This position paper explores the EU general decarbonization policy frame and argues that although the decarbonization targets, electrification targets, and clean electricity generation targets are feasible, it is doubtful that the EU Green H2 sector will deliver its own business promises due to a shortage of green electricity needed to produce clean molecules.
Written by Ronnie Belmans (EnergyVille/KU Leuven) and Jean-Michel Glachant (Florence School of Regulation).
The EU core target is decarbonizing, mainly decarbonizing the energy we use (we are not addressing here agriculture, livestock, forest fires or deforestation).
Energy is a physical world, ruled by physical rules and laws. Therefore, decarbonizing the energy we use should start from being physically coherent with the basics of energy sources, energy vectors and energy usages. While energy itself will never disappear, it has different forms and, transforming from one form to another, resembles a loss, from the possible point of view of an energy usage. For example, the European nuclear plants produce every year around 2,300 TWh of nuclear heat, but this heat delivers only 750 TWh of electricity. Electricity, while being roughly not available as primary energy, is the highest form of energy, it has the highest quality, because it can deliver so many usages with easiness and very high efficiency. For example, the 3,350 TWh of fuels consumed every year in the EU for land transportation could be replaced by 1,100-1,300 TWh of electricity. Another example, the Heat Pumps for buildings are self-defined by their “coefficient of performance” vis-à-vis fuel heating: it is minimum 3 (3 times more) and maximum 4.5. Therefore, “electrifying” every energy usage that can be electrified is a sound attitude, according to the physical world of energy: “electrification first”. As electricity itself is easily produced directly from the primary sources of renewable energy (as wind and solar), feeding this electrification with that renewable electricity looks as a very robust and very efficient way of decarbonizing our EU economy and society.
When electricity is not workable as direct energy vector for particular usages, another decarbonization tool has to be thought of. There are several families of such other decarbonization processes. One is to produce clean molecules with clean electricity (”indirect electrification”). One is to harvest bio-energy from nature and to transform it into the appropriate molecule (“bio-fuels”). One is to capture the produced CO2 and to store it or to use it (CCS-CCU).
Producing clean molecules from electricity has become very popular in EU energy policy discussions under the general wording of “Green Hydrogen”. Being a molecule, hydrogen and its family (as: Ammonia, Methanol) is technically able to perform a very large set of energy usages (incl. transportation, heating & cooling). However, in a policy prioritizing decarbonization, the Green Hydrogen family is only a tool and, as such, has to be compared to the other tools. Green Hydrogen delivers “indirect electrification”, as it is clean electricity transformed into another energy vector. Green H2 has therefore to be compared to “direct electrification” in our EU general decarbonization policy frame.
The production process of hydrogen with electrolyzers consumes at least 25 % of the electricity energy being used, and relocates only 75 % of energy in the new vector. Furthermore, in many usages H2 works at a very low energy efficiency typical of fossil fuels. For example, in land transportation, the fuel cells consuming H2 deliver only 50% of the initial energy contained into the clean electricity, leading to an overall efficiency (electricity at the wind turbine to electricity at the motor of the car, accounting for the energy to fill the tank) of 32%. From the point of view of a decarbonization policy, it is clearly a very inefficient usage of the initial clean electricity. For heating & cooling, we have already seen that “direct electrification” was 3 to 4.5 more efficient than the traditional fuel usage.
To grasp the size of this “clean energy efficiency usage” issue at the European level, one needs to look at the global picture in 2030. Today EU consumes 2,750 TWh of electricity a year. In 2030, with the booming electrification that our policy pushes, Eurelectric assumes that we reach 3,590 TWh. To keep this electrification decarbonized enough, EU has a 2030 target of roughly 69 % of renewable electricity, therefore 2,480 TWh. Will we reach that amount of renewable electricity generated? EU Commission and others forecast 1,950 TWh of wind and solar, plus 420 TWh of “classical renewables” (hydro, geothermal, biomass) = 2,370 TWh of green electricity. Therefore, we are likely to be short of green electricity for the present EU targets. If we add to that 750 TWh of nuclear = 3120 TWh. We are likely “short” of clean electricity in 2030 or just covered. Any further increase of demand would need to be covered by fossil-based generation.
Therefore, how can EU guarantee to find enough “extra clean electricity” to deliver the announced “indirect electrification” target of 10 million tonnes of Green H2 produced by 2030? This production requires 525 TWh more of clean electricity, equivalent to 27 % more than the 1,950 TWh of foreseen wind and solar. This “extra target” does not therefore look feasible. However, that inability to guarantee the delivery of 10 Mt of clean molecules in 2030 does not jeopardize the core EU decarbonization targets for 2030, which are roughly guaranteed. This difficulty is mainly for the Green H2 sector itself, which does not seem able to deliver its own promises as a new business sector in 2030. It looks as a particular H2 “business model” issue.
To help EU starting to decarbonize its “hard to abate sectors” during this decade where we look short of clean electricity adequacy, we might also reasonably investigate “Carbon Capture, Storage, Usage”, as it comes with a promise of reducing up to 10 times the emissions escaping from these sectors.
Two conclusions: (1) it is doubtful that the EU Green H2 sector will deliver its own business promises. It is however reasonable to guarantee the feasibility of most of the EU energy policy, and of all its core: decarbonization targets, electrification targets, and clean electricity generation.
(2) To fully guarantee this core of our EU energy policy, there are other key conditions that we will not detail more in this short note. Key will be the availability of infrastructures able to convey much more electricity demand (3,590 TWh instead of 2,750 TWh today, i.e. 30 % more) from where it is generated (a lot in the North Sea) to where it is withdrawn. As a lot is supplied by varying renewables, the resulting flows are much higher than the increase in energy demand (= doubling of flow capacity). Key will also be the industry adequacy: the capability of delivering the equipment, the components, the materials, the raw materials; all along the electricity proper industrial value chains (for the grids, and for the new wind and solar units), and all along the electrification industrial value chains (as for Electric Vehicles, and Heat Pumps).