The development of renewable hydrogen in the European Union will require a strategic framework and additional political support focused on rapid cost reduction, says Agora Energiewende, in a report published on Thursday 8 July.
According to this think tank, the reduction in the price of renewable electricity (the main cost element of renewable hydrogen) will have to be accompanied by a reduction in the cost of electrolysers, which will require a predictable and stable demand for hydrogen, allowing electrolyser manufacturers to develop their production and thus make economies of scale.
Yet, “CO₂ prices in the 2020s (even if they were to reach €100-200 per tonne) will not be high enough to deliver stable demand for renewable hydrogen, underscoring the need for a hydrogen policy framework”, the report says.
Among the policy instruments envisaged, the report mentions: - carbon contracts for difference in industry; - a quota for aviation; - hydrogen supply contracts; - regulations to ensure the integration of energy systems and the rapid growth of renewable energy.
Agora Energiewende also believes that renewable hydrogen production should “be channelled” to a limited number of applications, namely: steel, ammonia and basic chemicals production, long-haul aviation, maritime shipping, long-term electricity storage, and existing district heating systems.
See the report: https://bit.ly/3dUlDPe (Original version in French by Damien Genicot)