Industrial clusters using green hydrogen can drive clean energy transition in Europe and China

(Credit: Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Kevin Tu, Senior Advisor China , Agora Energiewende, Matthias Deutsch, Senior Associate, Agora Energiewende & Gniewomir Flis, Senior Advisor Hydrogen, Agora Energiewende


  • Hydrogen produced with renewable resources will become cheaper than fossil fuels by 2030 across a range of applications.
  • Green hydrogen will be used to replace fossil fuels in hard-to-abate sectors.
  • Cooperation on hydrogen industrial clusters between China and Europe could help move the clean energy transition agenda forward.

After many years of research, development and advocacy, the hydrogen economy is taking shape. This momentum was sparked by expectations that “green” hydrogen, which is produced with renewable resources, will become cheaper than fossil fuels by 2030 across a range of applications. While most research suggests that the majority of fossil molecules in energy applications will be replaced with clean electrons rather than green molecules, it is becoming clear that direct electrification of everything would be technically impractical and economically burdensome.

Spearheading efforts to scale-up hydrogen, the EU – as well as individual member states including Germany, France, the Netherlands, Poland, Portugal and Spain – have already presented their hydrogen strategy documents, with more still under development. Central to EU hydrogen strategy is a massive deployment of electrolysers, as well as the need to import green hydrogen from abroad. To this end, the EU is considering the “Hydrogen Backbone”, with a project that would convert 23,000 km, or about 10% of current gas pipeline networks to carry pure hydrogen instead.

The Backbone would be 75% based upon repurposed gas pipelines, and 25% on new, purpose built hydrogen pipelines. But estimates of future hydrogen demand can vary, by almost an order of magnitude, so without careful evaluation of future demand, the EU risks exchanging stranded gas infrastructure for stranded hydrogen assets.

China is the largest hydrogen producer and consumer in the world, the central government first endorsed hydrogen in the 2019 State Council work report. Since then, at least 23 out of 31 provincial level regions in China have already issued development plans for hydrogen energy and fuel cell vehicles, and more than 10 of them included hydrogen development in their 14th Five Year Plan for Economic and Social Development and the Long-Range Objectives Through 2035.

What’s the World Economic Forum doing about the transition to clean energy?

Moving to clean energy is key to combating climate change, yet in the past five years, the energy transition has stagnated.

Energy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago. Plus, improvements in the energy intensity of the global economy (the amount of energy used per unit of economic activity) are slowing. In 2018 energy intensity improved by 1.2%, the slowest rate since 2010.

Effective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system.

Benchmarking progress is essential to a successful transition. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. The 10 countries that score the highest in terms of readiness account for only 2.6% of global annual emissions.

To future-proof the global energy system, the Forum’s Shaping the Future of Energy and Materials Platform is working on initiatives including, Systemic Efficiency, Innovation and Clean Energy and the Global Battery Alliance to encourage and enable innovative energy investments, technologies and solutions.

Additionally, the Mission Possible Platform (MPP) is working to assemble public and private partners to further the industry transition to set heavy industry and mobility sectors on the pathway towards net-zero emissions. MPP is an initiative created by the World Economic Forum and the Energy Transitions Commission.

Is your organisation interested in working with the World Economic Forum? Find out more here.

Various levels of Chinese government fully embrace the concept of hydrogen industrial clusters and are already creating them: from East China (Shanghai and adjacent regions) to Central China (Wuhan and beyond), Southern China (Guangdong and beyond), and the Beijing-Tianjin-Hebei region. Even at provincial (such as Hebei) and lower local government level (such as Foshan City in Guangdong), the concept of industrial clusters has been integrated into hydrogen plans.

China’s eager embrace of hydrogen industrial clusters is largely incentivized by the country’s ability to significantly bring down unit manufacturing cost through industrial clusters. Following a rapid industrialization process starting in 1978, China has now formed a comprehensive modern industrial system comprising 41 large industrial categories, 207 medium ones and 666 small ones, thus is the only country in the world that has all the industrial categories based on the industrial classification of the United Nations. Taking capital expenditure of alkaline electrolysis systems and coal-fired power plants as examples, Chinese manufacturers and contractors possess significant cost advantages against their counterparts in western countries. The importance of industrial clusters in achieving economies of scale is clear.

Cost advantages of Chinese manufacturers and contractors

Prospects of a hydrogen economy with Chinese characteristics (Ifri: Paris)
Prospects of a hydrogen economy with Chinese characteristics (Ifri: Paris). Kevin Tu (2020)

Similar to the EU, China is currently experiencing a wave of interest in hydrogen. Unlike the EU, national coordination of the hydrogen economy is noticeably inadequate; China has not yet issued a national hydrogen strategy. China could thus benefit enormously from insights gathered in the European (especially German) debates. Ideally, mutually beneficial international cooperation on hydrogen industrial clusters between China and Europe could help move the clean energy transition agenda forward.

Quantifying European hydrogen demand and mapping industrial clusters

Assuming that electricity will replace much of current demand for natural gas, Agora Energiewende, an energy transition think tank based in Berlin, together with its partner AFRY Management Consulting, have taken up the task of estimating inescapable industrial hydrogen demand, which arises from applications where electricity would not be a practical solution in the foreseeable future. In other words, we have purposely assumed that sub-sectors where direct electrification is feasible would opt for these technologies in the interest of efficiency.

First, we calculated the trajectories for such hydrogen demand up to 2050, by which time refineries (currently the biggest hydrogen buyer) will have been phased out in the EU. The three biggest consumers by mid-century are projected to be steel, ammonia, and plastics, which are applications where hydrogen is used primarily as feedstock instead of energy carrier.

Next, we mapped these demand centres up to 2050. The biggest demand hub is found in North Rhine-Westphalia (Germany), Flanders (Belgium), and the Netherlands, where a large cluster of chemical and petrochemical installations is already located, along with steel plants. Because other smaller clusters could be considered potentially disparate, we then investigated whether these demand levels are likely to warrant hydrogen pipeline connections.

Based on envisaged feedstock and chemical reagent demand for hydrogen, Agora identified four industrial clusters where there is a clear, no-regret case for repurposing or building a hydrogen pipeline network. These clusters are ideally suited to serve as anchor points for hydrogen demand, from which sprawling hydrogen octopuses of pipelines might eventually emerge, should hydrogen steal the hearts of consumers.

Adding potential hydrogen demand from other hard-to-abate applications in power, aviation and shipping sectors is likely to strengthen the case for a more expansive network of hydrogen pipelines.

However, total European demand for green hydrogen from all sectors in 2050 is likely to be in the order of 1,000-2,000 TWh per year, the equivalent of only a fraction of the current natural gas consumption of 4,600 TWh. To achieve climate neutrality by mid-century, the EU should therefore focus on developments along early opportunity corridors identified in our study. By comparison, China should start mapping its likely corridors of eventual clean hydrogen demand – based on probable levels that emphasize electrification, with hydrogen filling in the gaps towards carbon neutrality before 2060.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Here are 10 of Nelson Mandela’s most inspirational quotes

Innovation can transform the way we solve the world’s water challenges

Can indoor farming feed the world?

Protection of workers from biological agents: how to classify COVID-19

UN investigates systematic sexual violence across South Sudan

Voice tech and the question of trust

Korea must enhance detection and reinforce sanctions to boost foreign bribery enforcement

All States have ‘primary responsibility’ to protect against hate attacks

Achieving a European Education Area by 2025 and resetting education and training for the digital age

UN rights chief says ‘bar must be set very high’ for investigation of murdered Saudi journalist

We dream of being a part of the European family, says FYROM PM

Execution of juvenile offender in Iran ‘deeply distressing’ – UN rights chief

More than 90 per cent of Africa migrants would make perilous Europe journey again, despite the risks

Faith can overcome religious nationalism. Here’s how

Diversity training doesn’t change people’s behaviour. We need to find out what does

From violence to dialogue: as land conflicts intensify, UN boosts efforts to resolve disputes through mediation

Embracing technology as a service will fuel the circular economy. Here’s how.

Europe’s far-right launches attacks on neighboring nations

EU Parliament and Council: Close to agreement on the bank resolution mechanism

Technology as an inclusion method while facing the COVID-19 pandemic: the “Coronavirus-SUS” app

Plastic waste from Western countries is poisoning Indonesia

‘Unconscionable’ to kill aid workers, civilians: UN Emergency Coordinator

Facebook has built an AI-based tool that fixes the social network when it crashes

CO2 emissions around the world

Coronavirus: Using European supercomputing, EU-funded research project announces promising results for potential treatment*

4 ways to keep the momentum rolling on mental health

How COVID-19 could open the door for driverless deliveries

The future of manufacturing is smart, secure and stable

EU Parliament: A catastrophic crisis management by European leaders

South Korea wants to build three hydrogen-powered cities by 2022

Gaps being closed- medical students uplifting women’s right

Microsoft says the internet is getting a little nicer

This Japanese concept will help you see the world – and learn – in a different way

Stage set for successful 2020 Burundi elections, Foreign Minister tells General Assembly

How digital identity can improve lives in a post-COVID-19 world

Will the European Court of Justice change data privacy laws to tackle terrorism?

Palestinian children’s education deeply impacted by ‘interference’ around West Bank schools, UN warns

‘InvestEU’ programme: big boost for jobs, growth and investment

A day in the life of a refugee: We should be someone who helps

EU and Japan select first Erasmus Mundus Joint Master Programmes

Can climate change action lead to better inclusion?

4 steps towards wiping out cervical cancer

EU car manufacturers worry about an FTA with Japan

Here’s how retailers can encourage more sustainable behaviour

Good grub: why we might be eating insects soon

Here are 5 reasons why the ocean is so important

‘Terminator’ warlord Bosco Ntaganda sentenced to 30 years in prison for DR Congo atrocities

5 ways to reduce risk while fuelling IT innovation and growth

Public opinion misled by the Commission on air transport safety

British PM May’s Brexit proposal remains obscure while her government unravels

Most ‘precious’ and ‘scarce’ resource of our time is dialogue, UN chief tells Doha policy forum

Mining the deep seabed will harm biodiversity. We need to talk about it

3 steps to boost your digital safety while working from home

How to have a good Fourth Industrial Revolution

UN honours fallen colleagues and friends who ‘risk all to promote peace’

The winds of change: 5 charts on the future of offshore power

Whose interests are protected by the new Mortgage Directive?

GSMA Announces Latest Event Updates for 2018 “Mobile World Congress Americas, in Partnership with CTIA”

Is the ECB enforcing the will of the big Eurozone member states on the small? Can the euro area live with that?

Colombia: ‘Significant strides’ towards integrated peace, UN envoy tells Security Council

More Stings?

Comments

  1. vaishnavi Sisodiya says:

    AAKASH GREEN is a leading Renewable Energy Company in Dubai engaged in the bamboo plantation and creating sustainable environment friendly sources of energy for the use of mankind.Please visit our website for more information.

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s