9.3.1 Main applications and sources of production
Hydrogen use is limited across all net-zero scenarios, although this masks the replacement of hydrogen in the oil and gas production sector by uses elsewhere (see Chapter 6). Most of the new hydrogen use appears after 2040 in net-zero scenarios and is concentrated in industry and heavy-duty and rail transport.
The need for negative emission activities results in biomass gasification becoming the main source of hydrogen production, well ahead of electrolysis for example (Figure 9.5). Although natural gas reforming is virtually the only source of hydrogen today and remains the main source in the reference scenario, biomass takes off rapidly after 2030 to represent more than 90% of H2 production in net-zero scenarios. This overall hydrogen production level is also much more substantial in these scenarios, almost four times what it is in REF and CP30.
Figure 9.5 – Main sources of hydrogen production #
9.3.2 Sensitivity analysis
In these results, hydrogen remains marginal across the economy. Given that this vector is difficult to model with the major uncertainties that remain, and that hydrogen may provide advantages for a wide range of domain-specific applications, from long-term electricity storage to niche applications, a sensitivity analysis was performed to explore different variations of the NZ50 scenario in this respect. The two alternative scenarios are set out below:
- H2a: higher penetration of hydrogen in buildings (5% as a H2-gas blend over the total), industry (30%) and transport (30%), as well as for synthetic fuel production (10% of all transportation fuels)
- H2b: higher penetration of hydrogen in buildings (5% as a H2-gas blend over the total), industry (30%) and transport (30%) sectors, as well as for synthetic fuel production (10% of all transportation fuels), and with a minimum of 50% of hydrogen production derived from electrolysers
Both alternative scenarios impose a more significant penetration of hydrogen across sectors. However, while H2a does not constrain the source of hydrogen, H2b also forces electrolysis to become a dominant production method through large enough cost reductions (or any other driver).
As expected, the final consumption of hydrogen increases by similar amounts in both alternative scenarios compared to NZ50. For 2030, consumption quadruples over NZ50 levels, while in 2050 and 2060, levels are twice as high as NZ50 for both H2a and H2b.
In the building sector, a quadrupling of 2030 levels over NZ50 results in very small increases in absolute terms. These levels are also higher than in NZ50 in 2050 and 2060 for both H2a and H2b, although H2b presents lower levels than H2a. In industry consumption, H2a and H2b levels are similar across time and both are much higher than NZ50. The increase over NZ50 is around 200% for 2030, at from 3% to 10% of total energy consumption for the sector. For 2050, hydrogen consumption rises from 16% in NZ50 to 20% for H2a and H2B, a level that is similar in 2060 (from 17% to 20 %).
The most significant changes occur in transport. Here again, H2a and H2b both present similar consumption levels across time, but the comparison with NZ50 yields very large increases. In 2030, where hydrogen is virtually inexistent in NZ50, levels in alternative scenarios reach over 170PJ, which is triple electricity’s contribution for that year and almost 6% of total energy consumption. In 2050, hydrogen consumption in H2a and H2b is more than four times that of NZ50, at 22% of the total vs. 5%, similarly to 2060, as hydrogen consumption in the alternative scenarios approaches 600Pj or 24% of the total. Most of the increase for 2030 is for merchandise transport and synthetic aviation fuel, and to a lesser extent for hydrogen consumption in rail and maritime transport.
The increase in transport over the longer term is more substantial: synthetic fuels reach 40% of total consumption for aviation in 2050, while all transport subsectors see their use of hydrogen increase. In road transport as a whole, hydrogen fuels 40% of needs.
Hydrogen production explodes in 2030 compared with NZ50 (Figure 9.6). In H2a, less than half comes from biomass and the rest is mostly natural gas reforming, both with CCS. Electrolysis continues to be negligible for H2a over time and, while biomass increases, feedstock availability maintains the proportions of biomass and gas reforming up until 2060 at about 40% and 60% respectively .
With a different pricing scenario for electrolysis, H2b results in this respect are completely different: while the total quantity produced is similar to that in H2a. As the consumption profiles discussed above would lead one to expect, electrolysis more or less replaces natural gas reforming’s share ((Figure 9-6). Accordingly, although hydrogen production increases by similar amounts in both alternative scenarios compared to NZ50, biomass availability prevents increases of BECCS hydrogen production much over NZ50 levels, resulting in almost all the rest being supplied either by natural gas reforming (H2a) or by electrolysis (H2b). This also implies that unless electrolysis costs are significantly brought down, natural gas reforming will remain cheaper and dominate hydrogen production in spite of emission-intensive gas reforming and the need for additional GHG sequestration.
Figure 9.6 – Main sources of hydrogen production – alternative scenarios #
Nevertheless, overall residual emissions (and, correspondingly, additional capture and sequestration efforts beyond CCS at the source for methane reforming) are lower in both alternative scenarios for 2050, at between 112 and 116 MtCO2e instead of NZ50’s 125 MtCO2e. Both scenarios resort to DAC in amounts similar to NZ50. Therefore, using more hydrogen throughout the economy does not result in more negative emissions from its production, which would allow more residual emissions from economic sectors: biomass availability prevents this development (see section 9.2). More hydrogen helps decarbonize efforts in applications where it is particularly difficult, as in some industrial and transport applications.
- Increasing hydrogen penetration leads to increased use in most transport applications, as well as some industrial sectors.
- From a GHG emissions perspective, biomass availability (for BECCS production) and the cost of electrolysis will be determining factors in the emissions profile of hydrogen use, should this reach more substantial levels than NZ50 results suggest.