Hydrogen needs to be produced efficiently and strategically directed for use in hard-to-abate sectors to reach its full potential, according to a Danfoss report.
The Danfoss paper, Green Hydrogen: A Critical Balancing Act, identified that hydrogen is set to consume over half of today’s electricity demand by 2050, meaning hydrogen production should be recognised as a limited resource.
By 2050, Danfoss has reported that hydrogen will be the largest single source of electricity demand.
© Danfoss
“The potential of hydrogen as a clean energy carrier is immense,” explained Mika Kulju, President of Danfoss Power Electronics and Drives. “But it must be produced efficiently to minimise costs, and we need to deploy it judiciously.
“To maximise its impact, which is paramount, green hydrogen should be channelled into sectors where alternatives to fossil fuels are limited, ensuring the greatest reduction in greenhouse gases.”
The Paris Agreement laid out goals for electrolysis capacity to reach more than 550GW by 2030, however its cost are potential hurdles in the deployment. The IEA forecasted that hydrogen-dedicated renewable energy capacity would grow by 45GW between 2022 and 2028 – 35% lower than reported in 2023.
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Current conversion of electricity for hydrogen production creates an energy loss of around 30%, however there are technologies available to reduce this loss.
Danfoss identified that efficient converters converting alternating current (AC) to direct current (DC) for electrolysers can increase production efficiency by roughly 1% – the saving of 1% of the electricity demand in 2050 for hydrogen is enough to power London for almost four years.
Leveraging excess heat from hydrogen production is “a sleeping giant of energy efficiency,” according to Danfoss. It can be strategically captured and deployed as energy by producers. It has been reported that by 2030, up to 53% of the global energy input will be wasted as excess heat.
In the EU, about 114TWh can be recovered by 2030, enough to cover Germany’s current domestic heating twice over. “The potential of recovering excess heat from electrolysis is so enormous that it would be a severe policy mistake not to consider it when planning future energy infrastructure,” claimed Kulju.
“That’s why it’s so critical to set the right regulatory and economic framework for an efficient large-scale rollout of hydrogen.”
In recommendations to governments, Danfoss has advised policies focus on energy efficiency and electrification before the rapid scale-up of hydrogen; use hydrogen for hard-to-abate sectors, including ammonia for heavy industry; hydrogen build out must go hand in hand with renewables; leverage excess heat from green hydrogen production; and examine potential sector integration opportunities.
“Hydrogen is no silver bullet,” Kulju said. “But we need to speed up cost-efficient, green hydrogen production because there is no doubt that hydrogen will play a crucial part in the green transition.”
