HYDROGEN AND FUEL CELLSAN UPDATE FROM EUROPE, INCLUDING THE UK
A presentation for the 7th FC International
meeting, organised by FCS & FCDIC.
February 26th 2019, Tokyo.

CONTACT:
Cate Lyon | Analyst | Gas Heating Service
Email:Tel:
Web:cate.lyon@delta-ee.com+44 (0)131 625 3338
https://www.delta-ee.com/GHS

AgendaAn update from Europe, including the UK
1. Introduction to Delta-ee
2. The European micro-CHP market: an update

3. Hydrogen in Europe: an update
4. Q & A

LYON_FCDIC_2019© Delta Energy & Environment Ltd 20192Introduction to Delta-eeResearch and consulting services for the energy transition
Key facts:

Delta-ee ‘Gas Heating Service’

Core competency areas:

Est. 2003
UK-based(Scotland)
Sites across EUAssociatesworldwide
11 subscription
services
2x European Energy
Summits per year

LYON_FCDIC_2019

We help clients succeed in the transition from ‘old’
energy to ‘new’ energy.
◼ Centralised →Distributed◼ Carbon intensive →Low Carbon◼ Commodity sales →Service Orientated◼ Meter points →Customer Centric◼ Value is upstream →Value is Downstream© Delta Energy & Environment Ltd 2019

Selected clients:

3Agenda
An update from Europe, including the UK
1. Introduction to Delta-ee
2. The European micro-CHP market: an update

3. Hydrogen in Europe: an update
4. Q & A

LYON_FCDIC_2019© Delta Energy & Environment Ltd 20194

We have been covering micro-CHP since 2004
Over this time, product availability has greatly improved

LYON_FCDIC_2019© Delta Energy & Environment Ltd 20195

The EU market has gone through several phases
Fuel cells (natural gas) are now the dominant technology

2005

ICE decline
ICE age

LYON_FCDIC_2019

Peak Stirling

20182020

2018 sales:
6,500-7,000units

Fuel cellspell© Delta Energy & Environment Ltd 20196

The EU market has gone through several phases
Fuel cells (natural gas) are now the dominant technology
UK fuel cell micro-CHPplayers:

2005

ICE decline
ICE age

LYON_FCDIC_2019

Peak Stirling

2018

2020

Fuel cellspell© Delta Energy & Environment Ltd 20197

Incentives drive sales – but these vary widely, affecting uptake
In most countries we see a shift towards tax-based mechanisms
Incentive type:

GermanyNational grantState grants



Regional grants

UK|

Export tariffTariff tax exemptionsGeneration tariff

LYON_FCDIC_2019

Italy

Net metering

CHP / green / white certificates

Netherlands

VAT rebate
Low-interest loans

BelgiumReduced VATFrance

 available
 withdrawn future uncertain






© Delta Energy & Environment Ltd 2019

8

AgendaAn update from Europe, including the UK
1. Introduction to Delta-ee
2. The European micro-CHP market: an update

3. Hydrogen in Europe: an update
4. Q & A

LYON_FCDIC_2019© Delta Energy & Environment Ltd 20199

Europe’s interest in hydrogen is growingGermany is market leader; mobility and power-to-gas dominate

Map of European
hydrogen activity:

Leading markets:◼ Germany◼ UK◼ France◼ Netherlands (emerging)
Applications:◼ Mobility◼ Power-to-gas
Production:◼ Steam methane reforming◼ Electrolysis

vsMarketleader

LYON_FCDIC_2019© Delta Energy & Environment Ltd 2019

Significant
activity

Emerging

10Key stakeholders in hydrogen development in Europe

Technical support

Heating OEMs & fuelcell developers

LYON_FCDIC_2019

Oil & Gas

Electrolyser manufacturers© Delta Energy & Environment Ltd 2019

Automotive

Utilities

Hydrogen as part of the UK solutionGas network companies have kick-started the movement◼ Hydrogen island◼ ‘Windgas’◼ Heat, power, vehicles◼ Proof of concept plus +practical element◼ Local generation + injection
at 3 sites◼ H2 regional system by 2026
◼ Produce, transport, store◼ Blended grid injection◼ ‘H2 campus’◼ 20% H2 blend◼ live trial begins this summer◼ Hydrogen local energy system◼ Fleet refuelling, storage, power
generation◼ Phase 1: Cost and safety feasibility study
for 100% H2 grid conversion◼ Phase 2: Convert 3.7M homes between
2028-2034◼ New H2 grid to satisfy 70% heat needs◼ H2 “a credible option”◼ Part of energy mix; H2 for back-up◼ Hybrid hydrogen heat pumps◼ £25M competition◼ Develop 100% H2 appliances(heat & power)◼ Unoccupied demo’s by 2021

◼ £20M competition◼ Bulk green H2 production◼ Feasibility + demos= GDN-driven initiative
LYON_FCDIC_2019© Delta Energy & Environment Ltd 201912

Hydrogen production and end-user costs‘Green’ hydrogen expected to be cost-competitive by 2030
Hydrogen from methane:

Hydrogen from electrolysis:

METHANE210g/kWhWINDELECTRICITY
16g/kWh

100%

27%

GREY HYDROGEN
288g/kWhCARBONDIOXIDEBLUE HYDROGEN
86g/kWh

LYON_FCDIC_2019

GREEN
HYDROGEN
23g/kWh

73%

70%

GRID
ELECTRICITY
233g/kWh

ELECTROLYSIS

SMR

CCS

100%

70%

BROWN
HYDROGEN
333g/kWhEnd-user cost estimates:◼ ‘Blue’ hydrogen = £2/kg H2, equivalent to £0.05p/kWh;retail price £0.09p/kWh.
◼ ‘Green’ hydrogen:◼ EU target cost = €3/kg by 2030.
◼ IEA 2040 expected electricity production costs infavourable renewable locations: $0.03/kWh -> $2/kg
or $0.06/kWh H2.

© Delta Energy & Environment Ltd 201913

Hydrogen for heating
Hydrogen boilers are competitive for smaller homes, including
most new-build properties, by 2030 (Delta-ee analysis; UK).

£2,00020.00
BREAK-EVEN
THERMAL DEMAND
15.00£1,000

10.00

5.00

£0Unit Heat Cost (p/kWh)Annual Heating Cost (£ per year)

Costs for heating UK housing stock with H2 boiler vs. electric Air
Source Heat Pump

0.00
4,000

6,000

8,000 10,000 12,000 14,000 16,000 18,000
Annual Thermal Demand (kWh)

LYON_FCDIC_2019© Delta Energy & Environment Ltd 201914

Find out more: Delta-ee Summits
Events looking at the future of energy on the customer side of the meter

New Energy Summit

European Heat Summit

28th-29th May 2019, Amsterdam, Netherlands

25th-26th September 2019, London, UK

Exploring the transition from old to new energy

Debating how Europe will decarbonise heat◼ Day 1: Drill down into the new energy market◼ Day 1: Parallel roundtable discussions onelectrification & high-efficiency gas markets◼ Evening 1: Networking dinner & activity◼ Day 2: Strategic issues, business models andjoining the dots across the new energy space
LYON_FCDIC_2019◼ Evening 1: Networking dinner & activity◼ Day 2: Interactive plenary sessions exploringcustomers, business models, pathways© Delta Energy & Environment Ltd 201915

Thank you for your attention
Questions?
CONTACT:
Cate Lyon | Analyst | Gas Heating Service
Email:Tel:
Web:

LYON_FCDIC_2019

cate.lyon@delta-ee.com+44 (0)131 625 3338
https://www.delta-ee.com/GHS© Delta Energy & Environment Ltd 201916