Environmentally friendly hydrogen is currently two to four times more expensive than hydrogen from fossil fuels. However, costs could be halved by 2030, predicts the British consulting firm Wood Mackenzie (Wood Mac). The background to this assumption is further expected political requirements to reduce net emissions to zero, falling costs for renewable energies and major activities in the production of electrolyzers as well as increases in efficiency.
Such a development could give a boost to the ambitions of South Korea in particular. The socially liberal President Moon Jae-In had announced that the country's economy would be converted to hydrogen by 2050. These include plans to supply three cities with hydrogen alone and accelerate the introduction of fuel cell vehicles (FCVs) by 2022. According to Wood Mackenzie's research director Prakash Sharma, this requires, among other things, electricity prices for renewable energies of less than 30 dollars (25 euros) per megawatt hour.
South Korea is currently the fifth largest hydrogen market in the world. Wood Mackenzie expects South Korea's demand to reach 4,44 million tons this year, with nearly 86 percent coming from refineries that use the gas to remove sulfur and other impurities from gasoline and diesel. Hydrogen is supplied locally using fossil fuels and causes high emissions.
According to Wood Mac, South Korea is aiming to expand hydrogen use in the areas of industry, heating and mobility. FCV production (including exports) will increase from less than 2.000 units per day today to an annual production of 2022 by 810.000 and 2040 million by 6,2. The government plans to both import hydrogen and produce it domestically.
Worldwide, mobility represents the smallest need for the global hydrogen market (2020: less than 0,1 percent). Although the existing hydrogen filling stations are currently underutilized “due to the limited number of FCVs,” the network is expected to grow rapidly in line with the vehicle supply.
South Korea currently gets seven percent of its electricity from renewable energies, three percent comes from wind and solar energy. Two thirds of the electricity comes from gas and coal. Wood Mac expects the country to be “close to meeting” its goal of meeting around 2030 percent of its energy needs from renewable sources by 20. According to analyst Alex Whitworth, South Korea has so far lagged behind other countries in introducing renewable energy. However, falling costs and the “New Green Deal” initiative would help the country catch up in the next decade. “Over $46 billion will be invested in South Korea’s renewable energy sector by 2030, quadrupling the share of wind and solar energy in generation to 13 percent.”
Electricity from new wind and solar projects is already becoming competitive with electricity from gas-fired power plants and is expected to compete directly with coal-fired power in South Korea by 2025, Wood Mackenzie said. “By 2030, electricity from new solar and onshore wind turbines will be 20 percent cheaper than electricity from coal-fired power plants, while electricity from offshore wind turbines and distributed solar systems will be cheaper than electricity from gas-fired power plants.” These technological advances fundamentally changed the South Korean energy industry: “ “Beyond 2030, we expect subsidy-free renewable energy investments to continue to accelerate in South Korea,” said the British consultancy.
For South Korea to achieve its long-term goal, “further investments in hydrogen infrastructure and political support are required,” the consultancy said.
Photos:
Flag of South Korea / © J. Patrick Fischer, CC BY-SA 3.0, https://commons.wikimedia.org
