The document discusses the potential economic impacts of hydrogen energy. It analyzes the necessary investments to build hydrogen infrastructure and impacts on employment, GDP, and international competitiveness. The success of a green hydrogen economy depends on hydrogen being competitive under future market conditions. Building infrastructure will require substantial investments of £3.5-11.4 billion by 2035 in the UK. Minimizing conversion, storage, and transport costs can improve hydrogen's commercial competitiveness. The document also examines scenarios for hydrogen market capture and impacts on GDP and employment in Australia.

1. ECONOMIC IMPACT ASSESSMENT
OF HYDROGEN ENERGY
LECTURE-VI

2. ECONOMIC IMPACT
• The analysis of economic impacts tends to concentrate on the necessary
investments for hydrogen infrastructure build-up. Other very important
impacts of hydrogen as an energy fuel such as those on employment,
gross domestic product (GDP), international competitiveness.

3. IMPACT ASSESSMENT OF HYDROGEN ENERGY
• The success of a green hydrogen economy essentially depends on whether
hydrogen can meet the needs of customers in a competitive way under future
market conditions.
• Impact of infrastructure - Building a hydrogen economy will require substantial
investment. Production technologies alone will need to attract between £3.5
billion and £11.4 billion by 2035.
• Minimizing the hydrogen conversion, storage and transport costs by using
localized applications could significantly improve hydrogen’s commercial
competitiveness.
• The LCOH can be one of the metrics to assess the economics and commercial
viability of a project or to understand its cost competitiveness compared with
other energy sources.
• Deloittee study considered three scenario namely Steady Progression,
Consumer Transformation and System Transformation

4. IMPACT OF INFRASTRUCTURE

5. IMPACT OF INFRASTRUCTURE
• Reducing electrolyzer costs and improving utilization rates can lead to
lower green hydrogen production costs
• The load factor also impacts electrolyser
cost
• Markets with high levels of renewable
penetration have favourable conditions
for deployment of electrolysers, as the
level of renewable output continues to
increase and power prices are expected
to decline

6. IMPACT OF INFRASTRUCTURE
• Conversion is potentially the second largest cost component in a hydrogen
project. Increasing hydrogen’s volumetric density is one of the main
reasons for hydrogen conversion.
• Compression is the cheapest conversion treatment, adding an average
of £0.5/kg to the cost across the three scenarios,
• However, at 40 kg/m3 (at 700 bar pressure), compressed gas is the least
dense by volume of the conversion options
• LOHC – Liquid organic hydrogen carriers. Conversion to LOHC and
ammonia are the second and third most expensive conversion
treatments respectively, but both chemicals have higher volumetric
density than compressed gas.
• Perhydro-dibenzyltoluene (PDBT) is one of the most well investigated
LOHCs. PDBT has a volumetric hydrogen storage density of 64 kg/m3.
• Ammonia has the highest volumetric density, at 123 kg/m3 (at 10 bar
pressure) of all forms of hydrogen carriers.

7. IMPACT OF INFRASTRUCTURE
• The cost of storage - Long-term, large-scale storage: salt caverns and
compressed gas tanks are the most cost-effective options.
• salt caverns and compressed gas tanks are the most cost-effective ways
to store hydrogen. However, their availability is limited by geography
and they will need dedicated transport infrastructure to carry large
volumes of hydrogen from the production to the storage facility and
then on to end-users.
• Compressed gas tanks have a number of advantages over salt caverns.
They can be set up at a required location, independently from
geological constraints.

8. IMPACT OF INFRASTRUCTURE
• The cost of transporting hydrogen - Large volumes and long distances: gas
pipelines are the most cost effective option.
• The most cost-effective way to transport hydrogen in large quantities
over long distances is via gas pipelines
• Although LOHC pipelines would be cost competitive with gas on a
levelised cost level, their advantage is lost due to the high conversion
costs. In addition, the ‘spent’ LOHC material would need to re-
transported to the production facility to be rehydrogenated
• Injecting hydrogen into the gas grid or fully replacing natural gas with
hydrogen has multiple benefits:
• The majority of the existing gas distribution networks could continue
to be used.
• The gas distribution network could serve as a storage medium for
renewable electricity during times of low demand, thereby linking the
electricity and gas grids and increasing the flexibility for both
• Iit is cheaper to transport hydrogen in large quantities via pipes than
transporting the energy equivalent in electricity.

9. IMPACT OF INFRASTRUCTURE
• Refuelling stations- Refuelling station costs can add considerably to the
final levelised cost of hydrogen – somewhere between £1.85/kg and
£2.26/kg.

10. IMPACT ON GDP
Country
Renewable
Energy
Targets
Hydrogen-specific targets
FCEV Targets
Hydrogen
refuelling
station (HRS)
Targets
Hydrogen flow
(MtH2/yr)
Other
United States-
Federal 20% (2020) 40,000 (2023) 100 (2023) - -
United States -
California 100% (2045) 1 million (2030) 1,000 (2030) - 33% green hydrogen
Germany 18% (2020) 500 100 (2019) - -
France 32% (2020) 50,000 (2023) 100 (2023) -
20-40% green
hydrogen
Netherlands
14.5%
(2020) 2,000 (2020) 5 - -
Norway
67.5%
(2020) 50,000 200 - -
Denmark 30% (2020) 75 10 - -
China
770 GW
(2020) 1 million (2030) 500 (2030) 0.2 (2030) -
South Korea 11% (2030) 630,000 (2030) 520 (2030) - -
Japan
22-24%
(2030)
800,000 (2030)
and 1,200 buses
(2030 320 (2030) 0.3 (2030) -
India
175 GW
(2022) 1 million (2020) - - -
Australia
33,000 GWh
(2020) - - 0.5 (2030) -
New Zealand 100% (2035) - -
0.7 (Taranaki only,
2030)
Taranaki proposes
exporting around
0.5–1 GW, or 40% of
Table - Country-specific renewable
energy and hydrogen targets
Source: Deloitte Research and IEA
Report

11. IMPACT ON GDP (AUSTRALIA SCENARIO)
SCENARIO CONSIDERATION
Scenario
Technology
Learning
Rate
Electrolyser
Proportions by
Technology
Carbon intensity
of the Australian
electricity grid
Sensitivity analysis
for carbon intensity
of the Australian
electricity grid
1. Energy of the
future
The costs of
producing
hydrogen
reduce
aggressively
making
hydrogen
much
cheaper in
the long-run
than in the
other
scenarios.
Aggressive transition
away from fossil-fuel
based hydrogen
production
technologies to
electrolyser
technologies to 90%
by 2050.
Net zero by 2050 Net zero by 2050
2. Targeted
deployment
As Scenario
1.
A moderate transition
to electrolysers with
50% penetration by
2050.
Consistent with a
linear extrapolation
to 0.2kg CO2/kWh
produced in in 2050
Consistent with a
linear extrapolation to
0.4kg CO2/kWh
produced in in 2050
3. Business as
usual
Slow
reduction in
technology
costs.
A slow transition to
electrolysers with
only 5% penetration
by 2050.
Consistent with a
linear extrapolation
to 0.4kg CO2/kWh
produced in 2050
Consistent with a
linear extrapolation to
0.4kg CO2/kWh
produced in 2050
4. Electric
breakthrough
Moderate
reductions in
technology
costs.
As Scenario 1
Consistent with a
linear extrapolation
to 0.2kg CO2/kWh
produced in in 2050
Consistent with a
linear extrapolation to
0.4kg CO2/kWh
produced in in 2050

12. IMPACT ON GDP (AUSTRALIA SCENARIO)
Proportion of market captured by scenarios by 2050
%
Proportion of Domestic Market
Captured by 2050
Proportion of International Market Captured by
2050
Scenario Pipeline
Gas
Industrial
Heat
Steel Transport
Fuels
Feedstock Pipeline
Gas
Industrial
Heat
Steel Transport
Fuels
Feedstock
1. Energy of the
future 40 50 100 50 50 25 30 100 50 50
2. Targeted
deployment 10 15 100 10 25 10 15 100 10 25
3. Business as
usual 5 8 15 3 13 10 15 30 5 13
4. Electric
breakthrough 1 4 0 0 25 1 4 10 0 25

13. IMPACT ON GDP (AUSTRALIA SCENARIO)
• The development of the Hydrogen sector has a positive impact on Australian GDP under
all three Policy Scenarios compared to the Business as usual scenario. In the Energy of
the future scenario, GDP is projected to be around $26 billion higher by 2050.
• Under the Targeted deployment scenario, Australian GDP is projected to be around $11
billion higher
Projected deviation in Australian
GDP from Business as usual
scenario, selected policy scenarios
GDP of Australia in 2019 is 1392.70
billion US $
Across all modelled regions, the
impacts to GDP are larger in the
Energy of the future scenario than in
the Targeted deployment scenario

14. IMPACT ON EMPLOYMENT (AUSTRALIA)
• The impact of the Hydrogen sector has a net positive impact on Australian employment,
although this impact is relatively modest. Compared to the Business as usual scenario,
employment in the Energy of the future scenario is projected to be around 16,700 Full
Time Equivalent (FTE) jobs higher (0.09%) in 2050
0
2
4
6
8
10
12
14
16
18
2020 2025 2030 2035 2040 2045 2050
FTEs
('000)
H2: Energy of the Future H2: Targeted Deployment
Projected deviation in employment from
Business as usual scenario, Energy of the
future and Targeted deployment scenarios
Source: DAE-RGEM

15. IMPACT ON EMPLOYMENT (UK)
Th
UP stream
Mid stream
Down stream

16. INTERNATIONAL COMPETITIVENESS
The cost of hydrogen varies significantly across regions, as it depends heavily on the prices
and availability of energy inputs

17. THANK YOU