Some notes on white paper below (24 Nov)

Topics:
* future H2 market in EU
* future green H2 supply costs

I did not dig into demand costs (assumption on future H2 market) & policies tools (assumptions of all topics)

https://www.euractiv.com/section/energy/news/trade-bodies-team-up-to-grow-europes-green-hydrogen-sector/

Future green H2 market

Within "near term" (?)
540 TWh- 14 MtH2/yr
(by converting with HHV)

19% of demand from assumed total market

* steel, chemicals, diesel(refineries)
* maritime & aviation synfuels
* H2 fuel cell for aviation & trucks
* energy storage
* industr heat

For each application/ type of use

"Transition speed" will depend on 6 barriers:
* RES prod & grid
* H2 prod, incl electrolysers
* sector production capacity
* investment cycles
* infrastructure
* regulation & permitting

speed --> two timelines:
"Business as usual"
"Accelerated"

Future green H2 supply costs

Green H2 investments in Europe

1200 TWh of green H2 --> total investments EUR 545-690 bn, out of which:
* EUR 90-105 bn in electrolysers
* EUR 250-300 bn in RES capacity
* EUR 30-60 bn in transport
* EUR 175-225 bn in end uses

Current green H2 costs EUR 4-5/kgH2

Target EUR 1-2/kgH2

Feasible in 5-10 years

13% learning rate & 2x40 GW electrolyser target
CAPEX EUR 1015/kW -> EUR 330/kW

If renewable electricity costs EUR 20/MWh + electrolyser prod capacity 1100 TWh
--> green competes with grey H2

Drivers to Future green H2 costs reduction

* electrolyser tech (CAPEX reduction -> learning rate + more prod cap, efficiency, lifetime)
* cheap RES prices & +full load hr
* oxygen & heat byproduct sales
* "well-planned" infrastructure (local prod, pipelines when needed, storage)

Future green H2 costs reduction

EUR 5.1/kgH2 --> EUR 1.7/kgH2

electrolyser tech --> -EUR 1.3/kgH2 / 38% cost reduction

cheap RES & +full load hr --> -EUR 1.1/kgH2 / 32%

oxygen & heat byproducts sales --> -EUR 0.1/kgH2 / 3%

"well-planned" infrastructure --> -EUR 0.9/kgH2 /26%

Grey H2 costs

Today EUR 1-2/kgH2

No mention to NG prices

Yes to mention to CO2 prices

Today CO2 prices at EUR 25/tCO2 --> additional cost EUR 0.3/kgH2

If gap today of green vs grey is EUR 3/kgH2--> CO2 prices for cost parity at EUR250/tCO2
If future gap is 0.7 -> EUR 58/tCO2

Europe: green H2 projects announced (at moment of doc publication): 1.3 MtH2/yr
Vs Australia 1.5 MtH2/yr

Europe also leader of electrolyser manufacturing
* 25-30% global market share in electrolyser production
* has global leaders in electrolyser tech

Suppose 1100 TWh green H2
+ efficiency 70%

--> 1570 TWh RES-electr needed
+ electrification needs

According to doc, no issue on res electricity potential in Europe
--> 110 EJ/year = 30556 TWh
--> large wind and hydro resources

RES electr capacity to increase from
350 GW
to 750-1000 GW

My question: "growth needed for 65% target renewables penetration" --> includes increasing electrification trends? Or only current electr demand?

4 policy action areas for Europe

* establish lead market
* mobilise massive investments, incl RES
* accelerate innovation
* enabling policies and standards