'Negligible role' | Prospects for hydrogen use in industrial and domestic heating shrinking due to rise of heat pumps: IEA
Lifetime costs of H2 up to five times more expensive than heat pumps in major European markets, as technology advances allow electrons to penetrate tricky industrial heat sector
Hydrogen is likely to play a “negligible role” in space and water heating by 2030, according to a new report from the International Energy Agency (IEA) and is also likely to lose ground to electrical solutions in the key hard-to-abate industrial heat sector.
Hydrogen: hype, hope and the hard truths around its role in the energy transition
The IEA’s Announced Pledges Scenario (APS) modelling, which assumes governments follow through on all their decarbonisation commitments to date, found that hydrogen would play a “negligible role” in the space and water heating fuel mix in 2030, as a result of poor round-trip efficiency.
By contrast, installed heat pump capacity can be expected to grow by a factor of 2.6 to 2,600GW by 2030 in the APS scenario, the IEA said, taking the technology’s share of building and water heating from 10% to 20%.
The IEA envisages energy efficiency making up the bulk of emissions reductions in space and water heating to 2030, with 53% of all reductions. Heat pumps account for 39% of reductions and “other fuel switch”, which includes hydrogen, accounting for a mere 8%.
Industry
The main market for the hydrogen-powered heat remains high-temperature applications in industrial settings, according to the IEA, but it noted that advances in heat pump technology and direct electrification are eroding that potential market too.
Moreover, renewable hydrogen performs poorly on cost against heat pumps and direct electrification in industry. In the IEA’s modelling, which uses Finland and Germany as examples, the levelised cost of producing green hydrogen for industrial heat was around $250/MWh and $125/MWh respectively, both five times’ higher than the respective cost of producing heat from a heat pump.
And hydrogen-produced heat was more than double the cost of using an electric boiler.
Heat pumps, meanwhile, have now become cheaper than using fossil gas in industry in both Finland and Germany, as a result of very high gas prices and fiscal changes in those countries.
Although heat pumps usually have to be specially designed for industrial uses, they are already used for temperature applications below 100℃, for industries such as paper, food and chemicals. If waste heat from other industrial sources is used, heat pumps can be used to provide temperatures of up to 150℃, the IEA explains.
At temperatures from 150-200℃, required in processes such as pulp boiling, steam production and chemical distillation, heat pumps would need special refrigerants and compressors. The technology for this is mostly at the early prototype stage, with some higher-temperature applications nearing commercialisation.
Once industrial processes require temperatures of above 200℃, heat pumps are no longer an option, although some nascent technology to address this is in the research stages. However, direct electrification could be a more cost-effective way of producing high-temperature heat, the IEA analysis showed.
As a result, the most likely use case scenarios for green hydrogen in industrial heat, are those high temperature applications where direct electrification is not an option — such as those located in areas with grid constraints.
“Hydrogen could technically also replace natural gas in boilers for lower‐temperature heat and steam,” the IEA added, without saying whether it considered this a viable option.
“Compared with heat pumps or direct electrification, hydrogen‐based heat suffers from low overall efficiency due to losses incurred in the production of low‐emission hydrogen via electrolysis and associated high cost,” the report explained.