McKinsey & Co- Hydrogen: The next wave for electric vehicles?

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McKinsey & Co- Hydrogen: The next wave for electric vehicles?

Battery electric vehicles are making headlines, but fuel cells are gaining momentum—with good reason. Hydrogen could play a vital role in the renewable-energy system and in future mobility.

At the COP21 meeting in Paris in 2015, 195 countries agreed to keep global warming below 2 degrees Celsius above preindustrial levels. To reach this target, the world will need to cut energy-related carbon dioxide (CO2) emissions by 60 percent by 2050—even as the population grows by more than two billion people. This requires dramatic changes in our energy system: a strong increase in energy efficiency, a transition to renewable-energy sources and low-carbon energy carriers, and an increase in the rate at which industry captures and stores or reuses the CO2 emissions created by the remaining fossil fuels in use.

Two years after the Paris Agreement, at the COP23 meeting in Bonn, the Hydrogen Council—a consortium of 18 companies in the automotive, oil and gas, industrial gas, and equipment industries—presented its vision of how hydrogen can contribute to the ambitious climate targets. It considers hydrogen an enabler of the transition to a renewable-energy system and a clean-energy carrier for a wide range of applications. If serious efforts are made to limit global warming to 2 degrees, the council estimates that hydrogen could contribute around one-fifth of the total abatement need by 2050. This vision is ambitious but feasible if policy makers, industry, and investors step up efforts to accelerate the deployment of low-carbon technologies.

Hydrogen can play seven major roles in the energy transformation

Hydrogen is a versatile energy carrier and can be produced with a low carbon footprint. It can play seven major roles in the energy transformation, which span from the backbone of the energy system to the decarbonization of end-use applications (Exhibit 1):

• Enabling the renewable-energy system (1–3). By providing a means of long-term energy storage, hydrogen can enable a large-scale integration of renewable electricity into the energy system. It allows for the distribution of energy across regions and seasons and can serve as a buffer to increase energy-system resilience.
• Decarbonizing transportation (4). Today’s transportation sector depends almost entirely on fossil fuels and creates more than 20 percent of all CO2 emissions. Hydrogen-powered vehicles, with their high performance and the convenience offered by fast refueling times, can complement battery electric vehicles to achieve a broad decarbonization of transport segments.
• Decarbonizing industrial energy uses (5). In heavy industry, hydrogen can help decarbonize processes that are hard to electrify, in particular those requiring high-grade heat. Hydrogen can also be used in cogeneration units to generate heat and power for industrial uses.
• Decarbonizing building heat and power (6). In regions with existing natural-gas networks, hydrogen could piggyback on existing infrastructure and provide a cost-effective means of heating decarbonization.
• Providing clean feedstock for industry (7). Current uses of hydrogen as industry feedstock—amounting to more than 55 million tons per year—could be fully decarbonized. Hydrogen could also be employed to produce cleaner chemicals and steel, by being used as a chemical feedstock in combination with captured carbon and by being used as a reducing agent for iron ore.

Exhibit 1

Hydrogen’s role in the transportation sector is embedded in the system-wide vision

As described, hydrogen has a wide range of applications in the energy system (Exhibit 2), with its role for the decarbonization of the transportation sector among the most prominent ones. In the Hydrogen Council’s vision, in which hydrogen is deployed aggressively to limit global warming to 2 degrees, a third of the global growth in hydrogen demand could come from the transportation sector. By 2050, the members of the council believe hydrogen-powered fuel-cell vehicles could constitute up to 20 percent of the total vehicle fleet, some 400 million cars, 15 million to 20 million trucks, and around 5 million buses. In their scenario, hydrogen would play a larger role in heavier and long-range segments and hence contribute around 30 percent—higher than its share due to longer distances driven and lower fuel efficiency in these segments—to the total emission-abatement target for the road-transport sector.

In the council’s vision, hydrogen-powered locomotives could also replace 20 percent of diesel locomotives, and hydrogen-based synthetic fuel could power a share of airplanes and freight ships. In all, the transportation sector could consume 20 million fewer barrels of oil per day if hydrogen were deployed to the extent described.

Fuel cells could complement batteries to decarbonize transportation

Hydrogen and batteries are often portrayed as competing technologies, and batteries have received a lot of attention in recent years (“proton versus electron”). The relative strengths and weaknesses of these technologies, however, suggest that they should play complementary roles. Battery electric vehicles exhibit higher overall fuel efficiency as long as they are not too heavy due to large battery sizes, making them ideally suited for short-distance and light vehicles. Hydrogen can store more energy in less weight, making fuel cells suitable for vehicles with heavy payloads and long ranges. Faster refueling also benefits commercial fleets and other vehicles in near-continuous use. How the technologies relate will depend mostly on how battery technology will evolve and how quickly cost reductions from scaling fuel-cell production can be realized...snip MORE: https://www.mckinsey.com/industries.../hydrogen-the-next-wave-for-electric-vehicles

RELATED: The Hydrogen Council - HYDROGEN, SCALING UP – NEW ROADMAP LAUNCHES AT COP 23
NOVEMBER 13, 2017

The Hydrogen Council Key Members

The Hydrogen Council reveals first-of-a kind study showing hydrogen’s contribution as a key pillar of the energy transition
As global leaders gathered at COP 23 in Bonn, 18 key leaders in their industry verticals, united in the Hydrogen Council coalition, came together to launch first ever globally quantified vision of the role of hydrogen, developed with support from McKinsey. In addition to being a key pillar in of the energy transition, the study shows that hydrogen has the potential to develop US $2.5tn of business, creating more than 30 million jobs by 2050.

Read and dowload the full roadmap to learn more (PDF- 88 pages)

Taking the Hydrogen Council’s vision for hydrogen to the next level, the study entitled Hydrogen, Scaling up outlines a comprehensive and quantified roadmap to scale deployment and its enabling impact on the energy transition.

Deployed at scale, hydrogen could account for almost one-fifth of total final energy consumed by 2050. This would reduce annual CO2 emissions by roughly 6 gigatons compared to today’s levels, and contribute roughly 20% of the abatement required to limit global warming to two degrees Celsius.

On the demand side, the Hydrogen Council sees the potential for hydrogen to power about 10 to 15 million cars and 500,000 trucks by 2030, with many uses in other sectors as well, such as industry processes and feedstocks, building heating and power, power generation and storage. Overall, the study predicts that the annual demand for hydrogen could increase tenfold by 2050 to almost 80 EJ in 2050 meeting 18% of total final energy demand in the 2050 two-degree scenario. At a time when global populations are expected to grow by two billion people by 2050, hydrogen technologies have the potential to create opportunities for sustainable economic growth...more: http://hydrogencouncil.com/hydrogen-scaling-up-new-roadmap-launches-at-cop-23/