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The Future of Hydrogen Chapter 5: Opportunities for hydrogen in transport, buildings and power It will not necessarily be enough for a product to offer lower running costs over time if it is more expensive at the outset. Consumers often give more weight to upfront purchase prices than to overall lifetime costs. Heating equipment costs vary substantially depending on factors such as unit capacity, brand, availability in local markets and overall size of product demand. In addition, consumer preference will also matter on issues such as safety and ease of installation. Moreover some types of building will be better suited to the use of hydrogen than others. Large-scale co-generation, for example, may be more cost-effective in terms of both capital and operational expenditure for large commercial buildings than for small-scale residential ones. Similarly, large-scale fuel cell co-generation may be well-suited to the supply of renewable electricity to buildings adapted with high-performance heat pumps and clean district heat (as a replacement for hard-to-convert gas-based systems), but less well-suited to other types of buildings. If 100% hydrogen is ultimately able to compete in terms of capital and operational costs in some markets, the market potential in buildings is very large indeed. Heat demand will inevitably remain central to energy demand in buildings, even in a low-carbon context. In a Paris-compatible pathway, heat demand would be expected to represent more than half of global building energy consumption in 2030, with about 500 Mtoe of natural gas used for space and water heating in buildings annually. Of this, theoretical potential hydrogen demand might be on the order of 12–20 MtH2/yr in key markets (Canada, the United States, Western Europe, Japan, Korea, the Russian Federation [“Russia”] and China) if all gas boiler equipment installed or replaced at expected stock turnover rates between today and 2030 were hydrogen-ready (Table 8). Combining this with low-concentration hydrogen blends in the wider natural gas grid gives an upper bound of 14– 24 MtH2 global hydrogen demand in 2030. Table 8. United States 147 Japan 14 Russia 43 1.2–1.5 5.1–7.7 2.0–3.5 0.4–0.6 1.5–1.8 1.5–2.2 2030 natural gas demand for heat in buildings and indicative theoretical hydrogen demand in selected regions Region Natural gas demand (Mtoe) Competitive price range for hydrogen (USD/kgH2) Indicative hydrogen demand (MtH2) Canada 21 0.8–1.2 0.7–1.1 Western Europe 80 2.0–3.0 0.5–0.7 Korea 11 0.9–1.9 2.8–4.2 China 51 1.2–1.4 1.8–2.7 Notes: Natural gas demand is for space heating and hot water production and takes account of building envelope improvements under a Paris-compatible pathway. Indicative demand assumes that hydrogen production, transmission and distribution is within the competitive range shown here and does not include potential hydrogen demand for hydrogen-based fuels. Excludes natural gas use in production of commercial heat. Western Europe includes France, Germany, Italy and the United Kingdom. Indicative of direct hydrogen use in buildings. The indicative demand takes into account typical lifetimes of existing heating equipment in buildings and does not assume early retirement of equipment. Source: IEA 2019. All rights reserved. PAGE | 149 IEA. All rights reserved.PDF Image | The Future of Hydrogen 2019
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