Commentary: Offshore wind and hydrogen for industry in Europe
a reprint from IEA, 2018-06-16
Fossil fuels currently play a critical role in industry, not only as sources of energy, but also of feedstocks and process agents. Clean electricity could provide a sustainable alternative, but hurdles remain – particularly in terms of costs.
In Northern Europe, offshore wind is showing potential to provide significant amounts of clean power to industry, with generation costs possibly falling to the range of €55 to € 70/MWh.
This increasingly affordable renewable electricity strengthens the potential for cost-effective replacement of fossil fuels by electricity in industry. However, the continuing cost gap with the direct use of gas or coal to generate heat limits this potential to those electric technologies that are at least twice as efficient as fossil fuel uses. For now, a complete shift would require carbon prices at levels up to € 150 per tonne, a level even higher than projected for 2040 in the World Energy Outlook Sustainable Development Scenario (SDS).
Another realistic first step towards accelerating sustainable energy in industry involves hydrogen produced from clean power via electrolysis from water, directly substituting for hydrogen produced from fossil fuels. Hydrogen is already used in refineries to make oil products cleaner, and in the chemical industry to produce methanol and ammonia, a basic constituent of nitrogen fertilisers. It could also potentially be used in steel making to sharply reduce CO2 emissions. Moreover, storable and transportable chemicals and fuels incorporating renewable-based hydrogen (significantly easier to ship and store than diatomic hydrogen) may be imported from areas with better renewable resources, also at lower costs.
Today, hydrogen production in Europe is mostly based on natural gas reforming, but this results in significant CO2 emissions. Emissions could be reduced by using carbon capture and storage, at lower costs than from electrolysis run on power from offshore wind (unless future gas prices exceed expectations). Continue reading...
Fossil fuels currently play a critical role in industry, not only as sources of energy, but also of feedstocks and process agents. Clean electricity could provide a sustainable alternative, but hurdles remain – particularly in terms of costs.
In Northern Europe, offshore wind is showing potential to provide significant amounts of clean power to industry, with generation costs possibly falling to the range of €55 to € 70/MWh.
This increasingly affordable renewable electricity strengthens the potential for cost-effective replacement of fossil fuels by electricity in industry. However, the continuing cost gap with the direct use of gas or coal to generate heat limits this potential to those electric technologies that are at least twice as efficient as fossil fuel uses. For now, a complete shift would require carbon prices at levels up to € 150 per tonne, a level even higher than projected for 2040 in the World Energy Outlook Sustainable Development Scenario (SDS).
Another realistic first step towards accelerating sustainable energy in industry involves hydrogen produced from clean power via electrolysis from water, directly substituting for hydrogen produced from fossil fuels. Hydrogen is already used in refineries to make oil products cleaner, and in the chemical industry to produce methanol and ammonia, a basic constituent of nitrogen fertilisers. It could also potentially be used in steel making to sharply reduce CO2 emissions. Moreover, storable and transportable chemicals and fuels incorporating renewable-based hydrogen (significantly easier to ship and store than diatomic hydrogen) may be imported from areas with better renewable resources, also at lower costs.
Today, hydrogen production in Europe is mostly based on natural gas reforming, but this results in significant CO2 emissions. Emissions could be reduced by using carbon capture and storage, at lower costs than from electrolysis run on power from offshore wind (unless future gas prices exceed expectations). Continue reading...