Cost and climate benefit potentials of renewable electro-hydrogen in Swedish industry investigated in new f3 report

For Sweden to reach national goals of fossil independency and a climate neutral society, it is essential that the production of renewable fuels, the de-fossilisation of Swedish industry and the development of a more flexible electrical system gain momentum. One way to contribute to an electrical system in balance and an increased production of renewable substances, is to utilise the increasing access of renewable, low cost electricity for electrolysing water into hydrogen (electro-hydrogen) and oxygen.

Anna-Karin Jannasch, RISE, and Maria Grahn, Chalmers, are the authors of a new f3 report that wants to provide an easily accessible summary of the conditions required for electro-hydrogen to be considered as a viable alternative for de-fossilising various industrial sectors in Sweden.

Renewable electro-hydrogen can be used as energy storage or as fuel in for example fuel cell vehicles, but may have its outmost potential in processes that replace fossil feedstock and/or energy carriers in various industrial processes in steel, chemical and biofuel production. Electro-hydrogen can also be used to bind larger COemissions from biogas plants, steel or cement industry. Via electro-fuel processes (sometimes also called power-to-gas or power-to-fuel) it can be used to generate valuable products such as methane and methanol in a circular economy. The different applications have different degrees of maturity, but are generally still far from a broad commercial penetration.

The analysis of this newly finished project is based on a number of case-studies focused on the Swedish chemical and biofuel industry. The Swedish cement and steel industry are used as references for comparison of the demand for electro-hydrogen. Estimations by model calculations use input from industrial stakeholders and the open literature

One main insight from the project is that electro-fuel technology, once it has matured, has a good opportunity to produce electro-hydrogen and electro-methanol that is cost-competive in relation to current technology and fossil-based fuel alternatives. However, using electro-fuels for the purpose of de-fossilising Swedish chemical and biofuel on one hand and steel and cement industry on the other, demands a high electrolysis capacity and use of fossil free electricity. This would in turn put pressure on existing electricity grid, presenting a challenge for the electro-fuel concept.

The report also mentions the cost of avoided COemissions relative to the impact of policy measures such as the Swedish reduction obligation quota system (Reduktionsplikt) as an important aspect of the implementation of electro-fuel technology. A future situation with expensive biofuels (due to a demand larger than the available supply) could potentially lead to that the reduction obligation quota is fulfilled with cheaper options. This is where electro-fuels may be cost-compatible.

Read the full report here.