世界氫能理事會：2023年脫碳能源系統中的氫（英文版）（30頁）.pdf

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1、HyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded EnEne er rg gy y S Sy ys st te em ms sThis report was authored by the Hydrogen Council in collaboration with Baringa Partners LLP.The authors of the report confirm that:1.There are no recommendations and/or any measures and/or trajectories

2、 within the report that could be interpreted as standards or as any other form of(suggested)coordination between the participants of the study referred to within the report that would infringe the EU competition law;and2.It is not their intention that any such form of coordination will be adopted.Wh

3、ilst the contents of the report and its abstract implications for the industry generally can be discussed once they have been prepared,individual strategies remain proprietary,confidential,and the responsibility of each participant.Participants are reminded that,as part of the invariable practice of

4、 the Hydrogen Council and the EU competition law obligations to which membership activities are subject,such strategic and confidential information must not be shared or coordinated including as part of this report.Published in October 2023 by the Hydrogen Council.Copies of this document are availab

5、le upon request or can be downloaded from our website:This report was authored by the Hydrogen Council in collaboration with Baringa Partners.The reproduction of this work,save where otherwise stated,is authorised,provided the source is acknowledged.All rights are otherwise reserved.2Hydrogen Counci

6、l,Baringa PartnersHyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsKeKey y m me es ss sa ag ge es s f fr ro om m t th hi is s r re ep po or rt tHyHyd dr ro og genen b br ri in ng gs s s sy ys st temem b benenefefi it ts s i in n a ad dd di it ti io on n

7、 t to o dedec ca ar rboboni nis si ingng hahar rd d-toto-ababatate e s se ec ct to or rs sResource-rich regions need to prioritize connecting renewable resources to demand centres via hydrogen pipelinesResource-poor regions need to focus on maximising the value of limited renewables available,and ca

8、n use curtailed power to make hydrogen Islanded power systems need to pay extra attention to flexibility,which electrolyzers and hydrogen turbines can provideReRen ne ewawab bl le e h hy yd dr ro og ge en n p pr ro od du uc ct ti io on n wiwil ll l a ad dd d f fl le ex xi ib bi il li it ty y t to o

9、enenererg gy y s sy ys st temems s a an nd d c co on ns seqequ uenent tl ly y r rededu uc ce e t th he e c co os st t t to o dedec ca ar rboboni niz ze eElectrolyzers can respond to market prices to help alleviate supply-demand crunches in systems relying on high levels of intermittent wind and sola

10、rHydrogen to power provides resilience against most challenging part of the year when renewable load is low and energy demand is high.It complements the role of batteries and CCS in doing soNeNet tw wo or rk k in inf fr rasast tr ru uc ct tu ur re e anand d s se en ns sib ible le marmark ke et t d d

11、e es sig ign n rurul le es s a arere c cri rit ti ic ca al l e en na ab bl le ers rs f fo or r d de ec ca arbrbo on ni isasat ti io on n u usi sin ng g hyhydrdro og ge en nHydrogen and CO2pipelines will enable production while storage is key to unlocking flexibility benefitsAllowing electrolyzers to

12、 respond to prices will ensure lower overall energy costs and less price volatility3Net Zero 2050 systemJapanTexasCW EuropeAnnual power system benefit of hydrogen$6.0 bn$2.5 bn$5.9 bnHydrogen share of power generation14%3%1%Hydrogen share of flexible power capacity57%9%11%Much of the additional syst

13、em benefits of hydrogen reside in the power system where flexibility is a challenge:In three contrasting energy systems hydrogen adds flexibility and reduces cost to the power system10 15%Added value to renewable power projects from electrolyzers$14 bnAnnual flexibility benefit to systems identified

14、57 GWElectrolyzer capacity in Texas by 2050$247 bnInvestment in hydrogen infrastructure in Texas 100 kt per dayHydrogen piped through Central-West Europe in 2050Source:Hydrogen Council-Hydrogen in Decarbonized Energy Systems(2023)$50 bnConversion,network and storage infrastructure required in TexasH

15、ydrogen Council,Baringa PartnersHyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsKeKey y m me es ss sa ag ge es s f fo or r t th hr re ee e r re eg gi io on ns s a as ss se es ss se ed dHyHyd dr ro og genen c ca an n a al ll lo ow w T Texexa as s t to o

16、 c co on nt ti in nu ue e t to o b be e a an n enenererg gy y exexp po or rt terer,adopting both renewable and low-carbon hydrogen production to take advantage of relatively low-cost solar,wind,and natural gas resource,and carbon sequestration potential.GrGro ow wt th h in in r re en ne ew wabable l

17、e h hy yd dr ro og ge en n p pr ro od du uc ct tio ion n m me eanans s el elecect tr ro ol ly yz zerers s a an nd d h hy yd dr ro og genen-toto-popow we er r pepea ak ke er rs s c ca an n hehel lp p st sta ab bi il li iz ze e t th he e p po ow we er r sysyst ste em m,requiring proportionally less ba

18、tteries and natural gas firing to offer flexibility for every unit of intermittent wind and solar.If incentives are structured appropriately,this should not require temporal correlation rules,as prices alone should promote electrolyzers to run when it is best for the system to do so.LoLow w-cacar rb

19、 bo on n h hydydr ro og ge en n o of ff fe er rs s s so om me e i in ns su ur ra an ncece a ag ga ai in ns st t a an ny y dedec cl li inene i in n nanat turura al l g ga as s prpro oducduct ti io on n t thahat t c co oul uld d a ar ri is se e f fr ro om m decarbonization.Repurposing of pipelines and

20、 storage infrastructure will bring benefits through extended asset life,avoiding stranded network infrastructure.Source:Hydrogen Council-Hydrogen in Decarbonized Energy Systems(2023)Hydrogen is a bigger part of Japans decarbonisation journey than elsewhere as indigenous renewable resource is more li

21、mited.ThThi is s w wi il ll l r re eq qu ui ir re e a a m ma aj jo or r e ex xp pa an ns si io on n o of f p po or rt t s sp pa ac ce e Japan will need two-thirds more terminal footprint relative to today to deal with storage requirements for liquid and gaseous hydrogen and provide flexibility in th

22、e absence of geological storage potential.HyHyd dr ro og genen a an nd d d dereri iv va at ti iv ve e f fu uel els s s su uc ch h a as s a ammommon ni ia a w wi il ll l p pr ro ov vi id de e fleflex xib ibilitility y r re eq qu uir ire ed d t to o d de ec cararb bo on niz ize e J Japapanan s s p po

23、ow we er r s sy ys st te em m alongside the development of renewable wind and solar.Japans limited renewable resource means hydrogen and ammonia will be more important than batteries in providing flexible,dispatchable power,particularly in areas like Tokyo,Chubu and Kansai,where renewable resource i

24、s most scarce.El Ele ec ct tr ro ol ly yz ze er rs s r runniunningng o on n e ex xc ce es ss s popow we er r f fr ro om m w wi ind nd a and nd s so ol la ar r cocou ul ld d a ad dd d v va al lu ue e t to o r re en ne ew wa ab bl le es s p pr ro oj je ect cts s,while still producing hydrogen that mat

25、ches the import price.This domestic hydrogen production will play a minor role relative to imports but will make more renewable power capacity viable for JapanThThe er re e i is s a a r ro ol le e f fo or r b bo ot th h r re en ne ew wa ab bl le e a an nd d l lo ow w c ca ar rb bo on n p pr ro od du

26、 uc ct ti io on n in in C Ce en nt tr ral al-WeWes st t E Eu ur ro op pe e,across scenarios of low or high gas prices,though the share of each will depend on whether long term gas prices are more tied to LNG imports or pipeline gas.To enable rapid scale-up of production capacity,no regrets developme

27、nt of storage and transport infrastructure is required.AlAll lo ow wi in ng g e el le ec ctr tro ol ly yz ze er rs s toto r re es sp po on nd d toto m ma ar rk ke et t p po ow we er r p pr ri ic ce es s w wi il ll l lo low we er r s sy ys st te em m c co os st ts s versus forcing electrolyzers to li

28、nk to individual renewable power assets.Production rules such as additionality and temporal correlation intended to prevent market distortions increase the overall cost of the system by reducing flexibility within the system that comes from hydrogen,forcing other sources of flexibility to overbuild.

29、$247 bn$2.5 bn$5 bn2.5 3.4 Mt$5.9 bn2/3$6 bn10 15%Investment in Hydrogen infrastructure in Texas by 2050Annual benefit from electrolyzers and peakers in Texas power grid by 2050Cumulative benefit of extending life of natural gas infrastructure to facilitate hydrogenElectrolyzer capacity in Europe by

30、 2050Annual system Benefit from allowing electrolyzers to operate freelyAdditional port terminal footprint required versus today to accommodate fuel importsAnnual system benefit from power generation from hydrogen and derived fuelsAdditional value to renewable projects selling curtailed energy to el

31、ectrolyzersTexasCentral-West EuropeJapan4Introduction5Hydrogen Council,Baringa PartnersHyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsCoCon nt te ex xt t f fo or r ththe e r re ep po or rt t HyHyd dr rogogenen c cr reaeat tes es s st tr ronong gerer l

32、 li in nk ks s b be et tw weeneen el elecect tr ri ic c,g ga aseouseous s a an nd d l li iq qu ui id d enenererg gy y f fl lo ow ws s whwhi ic ch h b br ri in ng g b benene ef fi it ts s n notot c ca ap pt tu ur reded i in n l le ev vel eli iz zeded c cosost tThe worlds energy system continues to be

33、 based on fossil fuels,which are either burned directly,or transformed into electricity.As our energy system decarbonizes to meet the shared goal of limiting global warming,these fuels will be increasingly replaced through electrification.However,sectors which are difficult to electrify will continu

34、e to require liquid and gaseous fuels,and these fuels can be produced using hydrogen.To fulfil this role,hydrogen fuels must be sustainable.This means hydrogen will be made from solar,wind or nuclear power through the electrolysis of water,or from natural gas using carbon capture and sequestration i

35、nfrastructure.If not used to provide flexible and reliable energy directly,hydrogen will be processed into liquid fuels using recycled carbon dioxide or nitrogen.The presence of hydrogen will result in stronger links across the energy system by providing a bridge between electric,gaseous and liquid

36、energy mediums.These links will allow areas with abundant renewable energy generation to meet energy demand in the power,heating,industrial or transport sectors where renewable energy is more limited.They will however therefore placeadditional demand on the power sector to serve the production of fu

37、els.The benefits and challenges provided by hydrogen will therefore vary depending on whether the system is a net exporter or importer of energy,and the extent to which it is already connected to other systems via existing power,gas,and liquid fuelnetworks.Previous studies,including our Hydrogen for

38、 Net Zero report have assessed the direct abatement potential of hydrogen as a low-carbon fuel.In this report we build on that direct benefit by demonstrating that irrespective of the type of system in place,there are quantifiable system benefits to introducing hydrogen infrastructure that go beyond

39、 the levelized-cost value of usinghydrogen-derived fuels versus the next best alternative.We do so by accounting for system effects arising from linking power,gas,and liquid systems,particularly in providing flexibility,security and resilience to the wider energy system.These benefits have historica

40、lly been provided by liquid and gaseous fuels which are inherently more flexible and easier to manage than electricity.ExExh hi ib bi it t 1 1:C Co on nc ce ep pt tu ua al l e en ne er rg gy y f fl lo ow ws s t to od da ay y v ve er rsusus s i in n a a d de ec ca ar rb bo on ni iz ze ed d e en ne er

41、 rg gy y sysyst ste em mSource:Hydrogen Council-Hydrogen in Decarbonized Energy Systems(2023)OilNatural GasRenewables and NuclearBiomassCoalOilNatural GasRenewablesand NuclearBiomassCoalLiquid FuelsGaseous FuelsSolid FuelsElectricityLiquid FuelsSolid FuelsElectricityFuture Energy Systems,hydrogen en

42、ables extensive interconnectionTodays Energy System,little interconnection between energy vectorsRenewable hydrogenP2X fuel productionLow-carbon hydrogenGaseous FuelsHydrogen to power6Hydrogen Council,Baringa PartnersHyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded E En nererg gy y S Sy

43、ys st temsemsFoFoc cu us s o on n t th hr re ee e c co on nt tr ra as st ti in ng g s sy ys st te em ms sT Th he e r re ep po or rt t p prorov vi id de es s i in ns si ig gh ht ts s o on n e en ne er rg gy y s sy ys st te em m e ev vo ol lu ut ti io on n a an nd d t th he e b be en ne ef fi it ts s

44、o of f h hy yd drorog ge en n t th hrorou ug gh h a an na al ly ys si in ng g t th hr re ee e d di if ff fe er re en nt t r re eg gi io on na al l e en ne er rg gy y s sy ys st te em ms sSource:Hydrogen Council-Global Hydrogen Flows(2022),Baringa Japan Power Market Model,US.Bureau of Labour Statisti

45、cs,U.S.Energy Information Administration,American Clean Power Association,ExExh hi ib bi it t 2 2:R Ra at ti io on na al le e f fo or r t th hr re ee e e en ne er rg gy y sysyst ste em ms s st stu ud di ie ed dTeTex xa as s i is s r re es so ou ur rc ce e r ri ic ch h,g gr ri id d-is islanland de ed

46、 d,anand d h hasas d de em manand d cl clu us st te er rs s l lo ocacat te ed d f fa ar r a aw wa ay y f fr ro om m r re es so ou ur rcece z zo on ne es sProduces 25%of US gas,over 40%of U.S.oil,and has built 28%of US wind capacitySolar,wind,and gas needs to move from rural areas to Texas triangle o

47、f demand in the East and South where 70%of GDP occursEnergy exports from Texas and Louisiana represented$315 billion in 2022,and 83 percent of U.S.energy exportsCurrently Potential to export 9 Mt of hydrogen and derived fuels by land and seaTexasJapanCentral Western EuropeJaJap pa an n i is s a an n

48、 i is sl la an nd de ed d s sy ys stetem m ththa at t w wi il ll l r re el ly y h he ea av vi il ly y o on n i im mp po or rts ts toto s su up pp po ort rt l li im mi iteted d s so ol la ar r a an nd d w wi in nd d reres so ou urc rce e88%of the countrys primary energy supply is met with either coal

49、,gas or oil,and over 98%of all fossil fuels are imported.Minimal national gas grid but the worlds largest LNG import capacityLimited access to onshore renewable energy or geological CO2 sequestration to help decarbonize heavy industry and powerOver 30%of the governments 30-45 GW offshore wind target

50、 is planned in Hokkaido,one of Japans least energy intensive regionCeCen nt tr ra al l-WeWes st t E Eu ur ro op pe e (G Ge er rm ma an ny y,B Be en ne el lu ux x,a an nd d F Fr ra an nc ce e)i is s h hi ig gh hl ly y cocon nn ne ect cte ed d a an nd d w wi il ll l r re el ly y o on n i im mp po or r

51、t ts s a an nd d d do om me es st ti ic c r re es so ou ur rceces s t to o dedec ca ar rboboni niz ze eToday Central-West Europe has 60 GW of power connection capacity 43%of average demandThe proportion of hydrogen and derived fuels imported through four major corridors will rise from 14%in 2030 to

52、86%by 2050Targeting net zero power systems by 2035-2040,but relying on 32%fossil fuels for energy needs todayIncreasingly harmonized energy regulation under EU,but different system visions among member statesEnergy systems have different underlying fundamentals and different starting points for deca

53、rbonising which influence their preferred pathway.To highlight both the evolution of the system as it decarbonizes,and the benefits of hydrogen to the system on that journey,we have assessed three regional systems with contrasting features.By modelling the energy system of each region as a set of zo

54、nes with their own resource potential,demand,and price,we show that each system will evolve differently,but that each highlights system benefits that hydrogen brings.Increasing offshore wind targetIncreasing Electricity DemandTexas gas pipelines todayJapan renewable supply targets and demand centres

55、138.0Days of Natural Gas StorageDays of Power Storage0.17Hydrogen Council,Baringa PartnersHyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsIn Int tr ro od du uct cti io on n t to o enenerergygy s sy ys st temem a an na al ly ys si is sThThe e l lo on ng

56、 g-teter rm m e ev vo ol lu ut ti io on n o of f t th he e e en ne ergrgy y s sysystetem m i is s m mo od de el ll le ed d u un nd de er r a a s sc ce en na ar ri io o c co on ns si is st te en nt t w wi it th h t th he e v vi is si io on n f fo or r h hy yd drorog ge en n d de em ma an nd d a an nd

57、 d g gl lo ob ba al l t trarad de e s se et t o ou ut t i in n o ou ur r prpre ev vi io ousus r re epopor rt ts s Source:Hydrogen Council-Global Hydrogen Flows(2022)ExExh hi ib bi it t 3 3:S Sc ce en na ar ri io o a assussum mp pt ti io on ns s f fo or r EnEne er rg gy y S Sy yst ste em m S St tu ud

58、 dy yUnUnd de er rs st ta an nd d e en ne er rg gy y s sy ys st te em m b be en ne ef fi it ts s r re eq qu ui ir re es s e en ne er rg gy y s sy ys st te em m m mo od de el ls s that can simulate how the needs of the whole system are met both on a long term and short-term basis.The shape of supply

59、and demand over hours,days,weeks and years need to be accounted for,as should the impact of continuing or decommissioning existing infrastructure.We have employed a modelling platform that uses todays system as a starting point and then determines the optimal mix of infrastructure to serve the syste

60、ms demand,and then simulate how that system meets demand hour to hour over a 30+year time horizon.ThThe e a an na al ly ys si is s w wi it th hi in n t th hi is s r re ep po or rt t f fo oc cu us se es s o on n t tr ra an ns sm mi is ss si io on n l le ev ve el l s sy ys st te em m with the aim of i

61、nforming infrastructure decisions at state or multi-state level.Distribution level questions associated with last-mile delivery and delivering an energy transition at the metro area infrastructure are equally important to understand in selecting the right decarbonisation pathway.They present challen

62、ges,such as how to scale up zero-emissions heavy-good-vehicle refuelling,which liquid and gaseous fuels may be able to address more readily than electrification.As with most modes of civic infrastructure planning,they require a different,tailored system analysis versus what is required to assess who

63、le regions or large countries.BaBas se e c ca as se e s sc ce en na ar ri io o f fo or r s sysyst te em m e ev vo ol lu ut ti io on n -our base case scenario builds on our previous reports detailing overall hydrogen demand,directions of hydrogen trade(GloGlob bal al H Hy yd dr ro og ge en n F Flo lo

64、w ws s)and our view on cost of various elements of the hydrogen value chain detailed in our annual HyHyd dr ro og genen In Ins si ig gh ht ts s.Using reference scenarios from this prior work as a starting point,we simulate how the combined hydrogen,power,and gas system will evolve to meet expected l

65、evels of hydrogen demand and broader energy demand and emissions targets in the wider system by 2050.WeWe a as ss su um me e t th he e s sy ys st te em m r re ea ac ch he es s dedee ep p dedec ca ar rboboni nis sa at ti io on n byby t thahat t popoi intnt and that both demand for power increases ste

66、adily through electrification of heating and transport,while gas demand peaks in 2030s and then decreases to 2050.FoFor r C Ce en nt tr ra al l-WeWes st t E Eu ur ro op pe e w we e h ha av ve e a al ls so o t te es st te ed d a a h hi ig gh h g ga as s p pr ri ic ce e s sc ce en na ar ri io o in whi

67、ch gas flows from Russia do not return and consequently prices into Europe reflect much higher reliance on LNG from the US and Middle East,competing with continued gas demand growth in developing markets.Our 2050base case assumptionsPotential hydrogen demand%imported(exported)Energy System emissions

68、Renewable LCOEEmissions priceGas priceTexas16 Mt(55%)Net Zero18-96$/MWh158$/t CO22.0$/mmbtuCWE33 Mt86%Net Zero30-84$/MWh250$/t CO24.3$/mmbtuJapan25 Mt100%Net Zero80 183$/MWh207$/t CO24.2$/mmbtuAdditional High gas price test caseCWE33 Mt80%Net Zero30-84$/MWh250$/t CO210.5$/mmbtuAsAss se es ss si in n

69、g g s sy ys stetem m b be en ne ef fi its ts -to determine system-benefits,we compare our base case scenario to a test scenario in which a particular asset or behaviour is restricted.The per-unit-energy total system cost of each scenario is then compared to derive the system benefit.Please see Annex

70、 for further details of assumptions8How energy systems will evolve using hydrogen to decarbonize9HyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsHydrogen Council,Baringa PartnersT Te exaxas s w wi il ll l c co on nt ti in nu ue e t to o b be e a an n e

71、 en ne er rg gy y exexp po or rt te er r b bu ut t w wi it th h m mu uc ch h m mo or re e c co om mi in ng g fr fro om m s so ol la ar r a an nd d wiwin nd d v vi ia a h hy yd dr ro og ge en nExExh hi ib bi it t 4 4:V Vi isi sio on n f fo or r a a h hi ig gh hl ly y d de ec ca ar rb bo on ni iz ze e

72、d d a an nd d e ex xp po or rt t-ledled enenererg gy y s sy ys st temem in in T TexexasasSource:Hydrogen Council-Hydrogen in Decarbonized Energy Systems(2023),Hydrogen Council Hydrogen for Net-Zero(2021),Hydrogen Council Global Hydrogen Flows(2022)Note:1)Measured in GW of electricity inputExpansion

73、of renewable generation and transmission capacity1Co-location of electrolyzers with renewable power supply2Repurposing of gas pipeline infrastructure for hydrogen pipelines3Production facilities for hydrogen derived liquid fuels4CO2transport and storage network5Texas is endowed with some of the rich

74、est energy resource in the world.In addition to an abundance of oil and natural gas,it provides some of the U.S.s lowest cost solar and wind energy and geology suited to sequestering carbon.This means that Texas can abate emissions using hydrogen from both natural gas and its renewable power resourc

75、e.This will result in six key developments within the energy system shown in Exhibit 4.Firstly,reren ne ew wa ab bl le e tratran ns sm mi is ss si io on n c ca ap pa ac ci ity ty f frorom m w wi in nd d s so ou urc rce es s toto d de em ma an nd d c ce en ntretres s w wi il ll l e ex xp panand d as

76、the power system relies less on thermal generation and demand for electricity in transport and buildings increases.Over 50 GW of e ele lec ct tr ro oly lyz ze er rs s c co ou uld ld b be e lo loc catate ed d w wit ith h r re en ne ew wabable le p po ow we er r s su up pp ply ly and will be connected

77、 to demand and export centres via via 1 16 6 MMt t o of f h hy yd dr ro og ge en n p pip ipe elinline e cacap pa aci cit ty y repurposed from natural gas pipelines.Natural gas demand will eventually decrease but gagas s p pi ip pe el li in ne e i in nf fr ra as st tr ru uc ct tu ur re e w wi il ll l

78、 s st ti il ll l b be e n ne ee ed de ed d t to o m mo ov ve e o ov ve er r 3 3 b bc cf f/d d gagas s f fr ro om m prpro oducduct ti io on n f fi ie el ldsds to where over$40 bn of low-carbon hydrogen production investment could be centred along the Gulf Coast.PrPro od du uc ct ti io on n f fa ac ci

79、 il li it ti ie es s f fo or r h hy yd dr ro og ge en n d de er ri iv ve ed d l li iq qu ui id d f fu ue el ls s (k ke er ro os se en ne e a an nd d a am mm mo on ni ia a)c co ou ul ld d m ma ak ke e u up p c cl lo os se e t to o 3 30 0%o of f a al ll l h hy yd dr ro og ge en n dedem ma and nd a and

80、 nd c ca an n r re epl pla ac ce e e ex xi is st ti ingng r re ef fi inener ri ie es s a al lo ongng t thehe G Gul ulf f C Co oa as st t as demand for hydrogen increased while global demand for petroleum products declines and oil production becomes more oriented towards petrochemical products.OvOve

81、er r$8 8 b bn n o of f i in nv ve es st tm me en nt t i in n C CO O2 2tratran ns sp po ort rt a an nd d s stotorarag ge e n ne etwtwo orkrks s c co ou ul ld d e en na ab bl le e hydrogen production and industrial processes in the refining belt and is likely to expand to encompass thermal power gener

82、ation from natural gas.11171521020406045203532050WestPanhandleNorthSouth1157GW188805101520Mt220352050Low-carbonRenewable916HyHyd dr ro og genen prpro oducduct ti io on n byby tetec ch hn no ol lo og gy yEl Ele ec ct tr ro ol ly yz ze er r cacap pa aci cit ty y b by y rereg gi io on n10Hydrogen Counc

83、il,Baringa PartnersHyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsCeCen ntr tra al l-WeWes st te er rn n E Eu ur ro op pe e w wi il ll l e ev vo ol lv ve e t to o mimix x b bo ot th h i impmpo or rt te ed d a an nd d d do omemes st ti ic ca al ll ly y

84、 prpro oducduce ed d h hy ydrdro og ge en n a and nd r re enenew wa abl ble es sThe Central West Europe(CWE)region could nenee ed d up up t to o 3 32 2.5 5 MMt t o of f hyhydrdro og ge en n byby 2 20 05 50 0.It will develop a mix of both renewable and low-carbon hydrogen production,as well as a mix

85、of both imports and domestic production.As we have demonstrated in our previous Global Hydrogen Flows report,hydrogen-derived liquid fuels such as ammonia and e-kerosene will largely be imported from outside of Europe where renewable energy is cheaper to produce into major ports such as Rotterdam,An

86、twerp,and Hamburg,where import terminal projects are already in development.Hydrogen gas will be piped into the region from four corridors envisaged by the European Hydrogen Backbone initiative and ju jus st t o ov ve er r 1 10 00 0 k kt t p pe er r d da ay y o of f p pi ip pe el li in ne e c ca ap

87、pa ac ci it ty y wiwil ll l b be e n ne ee ed de ed d b by y 2 20 05 50 0 to enable transport of hydrogen imported into the region as well as between markets within the region.This will support existing connectivity provided by cross-border power transmission interconnectors and allow hydrogen produ

88、ction to more easily access large-scale salt-cavern storage potential which is concentrated in Germany.ImpImpo or rt ts s w wi il ll l b be e a au ug gmenment teded b by y d do omesmest ti ic c p pr ro od du uc ct ti io on n o of f b bo ot th h l lo ow w-cacar rb bo on n a an nd d r re en ne ew wa a

89、b bl le e h hydydr ro og ge en n.To 2030 this will be driven by domestic policy aimed at kickstarting renewable hydrogen production.Beyond 2030 low-carbon hydrogen,enabled by mature natural gas infrastructure and the ability to sequester CO2in the North Sea,could increase its share if the region pri

90、oritises delivering hydrogen at minimum cost and ensures security of supply of natural gas through diversified imports of liquefied natural gas.By 2050 both imported reren ne ew wa ab bl le e h hy yd drorog ge en n a an nd d d do om me es sti tic c l lo ow w-cacar rb bo on n h hydydr ro og ge en n c

91、ocou ul ld d h ha av ve e s si im mi il la ar r s sh ha ar re es s ofof d domome es st ti ic c s su up pp pl ly y.Notably given the large share of demand served by imports,domestic production required in 2050 is not materially larger than 2030 targets for production set by countries within the regio

92、n and amounts to 5-6 Mt annually over 2040-2050.By contrast tratran ns sp po ort rt a an nd d s stotorarag ge e i in nf fraras strutruc ctuturere w wi il ll l b be e susub bst sta an nt ti ia al ll ly y l la ar rg ge er r t th ha an n w wh ha at t i is s c cu ur rr re en nt tl ly y i in n p pr ro og

93、 gr re essissio on ngiven the overall level of hydrogen consumed within the region.ExExh hi ib bi it t 5 5 evevo ol lu ut ti io on n o of f C Cenent tr ral al-WeWes st t E Eu ur ro op pe e e en ne er rg gy y s sy ys st te em mSource:Hydrogen Council-Hydrogen in Decarbonized Energy Systems(2023),Hydr

94、ogen Council Global Hydrogen Flows(2022)Note:1)Measured in GW of electricity input2.612.711.016.7051015202530350.920303.43.51.420403.420501.13.2Grey ImportGrey CWELow Carbon ImportLow Carbon CWERenewable ImportRenewable CWE176225050100 150 200 250This studyEU H2 BackboneHydrogen Supply(2030-2050),Ba

95、se Case Scenario,Mt of H2 equivalentCross-border hydrogen pipeline capacity required by 2050,GWNorth Sea Corridor Baltic CorridorSouth Western CorridorSouth Eastern Corridor 9581,23372731962005001,000 1,500 2,000 2,500 3,000 3,500 4,000Primary fuel mix for power,hydrogen and HDFdemand in 2050,TWh81G

96、asWind Solar Nuclear Biofuels Hydro3,938Hydrogen pipeline and power transmission corridors in CWE2/1Ratio of renewable energy to natural gas as primary energy source in 205044 GWElectrolyzers required in CWE by 20501PipelinePowerline11Hydrogen Council,Baringa PartnersHyHyd dr ro og genen i in n D De

97、ceca ar rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsJaJap pa an n w wi il ll l n needeed n ne ew w i im mp po or rt t i in nf fr ra as st tr ru uct ctu ur re e toto d de el li iv ve er r d de ec ca ar rb bo on ni iz ze ed d e en ne er rg gy y u us si in ng g hyhyd drorog ge en n a an nd

98、d a am mm mo on ni ia aAs Japan decarbonizes,it will largely replace imported LNG and coal with hydrogen and derived fuels such as ammonia alongside development of wind and solar potential.This will result in three major changes to the system.First,ththe erere w wi il ll l b be e a a p ph ha as se e

99、 o ou ut t o of f c co oa al l w wi ithth reren ne ew wa ab bl le es s w wi iththi in n ththe e p po ow we er r s sy ys stetem m,followed by phase out of gas with hydrogen and ammonia.Existing gas-fired power generation capacity will need to be re-purposed to take hydrogen and ammonia for power.Seco

100、ndly,momor re e r renenewewa ab bl leses w wi il ll l meamean n a a mumuc ch h l la ar rg gerer t tr ra an ns smimis ss si io on n g gr ri id d to facilitate moving power from renewable zones into the central prefectures.Finally,LNGLNG i im mp po or rt t i in nf fr ra as st tr ru uc ct tu ur re e w

101、wi il ll l n ne ee ed d t to o b be e r re ep pu ur rp po os se ed d t to o d de ev ve el lo op p a am mm mo on ni ia a a an nd d h hy yd dr ro og ge en n i im mp po or rt t i in nf fr ra as st tr ru uc ct tu ur re e.Additional footprint will be needed to accommodate above-ground liquid hydrogen sto

102、rage terminals.Hydrogen pipelines may be needed but in far less quantities than regions such as CWE and Texas as consumption for power and industrials will be centred around port terminals,as is the case with LNG today.ExExh hi ib bi it t 6 6:EvEvo ol lu ut ti io on n o of f J Ja ap pa an n s s e en

103、 ne er rg gy y sysyst ste em mSource:Hydrogen Council-Hydrogen in Decarbonized Energy Systems(2023)263268352389175782563551141881101201143570163702020203520509999631,160+16%Japans optimal power generation mix for achieving Net Zero by 2050,TWh4473LNG,2023Hydrogen,2050+66%JaJap pa an n s s i im mp po

104、 or rt t tetermrmi in na al l f fo oo otptpri rin nt,t,km2Hydrogen and AmmoniaBatteryNuclearWindBiomass,Hydro and GeothermalSolarGasCoal and oilShippingRenewableselectrolyzersDemandFossil GenerationNuclearFuture Japanese Energy System12Benefits of hydrogen in decarbonized energy systems13Hydrogen Co

105、uncil,Baringa PartnersHyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsEaEac ch h s sy ys st te em m p pr re es se en nt ts s c ch ha al ll le en ng ge es s i in n e en ns su ur ri in ng g af aff fo or rdadabl ble e,r re el li ia abl ble e,l lowow c ca

106、arborbon n s sy ys st te em ms s,w whi hic ch h hyhyd drorog ge en n c ca an n e en na ab bl le eWell-developed energy systems are the pillars of well-developed economies and highly decarbonized systems will need to display ththreree e o ov ve er r-ararc ch hin ing g c ch hararacact te er ris ist ti

107、c ics s t to o fufun nc ct tio ion n w we ell ll:the flexibility required to respond to routine fluctuations in supply and demand,the resilience needed to respond to more acute or extreme shocks,and a level of affordability that ensures the economy is competitive.Within each of these pillars there a

108、re several ways hydrogen can help address momor re e s sp pececi if fi ic c s sy ys st tem em c ch ha al ll leneng geses such as resilience to price shocks,counterbalancing the intermittency of renewables,and effectively linking areas of resource to areasof demand.ExExh hi ib bi it t 7 7:T Th he e b

109、 be en ne ef fi it ts s o of f h hy yd dr ro og ge en n i in nf fr ra ast str ru uc ct tu ur re e i in n a ad dd dr re essissin ng g sysyst ste em m c ch ha al ll le en ng ge es sSource:Hydrogen Council-Hydrogen in Decarbonized Energy Systems(2023)Power system flexibility-How will short term and sea

110、sonal fluctuations caused by large amounts of intermittent solar and wind be dealt with?Regulation of supply and demand-how do systems create the right incentives for rewarding system flexibility?Resilience in isolated systems-how will power systems deal with more acute supply/demand imbalances caus

111、ed by weather events?Import/export security-how will regions with large net energy balances maintain security of supply and demand?Price shocks-How will systems deal with unexpected changes in commodity prices?Optimal use of limited resources-how can systems with limited renewable resources keep the

112、 cost of decarbonized energy to a minimum?How does the system effectively link resources to demand?How do we reduce the risk of stranded assets used to serve fossil fuels and extend asset lifetime?System challenges in decarbonisingelectrolyzers can offer a source of demand-side flexibility to power

113、systems,provided they are free to respond effectively to market price signals and not isolated from the wider system through regulatory rulesHydrogen offers a form of long-duration energy storage where it can be burned to produce power at times where there is a prolonged supply shortage that batteri

114、es will not be able to cover cost-effectivelyHydrogen can be sourced from a variety of countries with strong renewable supply potential,reducing risk of energy cartels capable of controlling pricesHydrogen can be produced from both renewable power and natural gas,offering opportunities to hedge agai

115、nst shocks to either gas or power pricesAmmonia derived from hydrogen can provide a major source of power where there is low renewable resourceHydrogen pipelines can be an optimal means of moving energy across a region as well as a means of prolonging the lifetime of natural gas network and storage

116、infrastructureFlexibilitySecurity and resilienceAffordabilityBenefits of hydrogen14Hydrogen Council,Baringa PartnersHyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsAnalogous regionsPower system flexibilityRegulation of supply and demandResilience in is

117、olated systemsSecurity of importsSecurity of exportsResilience to price shocksOptimal use of limited resourcesLinking resources to demandExtending life of network assetsChCha al ll le en ng ge es s a ar re e b bo othth u un ni iv ve er rs sa al l a an nd d u un ni iq qu ue e t to o di dif ff fe er r

118、e en nt t e enener rg gy y s sy ys st te em ms sDifferent regions have different energy system characteristics which determine the range of challenges they face in decarbonising.Each system will need to be fleflex xib ible le t to o r re es sp po on nd d t to o r ro ou ut tin ine e flufluc ct tu uat

119、atio ion ns s in in d de em manand d while also having reres si il li ie en nc ce e toto m mo orere e ex xtretrem me e s sh ho oc ck ks s.Systems will also need to carefully regulate how supply and demand participate in order to ensure level playing fields and avoid additional system costs caused by

120、 restricting freedom to operate.On top of these challenges,ourthree regions highlight different challenges faced by different systems.CeCen nt tr ra al l-WeWes st t E Eu ur ro op pe ewill need to accommodate both high levels of domestic renewable energy generation as well as a need to secure importe

121、d energy from lower-cost supply locations.TeTex xa as salso needs to accommodate high penetration of renewables as the grid is isolated from neighbouring markets and therefore requires higher levels of flexibility that in CWE is partially provided through cross-border interconnectors.By contrast JaJ

122、ap pa an nwill need to decarbonize with relatively low amounts of economically feasible renewable development potential and must find ways to maximize the utility of its limited resources,while still providing adequate system flexibility,security,and resilience.These regions serve as exemplars becau

123、se they contain challenges that feature across all energy system,and ththe es se e c ch ha al ll le en ng ge es s arare e apapp pliclicabable le t to o b bo ot th h e em me er rg gin ing g m marark ke et ts s s se ee ek kin ing g t to o g gr ro ow w s su us st tainainabably ly,asas w we ell ll asas

124、d de evevelo lop pe ed d m marark ke et ts s aimaimin ing g t to o d de ec cararb bo on niz ize e quiquic ck kl ly y.In both contexts the energy system needs to ensure flexibility,security,and affordability increasingly without using fossil fuels.ExExh hi ib bi it t 8 8:T Th hr re ee e d di if ff fe

125、 er re en nt t gegeo ogrgra ap ph hi ie es s h hi ighghl li ighght t t th he e chcha al ll le en ng ge es s a an nd d b be en ne ef fi it ts s o of f h hy yd drorog ge en n in inf fr rasast tr ru uc ct tu ur re e w wit ith hin in t th he e s sy ys st tememSource:Hydrogen Council-Hydrogen in Decarbon

126、ized Energy Systems(2023)South Korea,New Zealand,IrelandChile,Australia,Gulf region,Argentina,Norway,South Africa New England;China,California FlexibilitySecurity and resilienceAffordability15HyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsHydrogen Cou

127、ncil,Baringa PartnersSySys st te em m b be en ne ef fi it t:r renene ew wa ab bl le e h hy yd dr ro og genen p pr ro od du uc ct ti io on n ofoff fe er rs s a a c cr rit itic ical al s souour rc ce e ofof fl fle exi xib bi il li it ty y t to o p po ow we er r grgri id ds s ththa at t p pr ro om mo o

128、t te es s d de ec ca ar rb bo on ni is sa ati tio on n EneEner rg gy y s sy ys st te em ms s nenee ed d f fl le ex xi ibi bil li it ty y t to o c co opepe w wi it th h r ro oututi inene c chahangnge es s i in n s supplupply y a and nd dedem ma and,nd,otherwise prices become volatile,there are greate

129、r opportunities for rent seeking,and consumers pay more as a result.This is esesp pececi ia al ll ly y i impmpo or rt ta an nt t i in n p po ow werer s sy ys st temsems asas e ele lec ct tr ric ical al e en ne er rg gy y is is m mo or re e d difficifficu ult lt t to o s st to or re e than chemical e

130、nergy contained in liquid and gaseous fuels.Traditionally fossil-fuelled power generation has provided various flexibility benefits,including short-term grid balancing,coping with daily peaksand troughs in demand,as well as monthly or seasonal variations in demand.As fossil fuels get phased out,this

131、 flexibility needs to come from elsewhere,with electrolyzers,batteries,hydrogen-fired generators,pumped storage,and demand response all playing important roles.Texas is home to abundant energy resources,with much of the U.Ss exported oil and gas moving through the Gulf Coast,and larlarg ge e amamo o

132、u un nt ts s o of f lanland d w wit ith h lo low w c co om mm me er rc cial ial valuvalue e s su uit itabable le fofor r b bo ot th h s so olarlar anand d w win ind d e en ne er rg gy y.This makes Texas ideal for producing both renewable and low carbon hydrogen and with the addition of the Inflation

133、 Reduction Act(IRA)offering up up t to o$3 3 /k kg g in in t taxax c cr re ed dit its s,both renewable and low carbon hydrogen could be produced very competitively.This will greatly help enable Texass potential to produce up to 9 Mt of hydrogen for export potential identified in our Global Hydrogen

134、Flows studyas well as meeting up to 7 Mt of domestic demand.However,the Texas power system is larlarg ge ely ly is islanland de ed d fr fro om m t th he e r re es st t o of f t th he e U U.S S.,w wh hic ich h c canan le leadad t to o p pe er rio iod ds s o of f vever ry y h hig igh h p pr ric ice es

135、 sfor consumers when demand peaks during very hot or very cold weather,or when supply shortages occur during period of low solar and wind output.El Ele ec ct tr ro ol ly yz ze er rs s c ca an n hehel lp p s st ta abi bil li iz ze e prpri ic ce es s by offering a flexible source of demand.If the Texa

136、s power system is to decarbonize without needing to serve any demand from electrolyzers,this will mean price spikes up above$250/MWh on some days and will result in several weeks where prices are above$100/MWh.However,if Texas were to produce 16 Mt p.a.then prpri ic ce es s w wo oul uld d s st ta ab

137、i bil li iz ze e c co onsnsi ideder ra abl bly y,a as s e el le ec ct tr ro ol ly yz ze er rs s a ar re e i incnce entnti iv vi iz ze ed d t to o t tururn n dodow wn n w whehen n prpri ic ce es s a ar re e hi hig gh h a and nd tuturnrn u up p w wh he en n p pri ric ce es s a arere l lo ow w,insulati

138、ng the system against price shocks.Overall,we estimate this flexibility will reduce the cost of decarbonising the energy system by approx.$1.3 bn annually($23 bn cumulatively)between now and 2050.ExExh hi ib bi it t 9 9:H Hy yd dr ro og ge en n e ex xp po or rt t p po ot te en nt ti ia al l o of f T

139、 Te ex xa as;s;e el le ec ct tr ri ic ci it ty y p pr ri ic ce e-durdura at ti io on n c cururveve w wi it th h a and nd wiwit th ho ou ut t e el le ec ct tr ro ol ly yz ze er rs s;c co os st t o of f h hy yd dr ro og ge en n i in n TeTex xa as s u us si in ng g I IR RA ASource:Hydrogen Council-Hydr

140、ogen in Decarbonized Energy Systems(2023),Hydrogen Council Global Hydrogen Flows(2022)Note:1)Includes hydrogen to power infrastructure.Adding electrolyzers alone will result in increase in total renewable generation capacity,though investment required per unit of demand is lower7.09.48.8051015202030

141、205011.115.81.7ExportDomestic050100150200250300050 100 150 200 250 300 350 400Days of year,ordered from highest price day to lowest1.1(0.3)2.1(0.1)Renewables0.7SMR2.1ATRIRA creditCost net of IRA2.01.81.8Hydrogen and hydrogen derived fuel export potential,MtImpact of the IRA on the levelized cost of

142、hydrogen,$/kgElectricity price-duration curve in Houston,2050$/MWh16010018024517No Hydrogen7With Hydrogen1Onshore WindSolarOffshore Wind357352Installed renewable capacity in 2050,in a power system with and without hydrogen,GWWith electrolyzersNo electrolyzers$1.3 bn annual system benefit16Hydrogen C

143、ouncil,Baringa PartnersHyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsSySys st te em m b be en ne ef fi it t:AlAll lo ow wi in ng g el electectr ro ol ly yz zerers s t to o reres sp po on nd d t to o s sy ys st te em m p pr ri ic ce es s i is s n ne e

144、e ed de ed d t to o e en na ab bl le e t th he e vaval lu ue e o of f f fl le ex xi ib bi il li it ty yRegulatory criteria to qualify renewable hydrogen can support the decarbonisation of the energy system.For example,in Europe these criteria mandate that electrolyzers contract only with newly built

145、 renewable assets(additionality)and must match the generation profile of those assets to the hour or less(temporal correlation).These criteria were introduced to ensure hydrogen production goes hand in hand with new renewable electricity generation capacities(additionality)and that hydrogen is produ

146、ced when and where renewable electricity is available(temporal and geographical correlation)1.At the same time,our analysis shows ththa at t reres stritric cti tin ng g e el le ec ctrotrol ly yz ze er r g ge en ne erarati tio on n c ca an n rered du uc ce e s sy ys stetem m f fl le ex xi ib bi il li

147、 ity ty i in n twtwo o w wa ay ys s:firstly,by removing some of the freedom electrolyzers must respond to prices and secondly by reducing the pool of renewable assets they can contract with.This price response can be beneficial when supply is short,for example on prolonged overcast periodswith low w

148、ind where batteries are unavailable and other sources of flexible power are more expensive.If electrolysers are locked into hourly-correlated power supply agreements with individual renewable generation assets then ththe ey y a arere n no ot t in inc ce en nt tivizivize ed d t to o t tu ur rn n d do

149、 ow wn n w wh he en n t th he e w wid ide er r s sy ys st te em m is is m mo or re e c cararb bo on n in int te en ns siveive,or conversely to turn up when renewable power generation is high in other parts of the system.We have evaluated this flexibility restriction by comparing scenarios where elec

150、trolyzers and their required renewable power are either separate or integrated with rest of the system.In Central-West Europe,wewe e es st ti im ma at te e t th he e c co os st t o of f t th hi is s r re es st tr ri ic ct ti io on n t to o bebe$2 2.1 1 bn bn peper r a annumnnum in a scenario where t

151、he region produces 7-8 Mt of hydrogen by 2050,eqequ ui iv va al lenent t t to o$0 0.3 30 0 f fo or r eveverery y k kg g ofof r re en ne ew wa ab bl le e h hy yd dr rogoge en n p pr rododu uc ce ed d.This benefit arises from allowing electrolyzers to obtain electricity outside of the renewable asset

152、they are directly contracted with and results in less renewable power capacity being required to serve the same level of demand as there is more flexibility within the system.This validates the provisions within EU rules that allow for relaxing temporal correlation in some circumstances e.g.,when pr

153、ices are lower or when renewable generation would otherwise be curtailed.However,it also highlights that additionality rules can result in overbuild of renewables.ThThe er re e w wi il ll l b be e s si im mi il la ar r b be en ne ef fi it t f fr ro om m i in nt te eg gr ra at ti io on n o of f e el

154、le ec ct tr ro ol ly yz ze er rs s w wi it th h g gr ri id d i in n TeTex xa as sas it becomes more decarbonized,allowing them to benefit from system prices rather than renewable LCOEs.Similarly in Texas,where low-cost gas-fired power generation can be produced at$40/MWh,linking subsidies to carbon

155、intensity(as has been done in the IRA)will ensure electrolysers do not frequently dispatch at periods of higher grid carbon intensity.ExExh hi ib bi it t 1 10 0:H Ho ow w e el le ec ct tr ro ol ly yz ze er rs s r re ed du uc ce e r re en ne ew wa ab bl le e c ca ap pa ac ci it ty y r re eq qu ui ir

156、re ed d i in n c co ou up pl le ed d e en ne er rg gy y sysyst ste em mSource:Hydrogen Council-Hydrogen in Decarbonized Energy Systems(2023)Note:1)This page has been updated on October 25th2023 to reflect that EU regulatory criteria for green hydrogen production have been finalized in the EU Delegat

157、ed Act for Renewable Fuels of Non-Biological Origin090180270360450Hour of day56789101112Fixed demandExportsFlexible Heat PumpFlexible EVBatteryElectorlyserCWE Power demand by hour in June 2050,Base Case Scenario GWh236251505063528850060007008009001,0005152793343127Uncoupled22181010Coupled22870-9%Sol

158、arWindHydrogen TurbineNuclearHydroGas CCSGasBiomass and WasteBiomass CCSCWE Power generation capacity in 2050,GWReduction in renewable capacity needed to deliver decarbonized power system if electrolyzers are efficiently coupledElectrolyzers turn down during periods where other flex sources are not

159、available$2.1 bn benefit per year in CWE17Hydrogen Council,Baringa PartnersHyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsSySys st te em m b be en ne ef fi it t:P Pi ip pel eli in neses a an nd d s st to or ra ag ge e prpro ol lo ongng asass se et t l

160、if life et timime es s whwhi il le e l li in nk ki in ng g wiwin nd d/s so ol la ar r t to o a ar re ea as s ofof d de em manand dNetwork infrastructure needs in regional energy systems present one of the greatest challenges of the energy transition.Gas and electricity networks which have taken shap

161、e over several decades are now required to transform in half that time.Transmission wires will remain the primary means of moving electricity from where it is produced to where it is consumed.Buthyhydrdro og ge en n pi pipepel li inenes s w wi il ll l bebe nenee ededed d alongside them to move energ

162、y from solar and wind sites co-located with electrolyzers to areas of demand.For distances of 100s of km,this is generally lower cost than moving the same energy in the form of transmission wires and electrolyzers are therefore better located near supply locations rather than demand locations.In Tex

163、as this could result in 16 16 MMt t o of f p pi ip pe el li in ne e c ca ap pa ac ci it ty y n ne ee ed de ed d b by y 2050 2050 to move renewable hydrogen from areas with low LCOEs into the Texas triangle and gulf coast belt of fuel refineries.Additionally there could be a$3.$3.9 9 b bn n s sy ys s

164、t te em m b be en ne ef fi it t t to o ususi ingng r re epurpurpopos se ed d nanat turura al l g ga as s pi pipepel li inenes s that would otherwise have a reduced asset lifetime,as well as$2.0 bn potential benefit from repurposing existing gas storage infrastructure.Similarly,CWCWE E c co ou ul ld

165、d n ne ee ed d n ne ea ar rl ly y 2 20 0ktkt p pe er r d da ay y o of f h hydydr ro og ge en n p pi ip pe el li in ne e c ca ap pa ac ci it ty y b by y 2 20 03 30 0,a an nd d o ov ve er r 1 10 00 0 ktkt p pe er r d da ay y b by y 2 20 05 50 0 to import renewable hydrogen from the North Sea,Southern

166、and Eastern Europe,and North Africa.By contrast,production ofof lo low w-cacar rb bo on n h hydydr ro og ge en n f fr ro om m n na at tu ur ra al l g ga as s r re eq qu ui ir re es s l le es ss s n ne ew w p pi ip pe el li in ne e i in nf fr ra as st tr ru uct ctu ur re e,as gas pipelines can contin

167、ue to be the used to move energy from well source to methane reformers,which can be in industrial demand clusters.This will necessitate carbon transport and sequestration infrastructure around low-carbon hydrogen hubs which can serve other CCS use cases in addition to hydrogen production.In Texas an

168、d Central-West Europes case,adequate CO2storage potential exists in shallow seabed near-shore to facilitate this.Finally,e ex xi is st ti in ng g r re ef fi in ne ed d f fu ue el l p pi ip pe el li in ne e i in nf fr ra as st tr ru uc ct tu ur re e m ma ay y c co on nt ti in nu ue e t to o b be e t

169、th he e b be es st t o op pt ti io on n f fo or r m mo ov vi in ng g a av vi ia at ti io on n f fu ue el l.Today the Colonial pipeline carries 3m3m b ba ar rr re el ls s o of f r re ef fi in ne ed d o oi il l p pe er r d da ay y from the Gulf Coast refinery belt through the South-East to New York an

170、d as aviation fuel decarbonizes this can take kerosene derived from hydrogen produced in Texas as a drop-in fuel alongside kerosene derived from crude oil.ExExh hi ib bi it t 1 11 1:e en ne er rg gy y t tr ra an nsmsmi ississio on n c co ost sts s a an nd d h hy yd dr ro og ge en n p pi ip pe el li

171、in ne e c ca ap pa ac ci it ty y i in n T Te ex xa as sSource:Hydrogen Council-Hydrogen in Decarbonized Energy Systems(2023)020004000Capital cost of energy transmission infrastructure$/km/MWNatural gas Retrofit H2AmmoniaNew H2Offshore H2500 kV HVDC68710312991399349308Bars are representative of the c

172、apital cost range for varying pipeline capacityRefined oilMethanol16 MtpaHydrogen pipeline capacity in Texas by 2050(Mt p.a.)$3.9 bn p.a.system benefit to using repurposed natural gas pipelines that would otherwise have a reduce asset lifetime,as well as$2.0 bn p.a.benefit from repurposing existing

173、gas storage infrastructure18HyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsHydrogen Council,Baringa Partners$1.2 bn p.a.system benefit to 2050 in TexasSySys st te em m b be en ne ef fi it t:HyHyd dr ro og genen t to o p po ow werer a ad dd ds s s sy y

174、s st temem reres si il li ie en nc ce e ththr ro ou ug gh h p pe ea ak ke er rs s i in n h hi ig gh h-reren ne ew wa ab bl le e sysys st te em ms sMost highly decarbonized systems will have high levels of intermittent solar and wind generation providing the bulk of the systems emissions-free energy.

175、In addition to coping with more regular periods of tight supply-demand balances,ththe es se e sysyst ste em ms s w wi il ll l a al lsoso n ne ee ed d f fl le exi xib bi il li it ty y t to o c co op pe e w wi it th h i in nf fr re eq qu ue en nt t b bu ut t p pr ro ol lo on ng ge ed d p pe er ri io o

176、d ds s w wh he er re e t th he e susup pp pl ly y-dedem ma and nd babal la ancnce e i is s e ev ve en n ti tig gh hteter r.A typical example is a prolonged period of high pressure with high cloud cover where both wind and solar are low but energy demand is high,likely in summer in hotter climates su

177、ch as Texas,or in winters in the northern half of Europe.WhWhi il le e b ba at tt te er ri ie es s,e el le ec ct tr ro ol ly yz ze er rs s,a an nd d p pu um mp pe ed d s st to or ra ag ge e h ha av ve e a a m ma aj jo or r r ro ol le e to play in dealing with periods lasting hours,t th he ey y w wi

178、il ll l nonot t a adedequaquat te el ly y c co ov ve er r s sucuch h peper ri io odsds i if f l la as st ti ingng s se ev ve er ra al l daday ys s o or r w we ee ek ks s.Conversely,using CCSCCSto enable continued gas-fired generation will be useful for serving more predictable seasonal changes in su

179、pply-demand,as their capital-intensive nature makes them more suited to running with higher utilisation,stopping only during periods of renewable over-supply.GeGeo ot th he er rm mal al popow we er r production can also provide dispatchable power but typically only where heat sources are accessible

180、at low cost.Bi Bio om ma as ss salso offers dispatchable generation but only provided feedstock is sustainable.As a result,ththe erere i is s a a rorol le e f fo or r h hy yd drorog ge en n-toto-popow we er r pepea ak ke er rs s s si im mi il la ar r t to o t thahat t pl pla ay ye ed d byby o opepen

181、 n-cyclcycle e-gagas s-tuturbrbi in ne es s a an nd d g ga as s eneng gi in neses t to od da ay y.This form of generation has lower capital costs versus CCS-CCGTs but can run for weeks if needed to.This effectively uses hydrogen as a form of long-duration energy storage.We estimate that in order to

182、reach deep decarbonisation,systems such as Texas and CWE will need 11 GW and 18 GW of this hydrogen to power capacity,respectively.It is likely toto rurun n b be etwtwe ee en n 5 5 a an nd d 1 15 5%o of f ththe e ti tim me e,when the system is at its most strained.Beyond these regions,hyhydrdro og g

183、e en n c ca an n bebe e ex xpepec ct te ed d t to o pl pla ay y t thi his s r ro ol le e i in n a anyny s sy ys st te em m w wi it thohoutut v ve er ry y l la ar rg ge e a am mo ountunts s o of f in int te er rc co on nn ne ec ct tin ing g o or r h hy yd dr ro o o or r n nu uc cle learar p po ow we

184、er r that reduce intermittency of supply.Such prolonged flexibility is very challenging to provide through other non-chemical forms of energy storage.ExExh hi ib bi it t 1 12 2:F Fl le ex xi ib bl le e p po ow we er r susup pp pl ly y i in n T Te ex xa as s a an nd d C CWWE E Source:Hydrogen Council

185、-Hydrogen in Decarbonized Energy Systems(2023)Flexible Generation in Texas in 2050,in a power system with and without hydrogen,TWh$3.8 bn p.a.system benefit in CWE 012345678910SoSou ur rc ce es s o of f p po ow we er r b by y w we ee ek k i in n C CWWE E i in n 2 20 05 50 0,HiHig gh h G Ga as s PrPr

186、i ic ce e S Se en ns si it ti iv vi it ty y,TWhJan Feb Mar Apr MayJunJul AugSepOctNov DecBatteryH2 TurbineNatural Gas with CCS and Biomass180.249.76.027.60.1CounterfactualBase Case186.277.3BatteriesGas CCSH2 peakersUnabated gas19Hydrogen Council,Baringa PartnersHyHyd dr ro og genen i in n D Dececa a

187、r rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsSySys st te em m b be en ne ef fi it t:ImImp po or rt teded h hy yd dr ro og genen i is s k ke ey y t to o prprovovi idi dingng r re el li ia abl ble e di dis spapat tc chahabl ble e powpowe er r whwhe er re e l le es ss s reren ne ew wa ab b

188、l le es s a arere a av va ai il la ab bl le eSystems with limited renewable resource potential such as JaJap pa an n w wi il ll l n ne ee ed d toto i im mp po or rt t h hy yd dr ro ogegen n toto p pr ro od du uc ce e p po ow we er r,as there is little alternative given the lack of CO2 sequestration

189、potential.Therefore,in contrast to Texas and CWE where hydrogen-to-power acts as low-utilisation peaking capacity,hydrogen-to-power can play a more central role in Japanese power system,particularly in regions such as Tokyo,Chubu and Kansai where there is less renewable resource.In In 2 20 05 50 0 o

190、 ov verer 1 16 6%o of f J Ja ap pa an n s s gegen ne er ra at ti io on n c ca ap pa ac ci it ty y c co ou ul ld d c co om me e f fr ro om m h hy yd dr ro ogegen n o or r d de er ri iv ve ed d f fu ue el ls s s su uc ch h a as s a am mm mo on ni ia a,complementing wind and solar as the primary lever

191、of decarbonisation.Our analysis shows that ththi is s w wi il ll l reres su ul lt t i in n o on nl ly y m mo od de es st t i in nc crerea as se es s i in n ththe e c co os st t o of f e en ne ergrgy y i in n ththe es se e rereg gi io on ns s g go oi in ng g f frorom m 2 20 03 30 0 toto 2050,2050,whi

192、le prpri ic ce es s i in n o ot theher r r re eg gi io onsns m ma ay y a ac ct tuaual ll ly y f fa al ll l through pursuing decarbonisation via combination of domestic renewable power supported by hydrogen and ammonia to power generation.The ovove er ra al ll l b be en ne ef fi it t t to o t th he e

193、 J Ja ap pa an ne es se e e en ne er rg gy y s sy ys st te em m ofof u us si in ng g h hy yd dr rogoge en n i in n t th hi is s w wa ay y w wi il ll l b be e w worort th h j ju us st t ovove er r$5 5 b bn n p p.a a.versus a scenario in which Japan opts not to decarbonize but offsets its emissions el

194、sewhere.At this stage it is too early to tell whether this will be largely enabled through hydrogen or derived fuels such as ammonia or synthetic methane,and utilities and OEMs are pursuing the development of each of these options.ExExh hi ib bi it t 1 13 3:J Ja ap pa an n s s p po ow we er r m mi i

195、x x a an nd d i im mp pa ac ct t o on n p po ow we er r p pr ri ic ce es s b by y r re eg gi io on nSource:Hydrogen Council-Hydrogen in Decarbonized Energy Systems(2023)Note:1)Nuclear and geothermal generation have been omitted from this view for clarity as they provide baseload generation and conse

196、quently have lower impact on flexibility requirements 2)Synthetic methane has not been modelled in this study but would provide similar flexibility benefit if used and sourced at similar cost to hydrogen or ammonia9%17%40%24%48%14%88%33%56%53%49%39%57%40%81%9%66%38%39%34%21%19%12%KansaiChubuTokyoHok

197、urikuShikokuTohokuChugokuHokkaidoKyushu6%4%1%3%Renewable rich,excess supplyRenewable shortfall,hydrogen consumers203020508412%848511%9489-11%79868%9382-6%7788-16%7485-9%7788-23%6881-6%76WindSolarHydrogen/ammonia2Impact on power prices$/MWh,real 2022Variable renewables versus flexible production by r

198、egion in 20501TWh$5.1 bn p.a.system benefit from both new build and repurposed turbine capacity for hydrogen and ammonia20Hydrogen Council,Baringa PartnersHyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsSySys st te em m b be en ne ef fi it t:h hy yd dr

199、 ro og genen c ca an n imimp pr ro ov ve e t th he e busbusi inenes ss s c ca as se e f fo or r r re enenew wa abl ble es s whwhe er re e t th he ey y a ar re e exexp pe en ns si iv ve eCurtailment of power occurs both when supply is in excess of demand,and when transmission lines have reached their

200、 peak export capacity,causing power generation to be wasted.CuCur rt ta ai il lm me en nt t o of f s so ol la ar r a an nd d w wi in nd d p po ow we er r i is s fofor re ec casast t t to o b be e u up p t to o 3 30 0%in particularly islanded grids or where transmission grid congestion is an issue.Th

201、e renewable-rich regions of Hokkaido,Kyushu and Tohoku experience prolonged periods of curtailment in a decarbonized system.This is true even in a system which has been optimized to reduce curtailment through the deployment of batteries,and implementation of the governments grid expansion plans.In H

202、okkaido,power is curtailed for over a quarter of the year in 2050.electrolyzers can exploit these periods of low power price to produce hydrogen which is competitive with global imports.UpUp t to o 2 25 5 G GWW c ca ap pa ac ci it ty y rurun nn ni in ng g o on n c cu urtartai il le ed d /s sp pi il

203、ll le ed d e en ne ergrgy y c co ou ul ld d b be e e ec co on no om mi ic ca al ll ly y v vi ia ab bl le e.Using this cucur rt ta ai il le ed d p po ow we er r cacan n s se er rv ve e 2 2 5%5%o of f h hy yd dr ro og ge en n d de em ma an nd d i in n J Ja ap pa an n while adding 10 15%to the value of

204、 renewable assets by providing an outlet for otherwise curtailed renewable energy.ExExh hi ib bi it t 1 14 4:B Be en ne ef fi it t o of f u usi sin ng g c cu ur rt ta ai il le ed d r re en ne ew wa ab bl le e e el le ec ct tr ri ic ci it ty y t to o p pr ro od du uc ce e h hy yd dr ro og ge en n i i

205、n n J Ja ap pa an nSource:Hydrogen Council-Hydrogen in Decarbonized Energy Systems(2023)Prices in Hokkaido in 2050,from highest to lowest hour($/MWh)203020402050 Viable electrolyzer Capacity,GW%of hydrogen demand met domestically4.2%4.7%2.9%Total Value Creation,Million$electrolyzer revenue Vs Renewa

206、ble power revenue416257955192094%6%84%16%90%10%ElectrolysersRenewables$5 bn cumulative benefit to 205021Enabling infrastructure22Hydrogen Council,Baringa PartnersHyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsFoFou ur r t ty yp pe es s o of f enena ab

207、 bl li in ng g i in nf fr ra as st tr ru uct ctu ur re e arare e c cr rit itic ical alNetwork infrastructure is needed to make any energy system work effectively:pipelines,ports,caverns and bunkers will all provide the flexibility and resilience the system needs to function.Historically ththe es se

208、e nenet tw wo or rk ks s a and nd c cr ri it ti ic ca al l i infnfr ra as st tr rucuct turure e hahav ve e teten nd de ed d toto e ev vo ol lv ve e u un ne ev ve en nl ly y.In the early days of natural gas,pipelines linking Russia to Western Europe appeared gradually,underpinned by very large offtak

209、e contracts between producers and users.Similarly,today Texas experiences occasional but severe power price spikes as a result of uneven reinforcement of the power grid in certain areas which prevent transmission between generators and demand centre.Network projects also cocov ve er r l la ar rg ge

210、er r a ar re ea as s a an nd d cocon ns se eq qu ue en nt tl ly y cacan n r re eq qu ui ir re e m mo or re e e ex xt te en ns si iv ve e p pe er rm mi it tt ti in ng g a an nd d a ap pp pr ro ov va al l,taking longer to realize than generation projects as a result.For hydrogen this means careful pol

211、icy and planning focus are required,as well as appropriate risk management by governments to accelerate the development of critical enabling infrastructure that can carry more investment hurdles for private capital if not managed and supported by public policy.FoFou ur r t ty yp peses o of f enenaba

212、blinling g in inf fr rasast tr ru uc ct tu ur re e f fo or r adado op pt tin ing g h hy yd dr ro og genen in int to o d dececararb bo on nis isin ing g s sy ys st temems sSource:Hydrogen Council-Hydrogen in Decarbonized Energy Systems(2023)HyHyd dr ro og genen p pi ip pel eli in nesesare essential t

213、o connect low-cost supply with proven demand.They will also reduce price volatility and extend the lifetime of existing natural gas infrastructure by connecting lower-price regions to higher-price regions,similar to how power and gas interconnectors function todaySeSea as so on na al l h hy yd dr ro

214、 ogegen n s st to or ra agegeusing salt caverns will balance seasonal variation in supply and demand in the same way gas storage does today and is essential to lowering LCOHs and allowing electrolyzers to benefit power systems by allowing them to operate more flexibly in response to cheap power pric

215、esCOCO2 2tratran ns sp po ort rt a an nd d s se eq qu ue es stratrati tio on nis needed to facilitate low-carbon hydrogen production and will require economies of scale through pooling hydrogen production with other CCS use cases in order to achieve expected cost reductions through economies of scal

216、ePoPor rt t t te er rm mi in na al ls s a an nd d b bu un nk ke er ri in ng gwill provide storage required to deal with interruptions and delays to shipping routes and will typically provide 1 2 weeks of storage coverage for ammonia,liquid fuels such as e-kerosene,and liquid hydrogen 13 kt/day-20305

217、9 kt/day-2040127 kt/day-2050CWCWE E p pi ip pe el li in ne e cacap pa aci cit ty y 20302030-505023HyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsHydrogen Council,Baringa PartnersEnaEnabl bli ingng i in nf fr ra as st trucruct turure e:hyhyd drorog ge

218、en n pi pipepel li inenes swiwil ll l b be e e es ss se en nt ti ia al l f fo or r c co on nn ne ec ct ti in ng g c co om mp pe et ti it ti iv ve e susup pp pl ly y t to o d de em ma an nd dPipelines are essential to enabling hydrogen to grow within the power system.As previously shown,regions such

219、as CWCWE E a an nd d TeTex xa as s m ma ay y n ne ee ed d t to o m mo ov ve e h hu un nd dr re ed ds s o of f k kt t p pe er r d da ay y t th hr ro ou ug gh h p pi ip pe el li in ne es s as they are fundamentally lower cost mean of moving energy than transmission lines and therefore the primary mean

220、s of linking renewable resources to hydrogen demand,in addition to providing system benefits through extending the life of gas network infrastructure.As well as reducing overall cost of hydrogen,pipelines will be essential for minimising price volatility between markets,making for a fairer,more poli

221、tically secure transition.In CWE,pipelines will ensure prices across Germany,France,and the Benelux cocou un nt tr ri ie es s w wi il ll l r re em ma ai in n r re el la at ti iv ve el ly y a al li ig gn ne ed d s sa av ve e f fo or r m mo or re e s se ev ve er re e p pr ri icece e ev ve en nt ts s c

222、acau us se ed d b by y m mo or re e s se ev ve er re e w we ea at th he er r.If regions rely more on renewable hydrogen,as in our High gas price test case for CWE,momor re e w weaeat th herer d depepenend denenc ce e w wi il ll l meamean n sosom me e sesea asoson na al l p pr ri ic ce e v va ar ri i

223、a at ti io on n i is s l li ik ke el ly y e ev ve en n w wi it th h a an n o op pt ti im ma al l a am mo ou un nt t o of f p pi ip pe el li in ne e c ca ap pa ac ci it ty y as building enough pipelines to completely remove price differences would result in low asset utilisation and potentially high

224、pipeline usage charges as a result.ExExh hi ib bi it t 1 15 5:H Hy yd dr ro og ge en n p pi ip pe el li in ne e c ca ap pa ac ci it ty y a an nd d spspo ot t p pr ri ic ce e i in n C CWWE E u un nd de er r t tw wo o scsce en na ar ri io os s Source:Hydrogen Council-Hydrogen in Decarbonized Energy Sy

225、stems(2023)HyHyd dr ro og genen P Pr ri ic ce e E Ev vo ol lu ut ti io on n i in n 2 20 05 50 0 BaBas se e c ca as se e s sc ce en na ar ri io o(Indexed,Jan 2050=1)HyHyd dr ro og genen P Pr ri ic ce e E Ev vo ol lu ut ti io on n i in n 2 20 05 50 0 -HHi ig gh he er r g ga as s p pr ri ic ce e c ca a

226、s se e(Indexed,Jan 2050=1)0.00.51.01.5JanFebMarAprMayJunJulAugSepOctNovDecPipelines will ensure prices across Germany,France,and the Benelux countries will remain relatively aligned save for more severe price events If relying more on renewable hydrogen,allowing for some seasonal variation in pricin

227、g is more optimal,through pipelines will prevent this being severe Pipeline Capacity High gas price case111 kt/dayCWE Pipeline Capacity Base case scenario127 kt/day4.8 MtInterstate pipeline capacity connecting Texas supply to U.S.demand$2/kgDifference between summer and winter spot price for hydroge

228、n in 2050 in CWE0.00.51.01.5JanFebMarAprMayJunJulAugSepOctNovDecFranceGermany24HyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsHydrogen Council,Baringa PartnersEnaEnabl bli ingng i in nf fr ra as st trucruct turure e:hyhyd drorog ge en n st sto or ra a

229、g ge ewiwil ll l e en na ab bl le e i in nt te eg gr ra at ti io on n o of f r re en ne ew wa ab bl le e hyhyd drorog ge en n,i it t i is s t th he e u un nd de er rl ly yi in ng g s so ou ur rc ce e o of f fl fle exi xib bi il li it ty yDifferent hydrogen consumers will carry different profiles:tra

230、nsport consumption varies considerably within day and over theweek but remains reasonably flat over the year,while heating is highly seasonal and industry varies between seasonal(e.g.,fertilizers delivering in time for farming season)and non-seasonal(e.g.,24/7 manufacturing processes).Systems need t

231、o cater for this while potentially dealing with intermittent production of renewable hydrogen caused by intermittent solar and wind resource.This means ovove er ra al ll l p pe ea ak k h hy yd dr rogoge en n d de em ma an nd d i in n a a g gi iv ve en n y ye ea ar r c cououl ld d b be e 1 1.6 6x x o

232、fof a av ve er ra ag ge e dedem ma and nd and the system will need a combination of storage and production flexibility to cater for this.Peaks will occur at different times of year in different systems.In colder climates such as CWE,storage will fill up during summer/autumn and be drawn down during

233、the winter in response to higher demand and lower solar output.Seasonal storage is therefore a critical enabler of hydrogen in the energy system where domestic production occurs,with CWE and Texas each potentially nenee edi dingng 2 2 MMt t w wo or rt th h o of f s st to or ra ag ge e c ca apapac ci

234、 it ty y byby 2 20 05 50 0 through developing salt cavern storage and repurposing natural gas storage.Europe currently has enough working salt cavern capacity to provide 1.5 Mt of storage while Texas can meet approximately 50%of its storage requirements in this way.Therefore,the development of new s

235、torage sites,aswell as the repurposing of depleted gas fields will be needed long term to meet demand in our scenarios.Equally,the need to pay for storage to mitigate intermittency of renewable sources may lead to different patterns of consumption among industrial users of hydrogen(e.g.,steel and fe

236、rtilizer production)as well as rewarding renewable hydrogen producers who can reduce their intermittency through combining or oversizing renewable power purchase agreements that serve their plant.Import dependent systems such as JaJap pa an n m ma ay y n ne ee ed d l le es ss s c ca ap pa ac ci ity

237、ty i if f e ex xp po or rti tin ng g c co ou un ntr tri ie es s p pr ro ov vi id de e s so om me e o of f ththe e s stotor ra agege rereq qu ui irerem me en nts ts b bu ut t w wi il ll l p pa ay y a a h hi ig gh he er r p pri ric ce e for liquid or compressed hydrogen storage if underground resource

238、s are not available.This may impact which energy carrier is chosen as import,as ammonia and other derived liquid fuels such as kerosene will be easier to store for longer durations than hydrogen gas.ExExh hi ib bi it t 1 16 6:D De em ma an nd d shsha ap pe e,st sto or ra ag ge e c ca ap pa ac ci it

239、ty y,a an nd d st sto or ra ag ge e b ba al la an nc ce e i in n C CWWE ESource:Hydrogen Council-Hydrogen in Decarbonized Energy Systems(2023),Gas Infrastructure Europe;U.S.EIA Field Storage Data0.00.51.01.52.02030204020500.30.92.00150300450600750JanFeb Mar Apr May JunJul Aug Sep Oct Nov DecCWETexas

240、Energy Stored by week in 2050,CWE(kt)Required underground hydrogen storage capacity(Mt)Annual demand and supply profiles in CWE(Jan 1st=100)30 daysEstimated level of storage coverage required for a renewable hydrogen system1.6xPeak demand over baseline demand for hydrogen in 205025Hydrogen Council,B

241、aringa PartnersHyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsEnaEnabl bli ingng i in nf fr ra as st trucruct turure e:CCSCCS i in nf fr ra as str tru uc ctutur re e wiwil ll l e en na ab bl le e l lo ow w c ca ar rb bo on n h hy yd dr ro og ge en n a

242、 an nd d c ca an n b be e popoo ol le ed d w wi it th h brbro oa adeder r C CC CS S c cl lusust te er rLow-carbon hydrogen using CCS is needed to make the transition to hydrogen more economically attractive,particularly where CO2sequestration potential is high and natural gas is cheap(as in Texas)or

243、 renewable hydrogen will be expensive(as in CWE).However,as with other pipeline networks,building out CO2networks with multiple users delivering 10s10s o of f MMt t v vo ol lu um me e p p.a a.e ea ac ch h w wi il ll l b be e r re eq qu ui ir re ed d t to o r re ea ac ch h e ex xp pe ec ct te ed d e

244、ec co on no om mi ie es s o of f s sc ca al le e.This will mean establishing CCS clusters to pool CO2supply within industrial clusters that go beyond low-carbon hydrogen production,capturing emissions from other major emitters such as refineries,crackers,cement plants,methanol plants,and power gener

245、ators.Usually,larger emitters are clustered together into regions with strong existing gas and power network infrastructure.Regions face a decision in how to link these clusters to CO2sequestration potential anddedev ve el lo opi pingng s st to or ra ag ge e o of ff fs shohor re e i is s g ge enener

246、 ra al ll ly y m mo or re e e ex xpepensnsi iv ve e t thahan n o onsnshohor re e.H Ho ow we ev ve er r,f fo or r TeTex xa as s a an nd d C CWWE E,s se eq qu ue es st te er ri in ng g c ca ar rb bo on n u un nd de er r t th he e s se ea ab be ed d m ma ay y b be e c co om mp pe et ti it ti iv ve e ve

247、rsus underground due to relative shallowness of respective seabed and proximity to emissions clusters versus suitable land-based alternatives.Elsewhere,most of the estimated capacity is onshore in deep saline formations and depleted oil and gas fields and as such other clusters will require land-bas

248、ed CO2pipelines to link emissions clusters to storage.ReReg gi io on ns s s su uc ch h a as s ththe e U U.S S.MMi id dw we es st,t,a as s w we el ll l a as s h he ea av vi il ly y i in nd du us str tri ia al li iz ze ed d p pa ar rts ts o of f C Ch hi in na a a an nd d RuRus ss si ia a w wi il ll l

249、l li ik ke el ly y r re el ly y o on n l la an nd d-babas se ed d s se equeques st tr ra at ti io on n.ExExh hi ib bi it t 1 17 7:C CC CS S t tr ra an nspspo or rt t a an nd d st sto or ra ag ge e c cu ur rr re en nt t i in nf fr ra ast str ru uc ct tu ur re e,c co ost sts s a an nd d v vi isi sio o

250、n n i in n T Te ex xa as sSource:Hydrogen Council-Hydrogen in Decarbonized Energy Systems(2023)Conceptual evolution of CCS infrastructure in Texas versus todayCost ranges for CCS value chain components($/tCO2)121843Transport StorageTransport Storage1821632 Mt per year 50 Mt per year Economy of scale

251、 in CO2transport and storage costs($/tCO2)50 MtCO2storage capacity will be needed for low carbon hydrogen production in Texas$9bnRequired investment in CO2capture,transport and storage in Texas0510152025303540Compression&dehydrationPipeline transportShip TransportInjection and geological storageMoni

252、toring and verification26Appendix of assumptions27Hydrogen Council,Baringa PartnersHyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsAnAnn ne ex x o of f a as ss su um mp pt ti io on ns sTeTec ch hn no ol lo og gy y c co os st ts sPower infrastructure co

253、sts are based on Baringa intelligence on each region and are summarized below.Otherwise,technology costs assumed are consistent with our previous assessment of infrastructure costs detailed in PaPat th h t to o h hy yd dr ro og ge en n cocom mp pe et ti it ti iv ve en ne es ss s:A A cocos st t p pe

254、er rs sp pe ect cti iv ve e and updated annually through our HyHyd dr ro og genen In Ins si ig gh ht ts sreports.Low-carbon hydrogen is assumed to be produced using autothermal reformation with a capture rate of 90%while electrolyzer efficiency improves and capital cost declines over time.Salt caver

255、ns are assumed for storage and assessment of pipeline build is based on several standard diameters of pipe to capture increasing economies of scale.CoCom mm mo od di it ty y p pr ri ic ci in ng g Carbon and gas pricing is in Japan and Texas are consistent with the Net Zero case for our Global Hydrog

256、en Flows.In Europe,gas prices for the base case and high gas price sensitivity are developed using the IEAs Sustainable Development Scenario and EIAs Low Oil&Gas Supply Scenario respectively,while carbon prices are based on the IEAs Net Zero Scenario.SuSub bs si id di ie es sThe impact of Production

257、 Tax Credits and the Inflation Reduction Act is incorporated into hydrogen,renewable power,and CCS infrastructure in Texas.Our estimation of IRA subsidy available to ATR of gas assumes negligible upstream emissions and a carbon capture rate of 95%.Subsidies are assumed to expire in 2032.Both Product

258、ion tax Credits and Investment Tax Credits for renewable power generation are accounted for in addition to tax credits available for hydrogen production and are assumedto be stackable.Credits available for CCS under the 45Q are not considered stackable with IRA subsidies.Source:Hydrogen Council-Hydr

259、ogen in Decarbonized Energy Systems(2023)Base Case LCOE assumptions($/MWh)(2030 2050)SolarOnshore Wind Offshore windTexas-Panhandle29 2428 18n/aTexas-South33 2734 2496 77Germany54 3352 4072 41France50 3054 4084 43Japan-Hokkaido114 8893 83176 151Japan-Kyushu105 80111 105183 173Base Case Gas and carbo

260、n price assumptions(2030 2050)Gas Price($/mmbtu)Carbon Price($/tCO2)CWE4.0 4.3 91 250Texas2.3 2.069 158Japan5.6 4.2 115 207CWE,high gas price sensitivity8.8 10.591 25028Hydrogen Council,Baringa PartnersHyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsAn

261、Ann ne ex x o of f a as ss su um mp pt ti io on ns sEneEner rg gy y s sy ys st te em m c co onsnst tr ra ai intnts sIn each system hydrogen and power infrastructure are co-optimized.Power transmission capacity is fixed with future capacity additions based on latest development plans for transmission

262、 system operators.A system reserve capacity margin aligned with grid operator guidelines is used in each region.EsEst ti im ma at ti io on n o of f bebenenef fi it ts sTo determine system-benefits,we compare our base case scenario to a test scenario in which a particular asset or behaviour is restri

263、cted.The per-unit-energy total system cost of each scenario is then compared to derive the system benefit.For Japan,in the absence of a viable decarbonized power system without hydrogen we have estimated the system cost of an un-decarbonized system using a global carbon price of$275/t based on IEAs

264、SDS scenario for 2050All costs are in real 2022 U.S.dollars and conversions from energy units to mass for hydrogen have assumed lower heating values.HyHyd dr ro og genen d demaeman nd d a an nd d t tr ra ad de e f fl lo ow ws sFor the base case scenario,hydrogen demand in heating,industry and transp

265、ort and import and export flows for each region align with the Global Hydrogen Flows reference scenario.The high gas price test case for CWE aligns with the Renewable World scenario from the same report.Hydrogen demand in power sector is an optimized output of this analysis.Source:Hydrogen Council-Hydrogen in Decarbonized Energy Systems(2023)29Hydrogen Council,Baringa PartnersHyHyd dr ro og genen i in n D Dececa ar rb bo on ni iz zeded E En nererg gy y S Sy ys st temsemsEnEnd d o of f r re ep po or rt t30