Progress propelled by power of hydrogen
Supporting new offshore innovations that allow renewable electricity to create clean, renewable hydrogen will allow energy needs to be met and net zero targets reached, writes Benj Sykes of energy giants Ørsted
The Scottish Government’s ambition to generate 5GW of renewable and lowcarbon hydrogen by 2030 is a very positive signal
CLIMATE change is a defining challenge of our time and it's already having a clear impact on the ecosystems in our seas and oceans – the world clearly needs to reduce global carbon emissions by 50% towards 2030 to stay within a 1.5ºc increase in global warming.
Large scale renewable projects like Ørsted's Hornsea Three project or SSE'S Seagreen, will be instrumental to the UK and Scotland delivering on its net zero target, each project providing power to millions of homes each and limiting the negative consequences of climate change and the threat it poses to the environment.
Fossil fuel use in industry and transportation is one of the biggest obstacles to decarbonising the global economy. These two sectors account for more than a third of global greenhouse gas emissions; without a rapid re-imagining of how these sectors are fuelled, it will be impossible to constrain global temperature increase to less than 1.5°C.
Over the past decade, significant cost reductions in renewable energy have allowed its use to become more widespread, which in turn is driving decarbonisation through greater electrification. For example, batteries in cars are increasingly replacing the need for diesel or petrol driven engines. In buildings, high-efficiency electric heat pumps are delivering cleaner and less costly space heating. However, while these gains are valuable, the hard work of deep decarbonisation remains. Direct electrification is, quite simply, not feasible for many sectors such as heavyduty road transport, deep-sea shipping and aviation.
HOW RENEWABLE HYDROGEN CAN HELP US DECARBONISE
LARGE-SCALE and low-cost generation from wind and solar is opening up new pathways to achieve this decarbonisation. Renewable electricity can now be used to create clean, renewable hydrogen.
Hydrogen is currently produced almost exclusively from fossil fuels, in the main natural gas which involves producing hydrogen from methane while the carbon is released as CO2. At present, fossil hydrogen production accounts for about 6% of global natural gas and 2% of global coal consumption, and around 2% of all global energy related greenhouse gas emissions come from production of hydrogen. But renewable hydrogen is completely carbon free.
It is created by splitting water into hydrogen and oxygen through a process known as electrolysis. The hydrogen is collected and used, while oxygen is released as the by-product if there is no need for it locally. Renewable hydrogen can also be used to produce synthetic fuel ('e-fuels'), which can replace its fossilderived counterpart across many applications, including aviation and deep-sea shipping. At Ørsted, our vision is a world running entirely on green energy. Since commissioning the world's first offshore wind farm in 1991, we have been leaders in the quest to make this vast resource cost-competitive.
Now, building on renewable energy production from offshore wind, onshore wind and solar, we believe there is a path to establish and scale up production of renewable hydrogen and e-fuels. In this way, power-to-x technologies can deliver ‘indirect electrification'. And a good starting point is by converting existing hydrogen demand from heavy industry to demand for renewable hydrogen.
Crucially, delivering affordable, low-carbon energy for traditional industries will also help protect the many hundreds of thousands of skilled workers employed in these industries in regions such as Grangemouth, the Humber, Teesside and right across the UK.
SO HOW DO WE ACHIEVE THIS?
DEVELOPMENT of renewable hydrogen is ongoing, with more and larger electrolyser projects announced year by year.
To maximise the decarbonisation potential of this fuel, costs must be brought down through industrialisation and scale. We know this is possible, with the right framework conditions – because we have done it for the offshore wind sector.
But what else needs to happen to ensure renewable hydrogen can be delivered at scale? First is the need for further development of renewable energy generation at scale.today, costs of generating power from solar, onshore and offshore wind are lower than from new coal, gas or nuclear power plants. This is a game-changing enabler, making electrification a key driver for decarbonisation.
Access to low-cost renewable energy is a prerequisite for sustainable production of renewable hydrogen or e-fuels.
Hence, to enable these power-to-x technologies to expand, policymakers must ensure that renewable power generation can scale further as well. Second is creating demand for renewable energy and renewable hydrogen in particular. As with renewable electricity, the desired shift to renewable hydrogen needs to be supported through demand creation whilst the technology develops and scales up, bringing costs down to – or below – the costs for fossil-fuel based hydrogen.
To underpin this the industry will need measures to incentivise and support use of renewable hydrogen and e-fuels and in parallel, incentives to support the growth of demand for products from businesses using renewable hydrogen to ensure that early industrial adopters are rewarded, not disincentivized.
Finally, we have seen in the offshore wind sector that the technologies we need to decarbonise our economy can and will come down rapidly in cost, as long as they receive the right policy support in their early days allowing the local market to develop .
Governments play a huge role in this setting clear and ambitious long-term targets provides investment visibility for the private sector, which again drives innovation, cost reductions, and largescale deployment.
We've seen that in spades in offshore wind, where the right policy mechanisms have helped costs drop by two thirds in just a decade.
When governments set ambitious targets and enact clear policies, the private sector can and will further accelerate the build-out of green energy. And it's this kind of vision that we are seeing in Scotland and in the UK.
Now is the time for UK companies to innovate in the technologies that will put British companies at the forefront of the renewable hydrogen revolution – from more efficient electrolysers to stackable designs and high volume manufacturing that can follow the industrialisation and cost reduction route that offshore wind took.
Companies like Ørsted have been a key part of that cost reduction journey for offshore wind and are now wellplaced to assist with the development of renewable hydrogen and the end-to-end integration of renewable energy sources, renewable hydrogen production and supply to end-users.
Ørsted is involved in a number of renewable hydrogen projects and they demonstrate the large number of opportunities that hydrogen can create. In the Humber, we are working with Philips66 to develop the production of renewable hydrogen for use in their refinery.
In Copenhagen, we are developing a project that will produce renewable hydrogen for use in aviation and in shipping, working alongside an airport, an airline, shipping companies and others to progress the opportunity.
We are also working with a fertiliser producer in the Netherlands to work on the production of low-carbon fertiliser for agriculture.
All of these are opportunities that have the potential to be replicated easily in Scotland.
The Scottish Government's ambition to generate 5GW of renewable and low-carbon hydrogen by 2030 is a very positive signal with research suggesting that the industry could be worth up to £25 billion a year to the Scottish economy by 2045.
The good news is that there are exciting opportunities to realise this potential almost immediately through the Scotwind leasing round. The Covid19 pandemic has given us an opportunity to refocus and, if we make the right choices now, potentially accelerate our progress to a more sustainable, low-carbon future.