Energy

IEA: Hydrogen policies needed to match growing projects and investment

Hydrogen storage on the left with wind turbines in the background and solar panels on the right.

Global hydrogen demand reached 97Mt in 2023, an increase of 2.5% compared to 2022. (Image source: Adobe Stock)

According to the International Energy Agency (IEA), while investment and projects in low-emissions hydrogen are increasing, policies to stimulate demand in key sectors are required to accelerate deployment

These are the findings published in the organisation’s Global Hydrogen Review 2024, an annual publication that tracks production and demand worldwide in a bid to inform energy stakeholders on the status and future prospects of low-emissions hydrogen.

The research shows that a wave of new projects indicates the growing momentum around low-emissions hydrogen despite challenges such as regulatory uncertainties, persistent cost pressures, and a lack of incentives to accelerate demand from potential consumers. In the last 12 months, the number of projects that have reached final investment decision has doubled – this would increase today’s global production of low-emissions hydrogen fivefold by 2030. The total electrolyser capacity has reached final investment decision now stands at 20GW globally.

However, the IEA reports hesitancy from developers due to a lack of clarity on government support before making investments. As a result, most potential projects are still in planning or early-stage development, and some larger projects face delays or cancellations.

“The growth in new projects suggests strong investor interest in developing low-emissions hydrogen production, which could play a critical role in reducing emissions from industrial sectors such as steel, refining and chemicals,” remarked IEA executive director Fatih Birol. “But for these projects to be a success, low-emissions hydrogen producers need buyers. Policymakers and developers must look carefully at the tools for supporting demand creation while also reducing costs and ensuring clear regulations are in place that will support further investment in the sector.”

Hydrogen demand against production

Further key findings from the report include a notable gap between government goals for production and demand. According to the research, production targets set by governments add up to as much as 43mn tonnes per year by 2030, but demand targets only total 11mn tonnes by 2030. While some government policies are already in place to stimulate demand, the progress made in the hydrogen sector so far is not sufficient to meet climate goals.

Moreover, as a nascent sector, low-emissions hydrogen still faces technology and production cost pressures, with electrolysers in particular slipping back on some of their past progress due to higher prices and tight supply chains. A continuation of cost reductions relies on technology development, but also optimising deployment processes and moving to mass manufacturing to achieve economies of scale.
Cost reductions will benefit all projects, but the impact on the competitiveness of individual projects will vary. Industrial hubs – where low-emissions hydrogen could replace the existing large demand for hydrogen that is currently met by production from unabated fossil fuels – remain an important untapped opportunity by governments to stimulate demand, according to the IEA.

Hydrogen potential in emerging markets

Regarding emerging markets and developing economies (EMDEs), the report notes that such regions (particularly Africa and Latin America) hold significant potential for low-cost, low-emissions hydrogen production.

To unlock this potential, the IEA advises, governments of advanced economies and multilateral development banks should look to provide targeted support such as grants and concessional financing in order to address key challenges that are inhibiting project developers in these countries – most notably, around financing. Developing these projects, the research reports, can help cover domestic needs, reduce import dependencies and potentially enable the export of hydrogen or hydrogen-based products.

The IEA is not the only organisation that has noted the significant opportunities that hydrogen can offer Africa. Click here to discover why Synergy Consulting sees the emerging hydrogen economy as a key element in the sustainable future of southern Africa.

Liebherr explores green ammonia potential for power generators

The representatives of Liebherr and BGG at the signing ceremony of the partnership.

Representatives from Liebherr-Components, Liebherr Mining and BGG. (Image source: Liebherr)

Liebherr has announced that its mining and components product segments will collaborate with Bruno Generators Group (BGG) to investigate low emission power generation through the use of green ammonia as fuel

Having already investigate ammonia as a power source for dual-fuel internal combustion engines, Liebherr will now pool its expertise with BGG, a company that specialises in the design, development and production of power generators, battery energy storage systems and mobile energy solutions.

“We’re thrilled to be working with BGG in this incredibly exciting project. Their innovative mindset and tracked development and delivery of low emission solutions are a perfect match for us as we work towards our zero emissions targets,” remarked Oliver Weiss, executive vice president, R&D, engineering and production, Liebherr-Mining Equipment SAS. “When our combustion engines business unit saw promising results from ammonia as a low and zero emission power source after multiple test bench runs, we were excited to see how we could capitalise on this to provide even more ways our customers can pursue zero emissions.”

Sustainable solutions

Renato Bruno, chief executive officer, BGG, added, “We are very proud of partnering and joining forces with Liebherr Mining in this project. Together, we share a common vision with an uncompromised commitment to sustainability, and we strive to lead the industry in responsible practices.

“This partnership represents an incredible milestone in our pursuit of sustainable solutions for the benefit of our customers in the mining segment. Sharing and blending our respective expertise will further enhance and naturally boost our innovation mindset, accelerating our journey toward a net zero future.”

Wärtsilä signs O&M agreement renewal for Ndola power plant

The plant operates with six Wärtsilä 32 engines and six Wärtsilä 32 twin turbochargers. (Image source: Wärtsilä)

Wärtsilä has signed a renewal of its operations & maintenance (O&M) agreement covering the 105MW power plant in Zambia

The plant is owned by Ndola Energy Company (NECL) and will continue the agreement which has been in force since 2013.

Brian Mushimba, CEO at NECL, remarked, “We have worked closely with Wärtsilä for a number of years, and we are confident that they will continue to successfully operate and maintain the plant to ensure reliable supply of electricity.”

By ensuring the reliability and availability of the plant, NECL can meet its power purchase agreement obligations with Zambia’s utility, ZESCO. While hydropower is the main source of electricity in the country, the nation is facing an electricity shortage due to a drought that has impacted the renewable resource. As such, the NECL, is a vital contributor to maintaining a reliable electricity supply.

"We value long-term partnerships and collaboration with our customers,” commented Marc Thiriet, energy business director, Africa at Wärtsilä Energy. “This agreement renewal is a good example of our commitment to support our customers throughout the lifecycle of their installation and ensure continued productivity and profitability of their operations. Our long-term presence also allows us to support the local economy and community in countries such as Zambia.”

Gold certification for Bboxx carbon credit programme

A Bboxx employee installing a solar panel onto a roof.

Bboxx Power solar panel installation. (Image source: Bboxx)

Bboxx, a data-driven super platform that is dedicated to transforming lives and connecting consumers, has received Gold Standard certification for carbon credit programmes in multiple countries across sub-Saharan Africa

The certification – a voluntary carbon offset programme focused on progressing the UN SDGs – covers a range of clean energy solutions including solar home systems, PAYGO clean cooking solutions, and solar-powered water pumps. The programme covers the company’s operations in multiple African countries including Rwanda, Kenya, Nigeria, Togo and the DRC.

Anthony Osijo, CEO of Bboxx, remarked, “Bboxx is leading the way in the delivering a range of clean energy solutions. It is our mission to accelerate clean energy access and adoption and, as well as products and services, the deployment of carbon credits will enable more capital to flow into this crucial part of the energy transition in Africa.

“This Gold Standard certification solidifies Bboxx's position as a leader in decentralised clean energy, showcasing the company's dedication to innovation, social impact, and environmental stewardship as well as meeting and surpassing the rapidly evolving expectations of our consumers.

“It’s our responsibility to commit to scalability and ensure we’re providing more people with access to innovative solutions which will build the resilience of communities on top of being a significant market opportunity.”

Bboxx’s clean cooking programme enables families to access safer cooking fuels while paying for only the energy they use. Investing in this carbon off-setting programme will create annual credits by replacing traditional cookstoves with efficient LPG stoves. According to Bboxx, the projects are expected to offset more than 20mn tons of carbon emissions, generating US$100mn worth of carbon credits.

Earlier this year, Bboxx reiterated its dedication to Africa by moving its headquarters from London to Kigali. Click here to find out more.

Renewables prove resilient against fossil fuel recovery

Wind turbines in the background with solar panels in the foreground.

According to IRENA solar PV and onshore wind will have the biggest impact on the tripling of renewables. (Image source: Adobe Stock)

According to the International Renewable Energy Agency (IRENA), renewables are remaining competitive despite fossil fuel prices returning closer to historical cost levels

These findings were revealed in the Renewable Power Generation Costs in 2023 report, released by IRENA at the Global Renewables Summit during the UN General Assembly in New York. It showed that the years of falling costs and improving technology for renewables (particularly in regard to solar and wind), has made the socio-economic and environmental benefits of renewable energy development uniquely compelling.

As such, the organisation has shown that of the 473GW of renewables added in 2023, 81% had lower costs than their fossil fuel alternatives. The report also found that the renewable power deployed globally since 2000 has saved up to US$409bn in fuel costs within the power sector.

“Renewable power remains cost-competitive vis-à-vis fossil fuels,” remarked IRENA’s director-general Francesco La Camera. “The virtuous cycle of long-term support policies has accelerated renewables. In return, growth has led to technology improvements and cost reductions. Prices for renewables are no excuse anymore, on the contrary. The record growth of renewables in 2023 exemplifies this. Low-cost renewables represent a key incentive to significantly increase ambition and triple renewable power capacity by 2030, as modelled by IRENA and set by the UAE Consensus at COP28.”

Triple renewable target

The goal of tripling renewables by 2030 was set at COP28 and requires global renewable energy capacity to reach 11.2TW by the end of the decade. This averages out to 1,044GW of new capacity added annually in this time. Previously, IRENA has warned that the world is at great risk of missing this target and the new report offers advice to ensure this is not the case.

Principally, it suggests that progress must be supported by key energy transition enablers such as storage. Battery storage project costs have dropped by 89% between 2010 and 2023, facilitating the integration of high shares of solar and wind capacity by helping address grid infrastructure challenges.

“In the coming years, remarkable growth across all renewable energy sources is expected, giving countries great economic opportunities,” added La Camera. “Our analysis indicates that solar PV and onshore wind will have the biggest impacts on the tripling of renewables. Thanks to low-cost renewables in the global market, policy makers have an immediate solution at hand to reduce fossil fuels dependency, limit the economic and social damage of carbon-intensive energy use, drive economic development and harness energy security benefits.”

In 2023, the global weighted average cost of electricity from newly commissioned renewable projects across most technologies fell, for solar photovoltaics by 12%, for onshore wind by 3%, for offshore wind by 7%, for concentrating solar power by 4% and for hydropower by 7%.

In non-OECD economies where electricity demand is growing and new capacity is needed, renewable power generation projects with lower costs than fossil fuel-fired equivalents for their country and region will significantly reduce electricity system costs over the life of their operation.