Energy economists are quick to point out that producing electrolytic hydrogen for use as a power generation fuel does not really stack up in terms of energy losses and various other cost and efficiency factors.

Would renewable power not be better used directly to help meet the expected surge in electricity demand as the transition accelerates, instead of converting it into hydrogen molecules and then ‘re-electrifying’ via a fuel cell or turbine? Well, yes and no.

A growing number of governments and utilities are stepping up efforts to establish hydrogen as a generation fuel over the next couple of decades.

A growing number of governments and utilities are stepping up efforts to establish hydrogen as a generation fuel over the next couple of decades

By sector, power generation will see the largest increase in hydrogen demand through 2050 in Southeast Asia, according to the IEA’s Announced Pledges scenario. Hydrogen demand for power plants in the region, often as a fuel co-fired with ammonia, rises from the mid-2030s to reach almost 1,300PJ by 2050, helping to displace coal and natural gas, the agency said in its latest Southeast Asia Energy Outlook.

Rising demand is particularly driven by Vietnam, a coal-reliant country that “foresees a strong increase in hydrogen-based generation in its vision to 2050". The country aims to reach hydrogen-fired capacity of around 23–28GW (4.5–5% of total capacity) by 2050, by converting gas-fired power plants from domestic natural gas or liquefied natural gas to hydrogen.

Singapore’s national hydrogen strategy raises the possibility of hydrogen meeting up to 50% of its electricity demand in 2050. Elsewhere, South Korea is emerging as a big supporter of hydrogen power generation.

Hydrogen’s inroads into power generation are not confined to Southeast Asia. In the US, the use of 30% hydrogen blends in turbines has been proposed as a compliance option in meeting CO₂ emissions standards.

The German government is planning to tender for hydrogen-fired power generation and hydrogen-ready gas-fired plants as a key part of its electricity sector strategy.

Globally, announced power projects using hydrogen and ammonia in the power sector could result in an installed capacity of 5,800MW by 2030, an increase of 65% compared with the corresponding capacity identified in 2022, according to the IEA’s latest annual hydrogen sector review.

Around 70% of the projects are linked to hydrogen use in open-cycle or combined-cycle gas turbines, while the use of hydrogen in fuel cells accounts for 10% and the co-firing of ammonia in coal-fired power plants for 3% of the capacity of announced projects. Regionally, these projects are principally located in the Asia-Pacific region (39%), Europe (36%) and North America (25%).

Flexibility premium

So how do these projects justify converting green power into green molecules, and then back into green power? In some cases, such as offshore wind power, it may be cheaper to transport the energy onshore as hydrogen rather than electrons, before re-electrifying it, the IEA pointed out.

However, the main prize on offer is flexibility. As power demand surges, and the world attempts to transition to renewables, the need for flexible, or dispatchable, power to balance out the massive fluctuations in solar and wind is becoming acute.

One solution is natural gas with CCS, with all the risks and costs of installing carbon-capture kit and convincing the public that preserving fossil-fuel power is merited. Hydrogen offers a cleaner alternative, assuming generation plants can be linked to large storage sites.

“In regions with a significant share of solar and wind, hydrogen is a practical option for managing peak demand and storing surplus electricity for long periods. However, this method involves considerable energy losses and substantial storage needs,” said risk management firm DNV in its latest energy transition outlook.

DNV, which is less bullish than the IEA, expects a gradual introduction of hydrogen into power generation from around 2030, initially through blending with natural gas. “Over time, the role of hydrogen in power generation will grow, driven by the need to manage peak demand,” DNV said.

It expects the OECD Pacific region to be at the forefront of this transition, followed by Europe, and China and Taiwan. North America will begin participating by the mid-2040s. By the middle of the century, these regions will collectively use nearly 10mt/yr of hydrogen for electricity generation, DNV said.

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Author: Stuart Penson