6.8 million tons: Estimated hydrogen demand in 2030
conundrum where large-scale producers are struggling to find sufficient bankable off takers that would like to lock in their demand for long enough to enable the producer to finance their investment. Although it is not entirely clear how much hydrogen demand there will be in 2030, a fair estimate could lead to 6.8 million tons based on the obligations articulated in the Renewable Energy Directive III. 25% of that would be 1.7 million tons of hydrogen by 2030, which would kickstart the European market for hydrogen immediately. How do you envision the infrastructure requirements, such as salt caverns and hydrogen backbones, evolving to support a strategic hydrogen reserve? If we assume a strategic reserve of 1.7 million tons of hydrogen by 2030, we will need more than 100 salt caverns by then. This is a huge undertaking so we should start immediately. It should be noted that salt caverns are available, but not equally available across the continent. A hydrogen backbone would allow access to European strategic reserves, which may be in another EU member state. The paper mentions disconnecting supply from demand to kickstart the hydrogen market. How can a strategic reserve play a role in stabilizing this dynamic? Like oil and gas reserves, a strategic hydrogen reserve would be publicly mandated but would not necessarily be managed by a public entity, this could be outsourced. However, it would immediately create a buying pool into which producers could sell their hydrogen, let’s say for a period of initially 10 years. Once the reserves are full, the entity that manages the reserve could also sell from that reserve and that would allow for a decoupling of production and demand. What lessons can be drawn from Europe’s existing strategic reserves for oil and natural gas when designing a reserve for hydrogen? There are current mechanisms that govern the way strategic reserves are managed. But also recently, especially after the Russian invasion of Ukraine, Europe has designed mechanisms to strategically
countries such as Chile, Namibia and Australia are following suit. In your recent paper, you advocate for a strategic hydrogen reserve. What are the primary objectives of such a reserve, and how could it address current market challenges? Strategic energy reserves have been a feature of a secure energy system for a long time. When you consider that Europe has had strategic petroleum reserves since the IEA was founded, and has more recently upped the ante for strategic gas reserves, it is very logical that Europe will also introduce a strategic reserve for hydrogen. It should be noted that Europe has more than 1000 terawatt hours of each oil and gas in strategic reserves, covering more than 25% of annual demand. If you understand that, you may want to consider starting with a strategic hydrogen reserve right now. This would have several advantages. You would create an immediate pool into which potential producers could sell their hydrogen into. And we would have a solution for the current
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THE FUTURE OF ENERGY
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