Hydrogen Insights - A perspective on hydrogen investment,market development and

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1、Hydrogen Insights A perspective on hydrogen investment, market development and cost competitiveness February 2021 Hydrogen Insights Report 2021 Hydrogen Council, McKinsey and 2. It is not their intention that any such form of coordination will be adopted. Whilst the contents of the Report and its ab

2、stract implications for the industry generally can be discussed once they have been prepared, individual strategies remain proprietary, confidential and the responsibility of each participant. Participants are reminded that, as part of the invariable practice of the Hydrogen Council and the EU compe

3、tition law obligations to which membership activities are subject, such strategic and confidential information must not be shared or coordinated including as part of this Report. Contents Executive summary iii I. Introduction and methodology 2 Hydrogen Insights is a leading global perspective on hyd

4、rogen 2 The Hydrogen Insights report methodology 3 II. Deployment and investment 6 Tremendous momentum exists, with over 200 H 2 projects announced worldwide 6 More than USD 300 billion in H2 investments through 2030 7 Regulation and government support drive this momentum 8 III. Hydrogen supply 12 R

5、enewable hydrogen could break even with gray H2 before 2030 in optimal regions 12 Electrolyzer capex savings can reduce costs quickly in a rapid global scale-up 15 Expected electrolyzer learning curves could be too conservative 15 IV. Hydrogen distribution and global supply chains 18 The optimal H2

6、transport mode will vary by distance, terrain and end-use: no universal solution exists 18 Hydrogen pipelines 20 Hydrogen carriers 21 Hydrogen global transport can cost less than USD 2-3/kg 24 V. End applications 26 The cost competitiveness of hydrogen applications 26 Hydrogen production cost breake

7、ven 27 A. Road transport and mining equipment 28 B. Ammonia 31 C. Steel 32 D. Sustainable shipping fuels 34 E. Aviation 37 VI. Implementation: bringing it all together to capture the promise of hydrogen 42 iii Hydrogen Insights Report 2021 Hydrogen Council, McKinsey they also do not include any cost

8、 for hydrogen transportation and distribution. With the advent of hydrogen giga-scale projects, hydrogen production costs can continue to fall. For renewable hydrogen, the biggest driver is a quicker decline in renewables costs than previously expected, driven by at-scale deployment and low financin

9、g costs. 2030 renewable costs could be as much as 15% lower than estimated just a year ago. The strongest reductions are expected in locations with optimal resources such as Australia, Chile, North Africa and the Middle East. But lower renewable costs are not enough: for low-cost clean hydrogen prod

10、uction, value chains for electrolysis and carbon management need to be scaled up. This will not happen on its own: a further step-up of public support is required to bridge the cost gap, develop low-cost renewable capacities and scale-up carbon transportation and storage sites. For the cost projecti

11、ons in this report, we assume an ambitious development of the use of hydrogen in line with the Hydrogen Council vision. For electrolysis, for example, we assume 90 GW deployment by 2030. Such a scale-up will lead to a rapid industrialization of the electrolyzer value chain. The industry has already

12、announced electrolyzer capacity increases to over approximately 3 GW per year, and will need to scale rapidly beyond that. This scaling can translate into system costs falling faster than previously estimated, hitting USD 480-620 per kilowatt (kW) by 2025 and USD 230-380 per KW by 2030. System costs

13、 include stack and balance of plant but exclude transportation, installation and assembly, costs of building and any indirect costs. At-scale deployment of renewable hydrogen will require the development of giga-scale hydrogen production projects. Such projects with purpose-built renewables can boos

14、t utilization by merging multiple renewable sources, such as a combined supply from onshore wind and solar photovoltaics (PV), and by overbuilding renewables supply versus electrolyzer capacity. In combination, projections show that renewable hydrogen production costs could decline to USD 1.4 to 2.3

15、 per kilogram (kg) by 2030 (the range results from differences between optimal and average regions). 1 This means new renewable and gray hydrogen supply could hit cost parity in the best regions by 2028, and between 2032 and 2034 in average regions. In parallel to renewable hydrogen production, low-

16、carbon hydrogen production from natural gas has continued to evolve technologically. With higher CO2 capture rates and lower capex requirements, low-carbon hydrogen production is a strong complementary production pathway. If carbon transportation and storage sites are developed at scale, low-carbon

17、hydrogen could break even with gray hydrogen by the end of the decade at a cost of about USD 35-50 per ton (t) of carbon dioxide equivalent (CO2e) 1 . Distribution: Cost-efficient transmission and distribution required to unlock hydrogen applications With hydrogen production costs falling, transmiss

18、ion and distribution costs are the next frontier when it comes to reducing delivered hydrogen costs. Longer-term, a hydrogen pipeline network offers the most cost-efficient means of distribution. For example, pipelines can transmit 10 times the energy at one-eighth the costs associated with electric

19、ity transmission lines and have capex costs similar to those for natural gas. The industry can partially reuse existing gas infrastructure, but even newly constructed pipelines would not be cost prohibitive (assuming leakage and other safety risks are properly addressed). For example, we estimate th

20、e cost to transport hydrogen from North Africa v Hydrogen Insights Report 2021 Hydrogen Council, McKinsey hydrogen shipping, distribution and retail infrastructure; and the take up of end applications. One place to support deployment is the development of clusters with large-scale hydrogen offtakers

21、 at their core. These will drive scale through the equipment value chain and reduce the cost of hydrogen production. By combining multiple offtakers, suppliers can share both investments and risks while establishing positive reinforcing loops. Other smaller hydrogen offtakers in the vicinity of such

22、 clusters can then piggy-back on the lower-cost hydrogen supply, making their operations breakeven faster. We see several cluster types gaining traction, including: Port areas for fuel bunkering, port logistics, and transportation Industrial centers that support refining, power generation, and ferti

23、lizer and steel production Export hubs in resource-rich countries vii Hydrogen Insights Report 2021 Hydrogen Council, McKinsey LOHC cost dependent on benefits for last mile distribution and storage 3. Compressed gaseous hydrogen 51100 km 1,000 km101500 km050 km 5,000 km Distribution Costs Transmissi

24、on Gaseous trucking N/A N/ADistribution truck CH 2 3 Distribution truck CH 2 3 Distribution truck CH 2 3 City grid Regional distribution pipelines Onshore transmission pipelines Onshore/Subsea transmission pipelines N/A Retrofitted LH 2 N/A LH 2 shipN/A N/A LH 2 ship New City grid Regional distribut

25、ion pipelines Onshore transmission pipelines Onshore/Subsea transmission pipelines N/A NH 3 2 N/A N/A N/A NH 3 ship NH 3 ship LOHC 2 N/A N/A N/A LOHC shipLOHC ship Pipelines 1 Shipping Trucking LH 2 trucking N/A N/ADistribution truck LH 2 Distribution truck LH 2 Distribution truck LH 2 2 USD/kg12 US

26、D/kg0.11 USD/kg USD 70/tCo2e) but require hydrogen-based fuels as the only zero-carbon fuel possibility that can realize decarbonization ambitions. While end applications in buildings and power require an even higher carbon (200 USD/t CO2e) price to become cost competitive, we believe they will see

27、strong momentum, nevertheless. For example, in the United Kingdom multiple landmark projects are blending hydrogen into natural gas grids for residential heating. They are also working with hydrogen for backup power solutions, especially for high power applications like data centers. The reason for

28、this is that while hydrogen may not be able to outcompete conventional solutions, it can be the most cost-effective low-carbon option for many stationary use cases (see Exhibits 18, 19). 0 SUV Mid- sized vehicle Building heating 2 Ammonia Refinery Steel (DRI) Power generation 1 High grade heat 1.4 0

29、.6 Ships Renewable hydrogen, average region Buses Trains 3.8 Low-carbon hydrogen, average region Trucks Airplanes (synfuel) 4.44.6 2.23.0 2.2 0.6 1.4 00.6 0.8 0.3 0.5 0.6 USD/kg in 2030 Reference technology Natural gas Ship fuel Diesel In the money CoalNatural gas (SMR) Kerosene 2.3 1.6 1. Average o

30、f combined cycle and single cycle turbine applications 2. Boiler with existing network Exhibit 18: Required hydrogen production cost for breakeven with conventional solutions, without carbon costs 27 Hydrogen Insights Report 2021 Hydrogen Council, McKinsey & Company A. Road transport and mining equi

31、pment Global transportation generates 24% of global direct CO2 emissions from gasoline and diesel combustion processes, with road vehicles like cars, trucks, buses, and motorcycles contributing roughly three-quarters of global transportation emissions. BEVs and FCEVs are both viable alternatives to

32、decarbonize global transport. Use case-specific requirements such as range, payload and power requirements can determine the applicability and competitiveness of battery- or hydrogen-powered solutions. On-road. In on-road trucking, BEVs remain the most competitive decarbonization option for lower- a

33、nd mid-range use cases. FCEVs are best positioned to cover long-haul use cases, especially the upper spectrum cases with higher daily ranges. While most freight transport segments are not weight-constrained, FCEVs are the only alternative for weight-sensitive use cases of any driving range, includin

34、g pulp and paper or iron and steel transport. That is because heavy batteries would reduce the potential payload of trucks to a larger extent than would fuel cells and hydrogen tanks. For passenger cars, intended use and customer preferences will determine the choice of a fuel cell versus battery-el

35、ectric powertrain. BEVs clearly outcompete FCEVs in lower-range use cases such as urban cars or mid-size vehicles (fewer than 500km). However, fuel cell vehicles are an option to power larger passenger cars, SUVs and vans with longer-range requirements and heavier use cycles, especially those used i

36、n commercial operations such as taxis or ridesharing. Off-road. While zero-carbon powertrains for off-road segments such as mining trucks are less advanced than those for on-road use cases, fuel cell powertrains or even hydrogen combustion engines might represent the only alternative for decarbonizi

37、ng very heavy equipment like dump trucks for mining operations. The high peak power requirements and harsh vibration and heat USD/kg in 2030 Natural gas Ship fuel Diesel CoalNatural gas (SMR) Kerosene 0 1.0-1.6 1.0-2.4 Refinery Steel (DRI) Mid- sized vehicle TrainsBuses 2.3 Airplanes (synfuel) Ships

38、Building heating 2 Power generation 1 Low-carbon hydrogen, average region 4.4 Renewable hydrogen, average region 4.6 High grade heat 5.1 Trucks SUV Ammonia 5.4-5.7 2.8-4.1 2.2 2.2 1.4 1.5 1.2 2.3 1.6 In the money Reference technology 1. Average of combined cycle and single cycle turbine applications

39、 2. Boiler with existing network Exhibit 19: Required hydrogen production cost for breakeven with conventional solutions, with 100 USD/t CO 2 e 28 Hydrogen Insights Report 2021 Hydrogen Council, McKinsey & Company 352020 25 30 2040 0.9 1.1 1.3 1.5 1.7 0.7 0.5 Diesel ICE Fuel cell (FCEV) 1 BEV 1. Ass

40、uming renewable hydrogen, Europe USD/km Use case: Flexible and demanding long-haul transport under ideal efficiency conditions conditions experienced in the off-road environment make hydrogen combustion attractive as an alternative to fuel cells in off-road applications. TCO use-case perspective: On

41、-demand heavy-duty trucking for demanding long-haul transport We modeled a long-haul heavy-duty class 8 truck for flexible and demanding long-haul transport with a vehicle lifetime of 10 years and a yearly distance of 150,000km. Our on-demand trucking use case requires a high fuel range of 800km. We

42、 assumed a hydrogen price at the dispenser of about USD 4/ kg in 2030 and an underlying cost of roughly USD 50/t of CO 2 e. In the model, we compared a heavy- duty truck (HDT) fuel cell electric vehicle (FCEV) with a battery-electric truck and a diesel truck. We expect the on-demand HDT FCEV to beco

43、me the cheapest option in terms of TCO by 2030. It should achieve break-even with battery-electric vehicles (BEVs) by around 2025, and with internal combustion engine (ICE) HDTs by 2028. Overall, the decrease in fuel cost (we expect H 2 cost to decline about 60% between 2020 and 2030) will drive an

44、estimated 80% of the TCO change. The remaining 20% comes from falling equipment costs (powertrain costs are expected to decrease about 70% between 2020 and 2030). In the short-term, fuel costs make up about half of the TCO in this use case, while fuel cell powertrain costs account for approximately

45、12%, which breaks down as 45% fuel cell system costs, 40% tank cost and 15% other components. In the mid-term, fuel costs will account for 30% and the powertrain for 7% of total cost (see Exhibit 20). In specific settings e.g., where subsidies or other support mechanisms exist the breakeven point ca

46、n be shifted forward. Switzerlands toll exemptions or Californias low carbon fuel standard (LCFS) credits are but examples for such policies. Exhibit 20: Total cost of ownership of on-demand heavy-duty truck 29 Hydrogen Insights Report 2021 Hydrogen Council, McKinsey & Company 1. Assuming production

47、 costs of renewable hydrogen in Chile USD/h 400 2020 20403525 30 300 500 600 700 800 200 Fuel cell (FCEV) 1 Diesel ICE H 2 ICE Technical feasibility not yet demonstrated Use case: Open pit dump truck used in mining operations TCO use-case perspective: Open-pit dump truck for mining operations The TC

48、O analysis modeled a 300t open-pit dump truck used in mining operations in Chile with 6,200 operational hours per year and a lifetime of 12 years. High power requirements (about 2,000 kW) made the mining truck an interesting application for hydrogen internal combustion engines, as fuel cell trucks w

49、ith such high power requirements remain untested. We assumed a hydrogen price at the dispenser of USD 1.4/kg in 2030 (with hydrogen production on-site) and an underlying cost of USD 50/t of CO2e. We did not model a battery-electric mining truck, since its feasibility is challenging, especially in terms of charging. Because uptime is critical in mining operations, high-speed charging would be required to meet the required battery capacities. Moreover, many mines are off grid and battery swapping becomes difficult and expensive, given