DANFOSS: GREEN HYDROGEN MUST BE USED AND PRODUCED WISELY TO HARNESS ITS FULL POTENTIAL

A new Danfoss Impact paper reveals that with hydrogen production set to consume more than half of today’s electricity demand by 2050, energy efficiency in its production is paramount. Decisive steps must be taken to scale its production for use in the hard to abate sectors, without putting an unmanageable strain on renewable energy production or financial resources.

Danfoss calls for a nuanced approach to green hydrogen, because it will play a critical role in the transition away from fossil fuels. However, more focus needs to be put on how we use and produce green hydrogen in the most efficient way, lowering cost and the demand for renewables.

Crucially, hydrogen production should be recognized as a limited resource that must be strategically allocated to sectors that are otherwise challenging to decarbonize such as heavy industry and long-distance transport.

With green hydrogen production requiring immense amounts of electricity, energy efficiency in its production is vital to its sustainability. While current green hydrogen conversion processes incur an energy loss of approximately 30%, existing technology can minimize this loss. For instance, efficient converters converting alternating current (AC) to direct current (DC) for electrolyzers can increase overall production efficiency by roughly 1%. Though seemingly small, a saving of 1% of the electricity demand in 2050 for hydrogen is enough to power London for almost four years.

Hydrogen holds significant promise in many countries' climate strategies, with substantial funding programs underway globally. However, rapid action is necessary. To realize the goals set by the Paris Agreement, global electrolysis capacity must reach more than 550 GW by 2030. Green hydrogen production can grow massively by 2030, but cost challenges are hampering deployment.

In fact, hydrogen-dedicated renewable energy capacity is expected to grow by 45 GW between 2022 and 2028, some 35% lower than forecast a year ago due to slow progress on real-world implementation, the International Energy Agency (IEA) said in its latest Renewables report.

Recovering excess heat from electrolysis is another vital energy efficiency measure. Hydrogen production creates incredible amounts of excess heat. In the EU alone, about 114 TWh can be recovered already by 2030, enough to cover Germany’s current domestic heating more than two times.

The new Danfoss Impact paper, “Green hydrogen: A critical balancing act”, presents a balanced approach to hydrogen where efficiency and affordability play a key role.

Key takeaways: