(Bloomberg) -- Austria may need to boost its renewable power generation by 50% to meet demand from steelmakers seeking to replace fossil fuels with hydrogen.
The finding emerged at a discussion this week convened by the country’s biggest utility, which is probing the enormous consequences for electricity and carbon markets of efforts to rein in global warming.
Verbund AG estimates that producing hydrogen in the volumes needed to help cut industrial emissions could take an additional 30 terrawatt-hours of renewable electricity annually -- equivalent to some 20 times the output of the world’s biggest offshore wind farm.
“We have the resources and technology,” Verbund AG Chief Executive Officer Wolfgang Anzengruber said at a briefing in Fuschl, Austria. “Now, we have to come to a point where it’s cheaper to cut carbon dioxide than it is to pay a penalty for its emission. The cost of not doing so will become significantly higher.”
Verbund is spearheading Austria’s drive to turn the universe’s lightest element into fuel for its heaviest industry.
Clean-burning hydrogen could replace coal and coke in mills that currently release about 1.7 tons of carbon dioxide for every ton of steel manufactured. The sector accounts for as much as 9% of global carbon emissions, according to the World Steel Association.
“What we need are power-to-fuel plants that are above all electrolysis plants,” said Katharina Beumelburg, a senior vice president at Siemens AG’s gas and power division, who was at the meeting. “The most important input is cheap, green electricity.”
Siemens and Verbund are jointly developing Europe’s biggest electrolyser at Voestalpine AG’s steel plant in Linz, Austria. By the end of this year, that 6-megawatt unit is scheduled to begin feeding hydrogen into blast furnaces as a reduction agent to remove oxygen from iron ore.
The steel industry could adopt hydrogen for between 10% and 50% of output by mid-century given the right carbon pricing, BloombergNEF analysts wrote in a report last month. The London-based researcher sees hydrogen technology becoming competitive with high-cost, coal-based plants by 2030.
“Hydrogen will continue to be a growth market,” said Timur Gul, who heads energy technology policy for the International Energy Agency and also attended the Austrian meeting. The element is already widely used by chemical and fertilizer makers and is poised to “break out” in other sectors, he said.
Austrian politicians agreed on 540 million euro ($597 million) renewable energy package on Friday that will build out wind and solar generation, according to a statement. The country is also looking at converting excess renewable capacity into hydrogen. The underground reservoir Austria has identified could hold gas equivalent to 92 terrawatt-hours of power.
Verbund’s Anzengruber said his utility probably wouldn’t need to cover all of the new electricity demands required for producing hydrogen on industrial scales.
“It could be that we import hydrogen like we do with oil right now,” the CEO said. “It could be cheaper to produce elsewhere.”
(Adds new funding, hydrogen storage in the 11th paragraph)
To contact the reporter on this story: Jonathan Tirone in Vienna at email@example.com
To contact the editors responsible for this story: Reed Landberg at firstname.lastname@example.org, Rob Verdonck
For more articles like this, please visit us at bloomberg.com
©2019 Bloomberg L.P.