Industrialization of Water Electrolysis in Germany: Towards a GW Industry for a Successful Transition of the Energy Sector towards Renewable Energies

Transcription

1 Industrialization of Water Electrolysis in Germany: Towards a GW Industry for a Successful Transition of the Energy Sector towards Renewable Energies Christopher Hebling Steffen Kiemel 2, Franz Lehnert 1, Tom Smolinka 3, Nikolai Wiebe 3 1 E4tech Sàrl Fraunhofer-Institute für 2 Produktionstechnologie und Automatisierung IPA 3 Solare Energiesysteme ISE 4 NOW GmbH Mission Innovation Berlin, October 17 th, 2018

2 Study: Integrated Energy Concept 2050: Regulatory Framework for an Integrated Energy Concept 2050 and the Implementation of Sustainable Fuels 2

3 Energy Systems Fundamental Paradigm Shift Past Future Energy generation by fossile/nuclear energy carriers -> supply was following the demand Maximization of the Share of Volatile Renewable Energies -> Highly resilient energy systems Challenges No compromize in terms of supply security Economic feasibility 3

4 Defossilization of Our Energy Systems as Opposed to Decarbonization Climate and sustainability targets are key topics on the global political agenda Energy supply causes major parts of anthropogenic climate change Clear target energy systems with dramatically reduced fossile CO 2 emissions Powerful tools & models needed for comprehensive optimization of energy system transformation pathways A technical carbon cycle in analogy to the natural carbon cycle (Photosynthesis, breathing) will be needed 4

5 Photovoltaic Electricity in Power Purchase Agreements January December 2017 Latest PPA in Germany in April 2018: 38 USD/MWh Gas GT Gas CC Coal Nuclear 53 USD/MWh 38 USD/MWh 19,7 USD/MWh 17,8 USD/MWh 2017* Source: Renewable Energy Auctions 2016, IRENA 5

6 Onshore-Wind Electricity in Power Purchase Agreements January December 2017 Gas GT Gas CC Coal Nuclear 38 USD/MWh 27 USD/MWh 17,7 USD/MWh 2017* 2018* Source: Renewable Energy Auctions 2016, IRENA 6

7 Renewables are growing: Global Wind and Photovoltaic Installations break 1TW Milestone (08/2018) Source: IRENA, 2018, /dashboard/ 7

8 Total GHG emissions [Mio. t CO2-equiv] Industrialization of Water Electrolysis in Germany IndWEDe Motivation ( Germany has ambitious goals for Green House Gas reductions - 55 % in and - 95% in 2050 Water electrolysis and Power-to-X technologies are crucial for the defossilization of the energy system What needs to be done now to start market scale-up of WE Recommendations for the National Innovation program hydrogen and fuel cells, NIP 2 (1) Development of German GHG emissions and target values until 2050 (The Energy Concept of Germany) 2 1) Nationales Innovationsprogramm Wasserstoff- und Brennstoffzellentechnologie 2 Henning/Palzer: What will the energy transformation cost?, Report Fraunhofer ISE, November

9 German GHG emissions Sectorial development and targets Electricity (Target: -92,5%) Industry (Target: -81%) Residential/tertiary (Target: -92,5%) Transport (Target: -92,5%) Agriculture (Target: -60%) Target significantly missed 9 Graphs: G. Rosenkranz, Agora Energiewende (2017) & Umweltbundesamt (2016)

10 What does Sector Coupling Mean? Today: Each sector uses dominating energy carrier Building (low T heat): Fuels (Natural gas, oil, biomass) Transportation: Liquid Fuels (Gasoline, Diesel, biogenic blend-ins) Industry: Fuels (Coal, natural gas, oil) In the future: Options of sector coupling Direct useage of power: Electrification of sectors which are now dominated by other energy carriers Hydrogen: Conversion of power into hydrogen by means of water electrolysis and the use in different sectors (transportation, chemistry) Synthetic fuels: Synthetic hydrocarbons by means of thermochemical conversion of hydrogen and CO 2 for various sectors (PtX) 10

11 German Energy Demand of Today Composition of Final Energy Data source: Energiedaten, Gesamtausgabe, BMWi, 02/

12 Development Status and Potential of Water Electrolysis Water electrolysis landscape 2016/17 Key features: Sold EL capacity: ~100 MW/a Global sales: Mio /a Direct employees: ~1.000 Possible ramp-up in manufacturing capacity by 2020: ~ 2 GW How do electrolysis system manufacturers work today? Standardized stack platforms Single order production Project-by-project business without stock-keeping Possible production volume in 2020 per manufacturer, provided that corresponding market demand exists 12

13 Stack life time Black bars indicate the standard deviation. Electr. energy demand Development Status and Potential of Water Electrolysis Electrical energy demand and stack life-time Feedback partially contradictory (respondents applied different system boundaries) PEMEL higher than AEL adjusted in 2050 HTEL shows better (electrical) efficiency But steam is required (ca. 200 C) No substantial improvement in 2030/50 Stack life-time in operating hours Uncertainties (see standard deviation) Ambitious expectations in this survey h/a (full load) Missing confirmation from literature Stack replacement required over total life-time 13

14 Active cell area Black bars indicate the standard deviation. Current density Development Status and Potential of Water Electrolysis Current density and active cell area Important KPI with direct impact on CAPEX Current density will at least be doubled for all three technologies by 2050 PEMEL remains in the lead Values for AEL are near those of HTEL Technology differences! AEL < 10 m² PEMEL < 1 m² HTEL < 0,1 m² Combination of current density and cell area different stack designs 14

15 Cost breakdown Black bars indicate the standard deviation. CAPEX Development Status and Potential of Water Electrolysis Capital expenditure and cost break down Low CAPEX still main selling point! Price pressure on the market with tenders for large systems Future cost parity between PEMEL and AEL Ambitious CAPEX projection for HTEL Potentially low cost, but high uncertainty Feedback in agreement with literature Stack dominant, but less than 50 % Power supply 2 nd major cost contributor Stack share increases with system size Similar results for AEL systems Insufficient responses for HTEL systems 15

16 Future Hydrogen Demand in Germany Scenario based analysis with techno-economic optimisation REMod-D Renewable Energy Model Deutschland Techno-economic optimisation based on comprehensive simulation Minimise total annual cost (invest, operation, maintenance) Electricity generation, storage and end-use Fuels (including biomass and synthetic fuels from RES) Comply with German CO 2 reduction targets in any year Inclusion of all consumption sectors and energy sources Exact hours Modeling Mobility (ICE, BEV, FCEV, conventional fuel mix) Heat (buildings, incl. storage and heating networks) Processes in industry and tertiary sector 16

17 Electrolysis capacity [GW] Installed RES capacity [GW] Future Hydrogen Demand in Germany Exemplary results for the central case (S3: EL mix) Substantial expansion of wind and solar to achieve CO 2 reduction target in GW installed wind and solar Electricity demand TWh (depending on the scenario) BUT: Results sensitive to import settings for electricity or fuels H 2 from electrolysis and further derivatives essential in all scenarios S3 (EL mix) Installed EL capacity [GW] Ø installation rate [GW/a] 44 (7-71) 3.4 ( ) 213 ( ) 6.4 ( ) Scenario without H 2 import to Germany 18

18 Installed electrolysis capacity [GW] Expansion corridor Future Hydrogen Demand in Germany Development of installed water electrolysis capacity to achieve CO 2 reduction targets of 2050 Dynamic operation (S4) HTEL scenario (S1) (high efficiency) Import of fuels (S0-95) 19

19 Plausible market roll-out in Germany [ MW/a ] To Reach 2030 Targets, Roll-out Needs to Start Now! And the industry needs a clear framework to invest. 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Market activation program sets reliable framework for investments Initial scale-up and cost reductions < 20 MW/a added < 100 MW installed MW/a added 1-2 GW installed 1-5 GW/a added > 10 GW installed 23

20 /kg H 2 Selected Measures for Market Activation A combination of actions is needed! 10 H 2 production cost via water electrolysis (KPIs 2017 at 15,4ct/kWh) /t CO 2 compensation (gas grid injection) 2 Exemption from grid fees 3 Exemption from levies and taxes 4 50 % CAPEX subsidy, max. 400 /kw Flexibility in sourcing green electricity 5 Combination of both measures Measures for market activation 2 H 2 for fuel cell vehicles 6 Competitive H 2 production costs in Large industrial H 2 users in industry 7 target markets H 2 injection in gas grid KPIs of scenario S3 2017, range results from 2,000 to 3,000 full-load hours 2 Compensation payments for CO 2 savings (204g CO 2 -Äq/kWh LHV natural gas) Comparison based on substitution LHV of natural gas with hydrogen (33,3kWh/kg LHV, assumption 100% CO 2 free hydrogen) 3 2,06ct/kWh electricity grid fees (Bundesnetzagentur/Bundeskartellamt (2016): Monitoringbericht 2016, industrial consumers with 24 GWh/a) 4 8,55ct/kWh electricity levies and taxes ( BDEW Strompreisanalyse 2018, industrial consumers up to 20 GWh) 5 If electrolyser operations are not coupled to PV- and Wind generation profiles or to the negative residual load in the network, 8,000 full load hours (instead of assumed 2,000-3,000) per year become possible, implying that (during a transition period) guarantees of origin can be provided from, e.g., hydro power plants. 6 Assumption: Competitive hydrogen prices at the pump 6 /kg (Diesel passenger car 5l/100km at 1.20 /l, fuel cell passenger car 1 kg H2 /100km), of which 3 /kg deducted for distribution and station costs. Prerequisite: Roll-out of fuel cell vehicles and refuelling stations and continued tax exemption for hydrogen as a fuel. 7 Cost of steam methane reforming at 100t/day hydrogen production based on FCHJU Study on Development of Water Electrolysis in the EU Substitution of natural gas with hydrogen based on LHV, natural gas prices private customers in Germany ,5ct/kWh, large customers 3,4ct/kWh (Eurostat), LHV hydrogen: 33,3kWh/kg; Results in a value of hydrogen in gas grid between 1,13 and 2,16 /kg 25

21 Central Finding of the Study: Water electrolysis is ready for broader market roll-out Deployments of 1-5 GW/a from 2030 are required to reach CO 2 targets in Germany Parameter Unit Installed electrolysis capacity [GW] 44 (7-71) 213 ( ) Avg. deployment (relative to 2017) [GW/a] 3.4 ( ) 6.4 ( ) Todays electrolyser industry and markets are small and fragmented Water electrolysis as a technology is generally available Up-scaling of production is feasible within a few years Critical manufacturing steps were not identified To reach technical KPIs 2030/50 requires continuous research and development Scale and volume effects can only be reached through market activation 26

22 Fotos Thank you for your kind attention! Fraunhofer-Institut für Solare Energiesysteme ISE Dr. Christopher Hebling This study was commissioned by the German Federal Ministry of Transport and Digital Infrastructure. 28

23 Summary & conclusions Transformation of energy systems in line with GHG emission reduction targets are in principle technically feasible Renewable energies (solar, wind) become dominant and importance of electric energy increases electricity demand doubles Increased conversion efficiencies and consumption reduction important Large scale hydrogen production starting in the mid of the 2020s About 40% of Renewable Electricity in Power-to-X Applications 29 Coupling of sectors electricity use (directly, indirectly) for heat and mobility Large scale conversion of renewable electricity into synthetic energy carriers (hydrogen, liquids, chemicals, methane) needed for transportation Transformation cost competitive if CO 2 emissions appropriately penalized New market frameworks to stimulate flexible load and generation -> level playing field Comprehensive, effective CO 2 pricing covering all energy sectors Global transport and trade is required

24 Food for thought Policy decisions of the past have triggered cost reductions in wind & PV Renewable electricity can become the world s primary energy source Hydrogen is the logical link between green electricity and green fuels But: We need a paradigm shift in regulatory frameworks, so home-made renewable hydrogen can compete with fossil fuels on the market Hydrogen vs. synthetic fuels? Given the status quo, synthetic fuels could be a solution with low barrier to adoption For debate: Will we produce fuels to suit our legacy fleets, or will we eventually adopt those technologies that suit the lowest cost fuels we will have available? 30 3