Renewable energy deployment should be prioritised over green hydrogen development in Southeast Asia but hydrogen should be reserved for “no-regret” hard-to-abate applications, according to a new report by Agora.
Despite governments across the region increasingly viewing hydrogen as a key pillar of decarbonisation strategies, the Agora paper said renewables-based direct electrification will play a more prominent role in future energy systems.
“Southeast Asia urgently needs to ramp up renewable energy production to reduce its demand for fossil fuels, instead of betting on a wholesale switch to hydrogen,” said Dimitri Pescia, Director Southeast Asia at Agora Energiewende.
It said while hydrogen will be important in chemicals, steel, aviation, shipping and long-term energy storage, “it is less efficient than direct electrification due to energy conversion losses.”
Despite several Asian nations looking to co-fire ammonia in coal power plants, Agora said the pathway was “inefficient and ineffective” in cutting greenhouse gas (GHG) emissions.
Read more: JERA starts co-firing grey ammonia in Japanese coal-fired power plant
By using hydrogen beyond “no-regret” applications, its demand in the region could increase fivefold compared to scenarios where electrification is prioritised, which would put extra strain on electricity supply and resource availability, the study found.
A Danfoss report last week said hydrogen must be prioritised for use in hard-to-abate sectors to reach its full potential.
Read more: Hydrogen must be prioritised for hard-to-abate sectors to maximise impact
“Governments in the region should focus on direct electrification and on low-carbon industry development while carefully considering hydrogen demand potential,” Pescia said. “A targeted use of renewable hydrogen can help keep both its demand and electricity prices in check.”
Furthermore, the Agora study said Southeast Asia faces challenges in making hydrogen production cost-competitive compared to other export regions with better energy resources. It found the region is unlikely to become a “hub for global hydrogen trade.”
However, focusing on the production of green steel or derivatives such as methanol, ammonia and fertilisers could create export potential towards East Asian nations.
Pescia said tapping into its derivative potential could increase industrial competitiveness, create new jobs and boost socio-economic benefits in the region.
A 2022 report by Wärtsilä Energy said hydrogen-based fuels could be key for seasonal balancing in power plants in Southeast Asia.
Read more: Hydrogen key for power balancing in Southeast Asia’s journey to Net Zero
It suggested green hydrogen could act as a balancing solution to ensure power supplies always match demand during periods of low-power production from wind and solar.
Javier Cavada, President and CEO of EMEA at Mitsubishi Power, recently told H2 View the company, which is developing hydrogen-fuelled gas turbines, viewed hydrogen as a key tool in power balancing.
“We can see hydrogen as one molecule that can complement other technologies in a way that has all the quality power generation that natural gas provides,” he told H2 View. “Hydrogen can definitely take that role and replace the molecule.”
Mitsubishi Power’s EMEA head urges realistic hydrogen policies and technology
Hydrogen policy needs to be pragmatic to have credibility, H2 View has been told by Mitsubishi Power’s head of Europe, the Middle East and Africa (EMEA).
In an interview with H2 View, Javier Cavada, President and CEO of EMEA at Mitsubishi Power, said he believed there needed to be more collaboration between industry and government to enable low-carbon hydrogen’s widespread use.
He said while technology firms such as Mitsubishi Power can do their part to develop and prove technology, actions from governments, regulators, investors and offtakers were needed to enable hydrogen’s success.
When asked about some of the stringent low-carbon hydrogen production rules as set out in the EU’s delegated acts on RFNBOs or those proposed under the US Inflation Reduction Act’s (IRA) 45V, he stressed pragmatism was key.
“Personally, throughout my career, I’ve been a renewable-driven person. And I will continue to be, but as a mechanical engineer, I’m fully aware that you need to be realistic,” Cavada told H2 View…
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