STRATEGIC RESEARCH & INNOVATION AGENDA …...IPPP. The starting point is that Europe enjoys leadership position in key areas of the value chain, but that this leadership position is

HE H2 Slides PackHydrogen Europe – Technology Roadmaps – Summary Pack

TECHNOLOGY ROADMAPS FULL PACK

September 2018

STRATEGIC RESEARCH & INNOVATION AGENDA

Introduction

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Frans Timmermans

Executive Vice President of the European Commission

Responsible for Europe’s Green Deal

“Hydrogen could be a huge opportunity for our economy”“It is not that difficult to use gas infrastructure to import [green] hydrogen using gas infrastructure”“we need to protect our industries and […] help them free themselves from fossil fuels, for example when hydrogen is used in the manufacturing of steel“

FCH JU Mid term review: « The choice of a Joint Undertaking as instrumentcontinues to ensure good alignment with both policy and industrial objectives. TheIEG is of the view that Europe's competitive position would be less favorable withoutthe activities of the FCH 2 JU”Strategic Forum for IPCEI:

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Hydrogen enables the decarbonization of all major sectors in the economy

Hydrogen is not simply a potential contributor to solving the challenges posed by the energy system transition, offering a future solution with a number of advantages, particularly when used in fuel cells. Hydrogen is a solution without which Europe cannot achieve

its 2050 goals on GHG emissions reduction

Projections for Europe indicate that 5 million vehicles and 13 million households could be using hydrogen by 2030, while a further 600kt of hydrogen could be used to provide high grade heat for industrial uses. In this scenario, hydrogen would be abating 80Mt CO2 and account for an accumulated overall investment of $62B (52B€) and 850,000 new jobs.

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Progress achieved, but challenges remainThe work of the FCH JU over the past decade has brought hydrogen to the brink of widespread deployment, but market failure and fragmentation prevent clean hydrogen from reaching their full potential as the missing link in an integrated, sustainable and clean energy system.

• A number of technologies/applications do not exist yet or are not mature enough. For these applications, further Research & Innovation (R&I) is necessary to progress in Technology Readiness Levels (TRL).

• Where R&I does take place (n.b. outside of the context of the current FCH JU) it is fragmented between various Member States and isolated companies

• For technologies/applications that are, technologically, ready for deployment, they face different challenges: • Hydrogen solutions remain more expensive for a good part due to the absence of volume (need for improved

Industrialisation and Manufacturing Readiness Levels);• Unlike other technologies there is no first mover advantage: the first mover is not able to get such a market advantage where

future profits can compensate for early losses;• The deployment of hydrogen applications is usually part of a broader systems involving other hydrogen applications and/or

other sectors therefore requiring a large coordination effort;• Substantial R&I effort needed to further improve efficiency, cost, durability and manufacturability and • Coordinated roll-out and deployment of comprehensive systems, covering clean hydrogen production, transport and

distribution and finally, end-use applications is required

• It is very rapidly becoming necessary to transport, store and distribute large quantities of clean hydrogen

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Progress achieved, but challenges remain

In addition to these core challenges, a number of systemic (or horizontal) challenges further exacerbate the difficulties presented above and/or risk to derail the progress already achieved.

• RCS barriers, most notably the lack of technical regulations and/or accepted standards which prevent large scale, international deployment of standardised products.

• Safety of FCH technology is essential to building the confidence needed for widespread take-up

• Knowledge management and knowledge transfer, human resource developments and trainings are all necessary components to ensure that deployment takes place concomitantly in different sectors of the economy at various levels (from technicians to CEOs), in public and private entities.

• The differences between advanced countries and those which lag behind risks creating unsurmountable gaps in technological deployments, regulatory frameworks, level of knowledge and public acceptance.

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Problem definition

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Visions and ambitions of Clean Hydrogen for Europe partnership

Clean Hydrogen for Europe’s main goal is toenable European hydrogen technologies (matureand developing) to live up to their potential as themissing link in achieving a sustainable anddecarbonised energy system, fully integrated withconsuming sectors, in particular those which arehard to electrify). Our common vision for thepartnership is that it would accelerate thedevelopment of Clean Hydrogen technologies tothe point where market and policy mechanismscan take over and continue deployment in a waythat allows them to have a significant contributionto European climate, environmental and economicobjectives. The partnership would achieve thisgoal by leveraging technical and financialresources from both private and public sources inpursuit of clearly defined objectives fully in linewith the policies of the EU.

A leverage effect which should go well beyond theleverage factor of similar programmes

Intervention logic of the IPPP on Clean Hydrogen for Europe

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All activities of the partnership should aim to maximise the leverage effect of the programme by ensuring that technical and financial resources from both the private sector are directed towards thepolicy objective pursued by the programme. This entails incentivising (even) more private R&D investment as well the capitalisation of expertise held by private actors to fulfil tasks within the remitof the IPPP (e.g. on annual programme implementation and development, RCS, Safety, etc.).

General objectives of Clean Hydrogen for Europe

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GO1: Accelerate the commercial readiness

of nearly zero GHG emission hydrogen-based technologies across energy, transport, building and

industrial end-uses

GO2: Enable at scale deployment capacity

for key parts of the clean hydrogen value chain

GO3: Ensure a safe and frictionless deployment of Clean Hydrogen

technologies

The central objectives of the partnership, GO1 and GO2 are tobe implemented through the IPPPs core task of designing andimplementing annual and multi-annual programmes whichoperationalise our strategic research and innovationagenda. It is particularly in this area where the FCH 2 JU hasdemonstrated its highest capacity to deliver meaningful,positive, results in the past financial period and we have theconfidence that the continued partnership structure will buildon this capacity and deliver even higher quality innovationprojects.The core of the innovation programme should be structuredalong three, equally important, pillars:• hydrogen production,• distributions and• end use.Within these pillars, seven specific objectives are to bepursued. The specific objectives within each of these pillarsare, in turn, broken down in clearly defined, concrete,operational roadmaps. Each of these roadmaps is presentedin detail in the SRIA.In addition to working within each of these pillars, asexplained in the problem definition, mass deploymentrequires coordination action to be taken at system level. As aresult of this, an additional horizontal objective (SO8: H2Valleys) will aim to lay the groundwork for integratedhydrogen ecosystems combining multiple applications acrossthe different pillars.

Beyond the key environmental impacts resulting fromdevelopment of clean hydrogen applications (GO1), the newIPPP should deliver benefits for Europe in terms of industrialpolicy, supply chain development, jobs and value creation.This general objective is mainly operationalised by SO9:Supply chain support and by industrialisation actions, but inreality, it will be indirectly achieved by the implementation ofall other specific objectives, as European capacities are anunderlying element behind all activities envisioned by theIPPP.

The starting point is that Europe enjoys leadership position inkey areas of the value chain, but that this leadership positionis threatened by investments being made in other regions ofthe world. The new IPPP should act to strengthen Europeanvalue chains by ensuring the technological leadership of thebuilding blocks of the hydrogen value chain. This can be done,for example, by supporting the continuous improvement ofthe performance (durability, efficiency, resilience, lifetime) ofkey building blocks along the value chain, as well assupporting cost reduction through research into, for example,the replacement or reduction of the need for expensive andraw materials such as platinum.

In addition to the core challenges tackled through theachievement of GO1 and GO2, a number of systemicchallenges further exacerbate the difficulties associated withmass market commercialisation of hydrogen basedtechnologies and/or risk to derail the progress alreadyachieved. GO 3 aims to tackle these challenges by enablingthe IPPP to pursue specific objectives aimed at:• Proactive communication on the importance of Clean

Hydrogen technologies and dissemination of the results ofthe programme, ensuring that breakthroughs areimmediately taken up by the wider market.

• Knowledge management which inter alia will ensure thatannual programmes reflect the realities observed on themarket and adapt to growing needs and changingcircumstances,

• RCS coordination ensuring a frictionless deployment ofthe technologies ready for commercialisation

• Embedding a safety culture into all activities performed,ensuring that project implementation and subsequentdeployment is done safely and without incidents whichmay delay or derail roll-out.

• Regional and International cooperation which addressesgeographical differences, enabling (i) penetration of cleanhydrogen technologies across the territory of the EU, in away that makes best use of capacities and resources ofeach region and (ii) the propagation of knowledgeinternationally.

Specific objectives of Clean Hydrogen for Europe

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The Strategic Research & Innovation Agenda of Clean Hydrogen for Europe builds on success of the FCH2 JU

A series of technology/applications have been broughtto technological maturity with the support of the FCHJU. For example, passenger cars, vans, materialhandling and domestic and commercial hydrogenburners are now ready (or expected by be ready soon)for mass commercialisation. While technologicalbuilding blocks should still be subject to improvement,no additional support for demonstration activities isrequired for these applications in the next financialperiod. For these applications, it is time that themarket, industrial players and other policy instrumentsto take over and continue (mass) deployment.

The progress achieved in cars and buses should now bereplicated in other transport applications such astrucks, ships and aviation.

As regards fuel cells (FC) for power production(stationary CHP), the relevant FC technology has beensteadily demonstrated by FCH 2 JU projects in realinstallations. In particular, FCs have shown greatpotential for residential micro-CHP which allow usersto produce much of their own electricity, heat and hotwater. Technology leaders in this sector (most of themEU heating companies) are approachingcommercialisation following extensive field trials ofapproximately 3800 units of installed micro-CHP FCsystems. As regards the larger (industrial size)demonstrations supported by the FCH JU have proventhe viability of this application. In this field, maturity, asdescribed above, is not far off.

InstrumentsSeveral instruments applicable to all pillars are to be deployed in order to maximise the benefit of the programme and ensure a strategic roll-out of clean hydrogen technologies which balance future needs with the impetus to deliver tangible results on the short and medium turn

Strategic research challenges which focus on the long-term development of low TRL, yet key and promising technologies whose development will take several years and will require inter alia long-term consortia performing basic theoretical and experimental research.

Research Actions will also focus on relatively low TRL (4-6) applications, but whose development is achievable within a shorter time-frame

Innovation Actions, which aim to achieve the incremental development (and demonstration) of clean hydrogen applications which have not yet reached technological maturity but which are expected to do so by the end of (or shortly after) the intervention. Innovation actions include actions which aim to strengthen the capabilities of mature clean hydrogen applications in terms of efficiency, durability, functionality, etc.

Flagships whose main role is to demonstrate the viability of clean hydrogen solutions at scale (large-scale hydrogen production must be achieved in order to reach competitive hydrogen prices of 2 to 3 euros per kg, a sufficient amount of hydrogen must be produced to economically justify retrofitting an existing gas pipeline into a dedicated hydrogen pipeline and infrastructure system).

Hydrogen Valleys which seek to deploy, in a coordinated manner deployment of entire systems which integrate all three pillars, proving the technical and economic readiness of a hydrogen ecosystem, including production, distribution and storage, and final use in transport and stationary applications.

Industrialization Action aimed at enhancing the manufacturing and scale-up capacity of European clean hydrogen supply chains. Such actions have a strong component for SMEs, which are best placed to take advantage of the opportunities offered by new technologies and grow by creating new jobs requiring advanced skills.

Cross Cutting actions which seek to address horizontal issues which risk delaying commercial roll-out, such as regulatory issues, standards, training and education and, of course, safety aspects

TRL 2-3 100% 100%

TRL 3-6 70% 100%

TRL 5-8 50% TBD

TRL 7-8 30% TBD

TRL 7-8 30% TBD

TRL 2-8 30%-100%* 30%-100%*

n/a 70%-100%* 100%

Note: * - funding rate will depend on the TRL level of the particular project being supported.

TRL level Funding rate for industry

Funding rate for research institutions

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At European level EU public-private effort of €8.7BN can trigger the €52BN investment needed to realise this vision

The €8.7BN programme might in 70% be funded through existing or planned EU support funds like CEF Transport and Energy or the ETS Innovation Fund (mostly market deployment actions). The remaining 30%, i.e. EUR 2.6 BN would be financed through the next IPPP on Hydrogen (Clean Hydrogen for Europe). As is expected in case of a public-private partnership the contribution will be shared equally by industry (and research) and the European Commission.

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The coordination of several funding and financing streams will be vital to maximise the impact of this funding programme

Consultation of other sectors & Complementarities with other partnerships.

2ZERO (COP)

Clean Aviation (IPPP)

Transforming EU rail system (IPPP)

Waterborne (?)

Batteries (COP)

Batteries (cop)

Trucks (car, bus, coaches)

-------------------Ships and ports

-----------------Trains----------

Aircrafts, drones, aiport

Clean & low carbon steel (COP)

Circular and Climate Neutral Industry (COP)

Clean Energy Transition (COF)

EIT Climate

EIT Raw material

Mosart (IPPP)

Built Environment (COP)

Legend• Colored box = complementarity +

wish of active coordination • Colored frame= complementarity +

exchange of information • Colored disc= no PPP but wish of

active coordination

RES & low

carbonelec

Gas & elec grids

EU turbine

PILLAR H2 PRODUCTION

PILLAR H2 DISTRIBUTION

PILLAR H2 END USES

Circular and Climate Neutral Industry (COP)

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The SRIA consists of a series of roadmapsthat contain specific actions. role of EU programme and targets neccessary to achieve the 2030 vision.

State of the Art Overview of the current international state of the art with regard to crutial

parameters

2030 visionThe end point for the roadmaps – a

quantitative target for the role of the technology in Europe’s energy system.

ActionsActions which the FCH industry and research community will be

undertaking to realise the interim targets and 2030 vision. Actions where an EU public private partnership could play a direct role are marked in green, others in grey. Each action described is expected

to be important throughout the 2021-2027 period.

Role of EU programmeSummary of proposed focus of

Clean Hydrogen for Europe areas for support

To achieve this vision, the sector needs to achieve a range of 2030 targets

3. Hydrogen can be moved to target markets at low cost.

Transport costs <€1/kg at scale.2. Hydrogen production

enables increased penetration of 100’s of MWs of renewable electricity.

1. A diversity of clean hydrogen production routes have matured, producing hydrogen at a cost of €1.5-3/kg, allowing penetration into mass markets .

4. An affordable zero carbon fuel can be delivered to fuel cell transport applications, with total fuel cost below diesel, taking into account taxation.

6. Hydrogen meets demands for heat and power at a meaningful scale, with:- 25 TWh of hydrogen blended into the natural gas grid- Fuel cell CHP efficiency contributes to reducing energy usage, with 0.5 million FC CHP units deployed in the EU.

7. Hydrogen is actively displacing fossil fuels as a clean energy input into a wide range of industrial processes:

- 8TWh of hydrogen used for industrial heat.- Clean hydrogen replaces conventional fossil-fuel derived hydrogen.- Replacing other fossil fuels e.g. coke in the steel making process, methanol production etc.

8. Regulations, standards and training/education programmes are supporting the transition to a hydrogen economy.

5. Fuel cell vehicles (road, rail, ships) are produced at a price equivalent to other vehicle types, with a compelling user case.

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Production costs for clean H2 compete with conventional fuels

By achieving these targets, clean hydrogen can be produced and distributed to markets at competitive prices…

Methane in the grid

H2 price equivalent

(€/kg)

Untaxed Diesel

H2 in industry

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1.5

Cost of carbonPrice of incumbent fuel

Distribution costs for centralised H2production are lower at scale

SMR + CCSLower bound

Green hydrogen upper bound

A commercially competitive energy vector

1 – 2030 CO2 price of €55/tonne based on “Closing the gap to a Paris compliant EU-ETS” by Carbon Tracker, 2018 2 - Assuming €40/tonne transport and storage cost for the CO2

Some hydrogen will be produced in large centralised production plants for access to low-cost renewable energy. The distribution costs need to be minimised to ensure the fuel remains competitive.

Transport of hydrogen at scale is expected to cost at most €1/kg

Hydrogen produced at a cost between €1.5-3/kg is competitive with conventional fuels for transport applications amongst others once a 2030 carbon price is taken into account1. These prices are viable for SMR with CCS2 and for electrolysis (assumptions as per roadmap targets).

On-site hydrogen production offers an alternative

In some locations, decentralised hydrogen production may offer a lower cost route. Distribution costs are avoided, but production costs may be higher at smaller scales. The best solution will be location-specific.

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…. prices that are competitive in a range of applications that are key to decarbonising Europe’s economy

Transport – for example, FC cars are projected to achieve cost parity with diesel at commercial production volumes at a H2 cost of €5/kg.

Industry and gas – clean H2 as a feedstock can reach parity with fossil-based inputs once the cost of carbon is included.

Adapted from “Development of business cases for Fuel Cell and Hydrogen applications for Regions and Cities”, 2017, Roland Berger for the FCH-JU

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Decarbonising heat – Hydrogen may be the lowest cost way to decarbonise the gas grid.Fuel cell CHPs are high efficiency and can reduce energy use and associated CO2emissions even in advance of grid decarbonisation.

Adapted from data in “Cost analysis of future heat infrastructure options” Report for the UK National Infrastructure Commission, 2018. Data = whole system costs for 4 options & cumulative carbon emissions from heat, €/£ = 1.14

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100

200

300

Hybrid heat pumps

Heat pumpsBaseline HydrogenDirect electric heating

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Net cost of CO2 abatement for different options for decarbonising heat€/tonne CO2

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Developing these technologies is an essential part of meeting many of Europe’s policy goals….

1. Clean Energy for all Europeans is being provided by a diversity of clean hydrogen production routes. Clean hydrogen provides 8% of required emissions reductions between now and 2030, and 25% by 2050.

6. Decarbonisation of the gas grid and improving energy usage in buildings targets are being realised by FCH technologies:- hydrogen–methane blends in the gas grid save 6 MtCO2 pa contributing to the forthcoming gas policy package.- FC micro-CHP efficiency reduces energy needs in buildings contributing to the Energy Efficiency & Energy Performance of Buildings Directives.- clean hydrogen for heat and power reduces emissions in the industrial sector, contributing to the

Emissions Trading Scheme Directive.

7. Clean hydrogen in industry is essential to achieving deep decarbonisation of industry, contributing to the aims of the Emissions Trading Directive and sectoral agreements on decarbonisation.

2. Renewable energy targets are being met and energy market design is improved due to the role of hydrogen in supporting the energy system.

Hydrogen production directly results in an additional 20-40 GW of renewables on the grid, equivalent to 5-10% of today’s RES-E capacity.

4. & 5. Fuel cell vehicles are improving environmental outcomes in all transport sectors, contributing to the aims of:- the Clean Vehicle Directive.- CO2 emissions standards.- the Alternative Fuels Directive.

- Roadmap to a Single European Transport Area on maritime & aviation emissions.Hydrogen is fuelling at least 5 million clean vehicles (1.5% of total EU fleet) by 2030.

We are confident that this vision for hydrogen’s role in the 2030 energy system is achievable. With the right support, the hydrogen option can be competitive and mature by 2030, and a vital tool to meet some of Europe’s key policy aims:• Deep cuts of CO2 in hard to decarbonise sectors: heavy duty transport (road, rail, ship), heat and industry• Reducing air pollution• Ensuring energy security• Providing energy to citizens at an affordable price

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