Modelling challenges for Hydrogen and Synfuel pathways in Europe

1. IER Modeling Hydrogen Pathways in Europe in TIMES PanEU IEA-ETSAP Workshop New York 02.12.2022 Drin Marmullaku Prof. Markus Blesl

2. 01 Motivation Agenda 12/18/2022 IER Universität Stuttgart 2 02 Hydrogen Modeling 03 Frist Preliminary Results 04 Conclusion & Next Steps

4. 12/18/2022 IER Universität Stuttgart 4 The way to climate neutrality in Germany by 2045 and the role of zero-emission energy carrier Motivation 2020 2030 2045 ▪ Strong dependence on fossil imports ▪ 75% of primary energy consumption through imports ▪ 35 % Oil ▪ 25 % Natural Gas ▪ 8 % Coal ▪ 6 % Uranium ▪ Green hydrogen and e-fuels do not play a significant role ▪ Decline of fossil imports ▪ Climate-neutral hydrogen and its imports are low compared to total energy consumption ▪ Few supply options and infrastructures for H2 and e-fuels ▪ Expansion of the H2 infrastructure in progress ▪ Entire energy demand covered by domestic or imported zero-emission energy sources ▪ Substantial need for imports due to limited renewable energy potential ▪ „In the course of the increase in H2 imports from 2030, it can be assumed that a robust H2 infrastructure will exist by 2045, both within Germany and the EU as well as for imports “ [European Hydrogen Backbone, 2020] Status Quo Intermediate Stage Target

5. 12/18/2022 IER Universität Stuttgart 5 Demand for Hydrogen and E-Fuels in Germany Motivation 0 100 200 300 400 500 2030 2045 2030 2045 2030 2045 TWh E-Fuel-Demand Import BDI, 2021b Prognos, Wuppertal- Institut et al., 2021 dena, 2021 57 305 158 4 198 0 100 200 300 400 500 2030 2045 2030 2045 2030 2045 TWh Hydrogen Demand BDI, 2021b Prognos, Wuppertal- Institut et al., 2021 dena, 2021 43 237 63 265 66 458 Domestic ▪ Increasing demand for H2 and E-Fuels ▪ Most of the H2 and E-Fuel demand is covered by imports ▪ Import options limited in 2030 due to lack of European infrastructure and supply options → Early analysis of national and international supply options and infrastructure

7. 12/18/2022 IER Universität Stuttgart 7 TIMES-PanEU Energy System Model: Overview Methodology ▪ Bottom-Up Model, model language GAMS ▪ Multi-regional (EU27 + UK, CH, NO) ▪ Time horizon 2010-2050 ▪ All relevant sectors and full competition between technologies and energy carriers ▪ Trade between regions and non-EU countries → detailed energy system analysis for Germany/Europe possible

8. 12/18/2022 IER Universität Stuttgart 8 Times PanEU – Hydrogen Trade Hydrogen Modeling Module 1: endogenous H2 trade within EU Module 2: exogenous H2 trade with Non- EU TIMES PanEU • TIMES PanEU – H2INFRA

9. 12/18/2022 IER Universität Stuttgart 9 Hydrogen Module: Generell Overview Interactions Supply Central Production Decentral Production Import/ Export Delivery Infrastructure Demand H2-Technologies • „Chicken-Egg Problem“ • Competition between different emission-free energy carriers *simplified overview of the hydrogen model

10. 12/18/2022 IER Universität Stuttgart 10 Hydrogen Trade FR ES Trade Process H2 Production (central) Transmission Grid Distribution Grid Fuel Tech Trade Process H2 Production (central) Transmission Grid Distribution Grid Fuel Tech GER H2 Production (central) Transmission Grid Distribution Grid Fuel Tech Methodology: Uniliteral Trade between EU Regions H2 H2TRADE H2 H2TRADE H2 → Own consumption and conduction possible

11. 12/18/2022 IER Universität Stuttgart 11 Trade Parameters Modeling of Unilateral Trade Process: Hydrogen Pipeline capacity Investment k1 k2 small medium k0 large Investment ▪ Pipeline costs at „medium“ capacities for reference scenario ▪ Pipeline cost at low capacities are underestimated ▪ Pipeline costs at large capacities are overestimated ▪ Unrealistic small capacities can be built ▪ Lumpy Investments → high increase of solution time (MIP) Distance matrix ▪ Linking all regions with their neighbor regions (>120 links) ▪ Distance = Beeline between region centers ▪ Detour factor 1.4, based on [6] Data Danish Energy Agency 2030 2050 2030 2050 Capacity Investment Fixed O+M GW Euro/MW/m Euro/MW/km/year small 0,5-1 0,70 0,70 0,25 0,2 medium 1-4 0,40 0,40 0,25 0,2 large >6 0,20 0,20 0,25 0,2

13. 12/18/2022 IER Universität Stuttgart 13 Scenariodesign Reference Scenario ▪ Pipeline Costs „medium“ → Parameters for Pipelinesize medium Scenario „High Cost“ ▪ Pipeline Costs „high“ → Parameters for Pipelinesize small Scenario „Low Cost“ ▪ Pipeline Costs „low“ → Parameters for Pipelinesize large 1. Calculation Scenario‘s 2. Adjusting trade links a) Trade links with capacity > 0,5 GW = 1 b) All links with capacity < 0,5 GW = 0 (nearly 0.15 m as the smallest diameter for natural gas pipelines [6]) 3. Calculation Scenario‘s 4. Postprocessing Trade Results Process Data Danish Energy Agency 2030 2050 2030 2050 Pipeline- size Capacity Investments Fixed O+M GW Euro/MW/m Euro/MW/km/year small 0,5-1 0,70 0,70 0,25 0,2 medium 1-4 0,40 0,40 0,25 0,2 large >6 0,20 0,20 0,25 0,2 EU carbon emission target: -55% reduction in 2030 and net zero emissions in 2050

14. 12/18/2022 IER Universität Stuttgart 14 Results Reference Scenario: H2 Production 2030 2035 2040 2045 2050 • Hydrogen ramp-up starts in 2035/40 • Largest H2 producers: GER, SE, NO, UK, FR • Hydrogen production mainly via electrolyser *26 GW *Capacity Electrolyser

15. 12/18/2022 IER Universität Stuttgart 15 Results Reference Scenario: H2 Trade and Pipeline Capacity Energy Trade Capacity 2030 2035 2040 2045 2050 2030 2035 2040 2045 2050

16. 12/18/2022 IER Universität Stuttgart 16 Results Scenario Comparison Annual EU H2 Trade Volume compared to the reference scenario -80% -60% -40% -20% 0% 20% 40% 60% 80% 100% 120% 140% 2 0 3 0 2050 Low Costs Ref. High Costs + 116 % + 16 % - 26 % - 53 % Aggregated EU H2 Trade Capacity compared to the reference scenario -60% -40% -20% 0% 20% 40% 60% 80% 100% 2030 2 0 5 0 Low Costs Ref. High Costs + 12 % - 28 % + 92 % - 48 % → Scenario „Low Cost“: Fast ramp-up for hydrogen trade → Scenario „High Cost“: Slow ramp-up for hydrogen trade

18. Conclusion • Including H2 and synfuel/syngas imports from Non-EU Regions • Extending Industry H2 Technologies • Validation of H2 technologies for methanol, ammonia, aromates, olefins • H2 demand expect to increase (strong impact on H2 infrastructure) • Highest H2 Production via Electrolysers in Germany • Highest H2 Import Demand in Germany • High Exports from the „North-Corridor“ (NO, SE) • Sensitivity analysis on investment show a strong influence on H2 Trade • Lower costs leads to faster hydrogen ramp-up • High costs leads to a slower hydrogen ramp-up 12/18/2022 IER Universität Stuttgart 18 Conclusion & Next Steps Next Steps

19. [1] Staffell et al. (2019) The role of hydrogen and fuel cells in the global energy system [2] Deutsche Energie-Agentur GmbH (Hrsg.) (dena, 2021). dena-Leitstudie Aufbruch Klimaneutralität [3] Prognos, Öko-Institut, Wuppertal-Institut (2021): Klimaneutrales Deutschland 2045. Wie Deutschland seine Klimaziele schon vor 2050 erreichen kann [4] Zusammenfassung im Auftrag von Stiftung Klimaneutralität, Agora Energiewende und Agora Verkehrswende [5] Bundesverband der Deutschen Industrie (BDI) (2021): KLIMAPFADE 2.0. Ein Wirtschaftsprogramm für Klima und Zukunft. [6] Çağlayan, Dilara Gülçin (2020): A robust design of a renewable European energy system encompassing a hydrogen infrastructure. Unter Mitarbeit von Detlef Stolten und Andreas Jupke. Aachen: Universitätsbibliothek der RWTH Aachen. 12/18/2022 IER Universität Stuttgart 19 Sources

20. Thank you for your attention! IER Institut für Energiewirtschaft und Rationelle Energieanwendung Drin Marmullaku Institute of energey economics and rational energyuse (IER) University Stuttgart Drin.marmullaku@ier.uni-stuttgart.de T: +49 711 685-87827 IER UniversitätStuttgart 12/18/2022

Modelling challenges for Hydrogen and Synfuel pathways in Europe

Modelling challenges for Hydrogen and Synfuel pathways in Europe

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Modelling challenges for Hydrogen and Synfuel pathways in Europe