FCH JU:

Making hydrogenand fuel cells an everyday reality

Mirela Atanasiu

Head of Unit

2

Strong public-private partnership with a focused objectiveEU Institutional Public-Private Partnership (IPPP)

Fuel Cells & Hydrogen Joint Undertaking (FCH 2 JU)

Research grouping about 68 members

Industry grouping More than 130 members

50% SME

To implement an optimal research and innovation programme to bring FCH technologies to the point of market readiness by 2020

FCH 2 JU ObjectivesMarket readiness of a portfolio of clean, efficient and affordable solutions for our energy and transport systems

3

Clean Transport

Reduce fuel cell system costs for transport

applications

Green hydrogen

productionIncrease efficiency and

reduce costs of hydrogen

production, mainly from

water electrolysis and

renewables

Minimal use of critical raw materials

Reduce platinum loading

H2 storage for grid balancing

Demonstrate on a large-scale hydrogen’s capacity

to harness power from renewables and support its integration into the

energy system

Heat & electricity

productionIncrease fuel cell

efficiency and lifetime

FCH JU programme implementation

Similar leverage of other sources of funding: 886 m€ 4

Energy

Transport

Cross-cutting

401 million euros

128 projects

353 million euros

59 projects

47 million euros

37 projects

• Hydrogen production and distribution • Hydrogen storage for renewable energy

integration • Fuel cells for power & combined heat &

power generation

• Road vehicles• Non-road vehicles and machinery• Refuelling infrastructure• Maritime rail and aviation applications

• E.g. standards, safety, education, consumer awareness …

47.5%

5.5%

42%

227 projects supported

for 844 m€

42 million euros

3 projects

5%

5

Green H2 production and industry

6

Electrolysis for energy storage and greening of Industry

Steel industryHRS Refineries Food industry

0

5

10

15

20

25

0

2

4

6

8

10

12

2011 2014 2016 2017

FCH

JU

Su

pp

ort

(M

Euro

/MW

)

Cap

acit

y (M

W)

Achsentitel

Electrolyser Demo Projects

69 M€

24 Projects

Support to developing electrolysers; Increasing demonstrations with falling support

7

6 MW electrolyser at VOESTALPINE (steel plant) in Linz Austria.The green hydrogen is produced from hydro-electricity (from the

Alps) which is being used to produce steel in this way the industry can make a first step towards CLEAN STEEL

Big industries are discovering the potential of Hydrogen (1/2)

Thanks to FCH-JU research projects the costs of electrolysers decreased and became interesting for big industries to invest

3.4 MW electrolyser at MPREIS (bakery plant) in Völs Austria.The green hydrogen is produced from hydro-electricity (from the Alps) which is being used to heat the ovens to bake the

bread. In a 2nd phase the distribution will be done by H2 trucks

AUSTRIA

8

Big industries are discovering the potential of Hydrogen (2/2)Thanks to FCH-JU research projects the costs of electrolysers decreased and became interesting for big industries to invest

10 MW electrolyser at SHELL in Köln, GermanyThe green Hydrogen is produced from curtailed wind energy which can not be put on the electricity net as it is already full and so the produced hydrogen will be injected in the natural gas grid (part of it can be used for Shell internal processes)

150/30kW Reversible electrolyser, Salzgitter, Germany To operate a high-temperature Electrolyser as reversible

generator (rSOC, reversible Solid Oxide Cell) in the industrial environment of an integrated iron and steel work. The

system is flexible to produce either hydrogen or electricity.

GERMANY

9

EARLY BUSINESS CASES FOR H2IN ENERGY STORAGE ANDMORE BROADLY POWER TO H2 APPLICATIONS

Report published June 2017

Objectives of P2H Early BizCases:Identify bankable Power-to-Hydrogen business cases for 2017-2025 in the EU-28

10

•Within the EU-28, identify locations with favorable electricity conditions for P2H systems (at sub-national level)

•Study three concrete P2H business cases for a specific location and application (industry, mobility), quantifying key performance indicators (CAPEX, revenues, margin,..)

•Derive boundary conditions for profitability and assess replicability potential in the EU-28

Key message:There are bankable business cases for P2H in Europe already today

11

• By 2025, the European market for P2H is estimated at a cumulative 2.8 GW, representing a market value of 4.2B€ and 400 ktons H2 per year.

• Bankability can be achieved by complementing hydrogen sales with electricity grid flexibility services

• Combining P2H for mobility/industry applications and gas grid injection is more cost-effective than stand-alone injection

• Gas grid injection is a risk mitigation instrument until H2 demand picks up

• The Clean Energy package is a unique opportunity to create a market for P2H in oil refineries

• P2H is a practical and system-beneficial way to value excess of RES but requires a long-term view on grid fees, taxes and levies to enable bankability

For 5 EU member states, locations with low-cost electricity were identifiedCongested areas are found where there is local overproduction of RES

12

Important note: These areas are unique opportunities based on their RES curtailment potential. They are not representative of the rest of the country.

(1) Frequency refers to the number of hours per year when partial curtailment occurs, i.e. when at least 1% of the production is curtailed.

• Simulations with grid constraints show significant RES curtailment

•National level: mostly below 2% of total RES production, except for Denmark

•Node-level [HV/MV transformer]: massive curtailment shares in certain areas, up to 40%

•Curtailment occurs throughout the year in some locations

RES curtailment is a pressing issue but linked to specific areas, as the example of Germany shows

13

• Significant curtailment at national level (~2% in 2017), but no increase expected towards 2025

• Onshore wind is the most curtailed RES

• Areas with high curtailment all located in Northern DE

• Some offshore wind curtailment; Solar curtailment is minor

• Recommended area for electrolyser: Herrenwyk (near Lübeck):

360 MW wind farm

Up to 40% of RES production curtailed

Curtailment in 40-60% of the hours of the year

Power-to-Hydrogen potential revenues streams: Electrical grid services should not be considered as stand-alone applications

14

Revenues from hydrogen salesP2H application Potential revenues*

[k€/MW/year]

Refineries, without carbon penalty 237 – 512

Refineries, with carbon penalty 792 – 1068

Light industry market (delivery by trailer) 499 – 1235

Mobility (delivery to the HRS) 526 – 920

Hydrogen injection into gas grid based on national biomethane injection tariff

171 – 350**

Revenues from grid servicesP2H application Potential

revenues*[k€/MW/year]

Balancing services 2 -17

Frequency control services

70 - 224

Distribution grid services

< 1

Primary applications; Secondary applications (combinable with primary applications for little extra cost)

Three different business cases were analysed in three regions both 2017 and 2025

15

On-site production for mobility can generate profitable business cases but is excluded due the fact it has been covered intensively in previous studies.

Bankable business cases were found in the best locations

16Profitable stand-alone primary applications have a payback time ranging between 4 and 11 years. Providing grid services can reduce payback time by 30-50%.

Rule of thumb: P2H business cases profitability depends on: (1) primary market size, (2) hydrogen selling price and (3) average electricity cost

17

By 2025, the European market for P2H is estimated at a cumulative 2.8GW, representing a market value of 4.2B€

18

Bankability boundary conditions:

Average electricity cost of 40-50 €/MWh or lower (baseload and incl. grid fees, taxes & levies)

Enhancing conditions for replication:

Access to curtailed RES at a price discount of 60% compared to the system price;

Partial exemption from grid fees, taxes & levies;

Recognition of green H2 as compliance option in Fuel Quality Directive;

Policy options to realize this market potential

19

20

Guarantees of origin (GoO) for green hydrogen

Ongoing as of 2015

21

1st guarantees of origin for green hydrogen about to hit the market

Main objectives:

-To define a widely acceptable definition of green hydrogen

- Design a robust GoO scheme for green hydrogen

- Propose roadmap to implement the initiative in EU

- Establish a stakeholder platform

- Real trial in 4 pilot operations for a guarantee of origin

scheme for green and low carbon H2

For further informationwww.fch.europa.eu

www.hydrogeneurope.euwww.nerghy.eu

Mirela AtanasiuHead of Unit Operations and Communications

Mirela.Atanasiu@fch.europa.eu

@fch_ju

Fch-ju@fch.europa.eu

FCH JU