications and energy service

27. Input data review • In November we sent a compilation of input data for review to the Hydrogen Roadmap steering group • The data contained assumptions on: • FCEV Stock & sales • Technology component cost and learning rates • FCEV costs • Vehicle fuel economy

28. Preliminary results - FCEV costs • FCEV costs drop relatively quickly with sales if envisaged FC stack production costs can be achieved

29. Total cost of driving • TCO drop slower due to H2 generation and T&D cost • Based on TCO “economic gap” analysis can be conducted

30. Exampleeconomicgapcalculation • 30% taxationofpetroleumfuels • TCO breakeven FCEV vs. hybrid around 2040 • At 30% petroleumfueltaxation, annual FCEV „vehiclesubsidy“ wouldpeakat ~15% tax revenue

31. Copper-platestorage potential 2DS • Combination of long-term investment decision/least cost energy system run and dispatch model run with 2050 fixed ES fleet • Storage results captures only time-wise mismatch between supply and demand

32. Long-term H2 electricity storage • 300 MWel_out, 120h, 5 cycles/y • LCOE highly senstive to: • Set-up of storage & cycle rate • Investment cost electrolyzer/fuel cell, efficiency fuel cell • Break even with OCGT at ~300 USD/kW for FC if all other parameters fixed – Synergies with transport/large scale FC production?

33. Short term H2 electricity storage • Electricity – to – electricity short term storage does not look very promising, even with optimistic cost assumptions

34. Expectations & proceeding the workshop

35. WS expectations & structure • Agenda of the WS is very broad • We will not have the time to go very much into technical detail • Identification/prioritization of main technical/market related/policy related issues for H2 applications in North American context • Mobile • Stationary • Storage • Industry? • Short presentations will start discussion in seven specific sessions

36. Thanks!