Translated from Spanish to English - www.onlinedoctranslator.
com
HYDROGEN AS A VECTOR
FOR AN ENERGY SYSTEM
JUAN JOSÉ ALBA RÍOS
JULIÁN BARQUÍN GIL
MONICA DÍAZ-OTERO NUÑEZ
CÉSAR MARTÍNEZ VILLAR
EDUARDO MOREDA DÍAZ
ENDESA
Spain, like the rest of the EU Member States, has committed to a process of decarbonizing
its economy that must lead to a neutral system in greenhouse gas emissions by 2050. This
process, whose spearhead has been the decarbonization of electricity generation, it requires
very large investments, but also offers enormous opportunities. It is not an exaggeration to
say that nature
of the Spanish economy in the middle of the century
and beyond will be determined by the way in which
this process develops.
The backbone of this energy transition is the
replacement of fossil fuels (coal, oil and natural gas)
with renewable energy sources. This substitution is
easier in electricity generation, since most renewable
energy sources are actually renewable electricity
sources. In particular, wind electricity and
photovoltaics, which have benefited from a
spectacular reduction in costs in recent decades,
which is expected to continue in the coming years.
Although there is still a long way to go, it can be said
that the decarbonization process of the electricity
sector is already on a firm trajectory that, in general,
has broad political and social support.
Therefore, it is necessary to address the decarbonization
of other sectors, responsible for most of the
emissions, where so far progress has
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RENEWABLE
This work is based on the doctoral thesis of the
author Ebru Susur and includes part of the results
obtained from the articles published by the authors,
which was funded by the EMJD program«European
Doctorate in Industrial Management (EDIM)»
funded by the European Commission, Erasmus
Mundus Action 1.
been much more modest. In particular, transport and
industry must replace oil and natural gas with
renewable energy. The main lever of this process will
be the electrification of both sectors, but there are
niches where it will not be technically possible or
economically viable. In these cases, the presence of
an additional energy vector is necessary: hydrogen.
Hydrogen is therefore a way of conveying renewable
energy, mainly electrical as argued below, for these
activities that are difficult or impossible to electrify.
But it also solves a problem posed by a renewable
electrical system: that of seasonal management of
variable wind and photovoltaic generation.
The rest of the article is structured as follows. The
following section discusses how hydrogen can
contribute to solving the problem of seasonal
balance of renewable electricity generation. Next, it is
about how
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 JJ ALBA RÍOS / J. BARQUÍN GIL / M. DÍAZ-OTERO NUÑEZ / C. MARTÍNEZ VILLAR / E. MOREDA DÍAZ

FIGURE 1
ELECTRICAL GENERATION SCENARIO (2050)

2,500,000

2,000,000
daily excess

1,500,000

1,000,000

intraday energy movement

500,000
Daily deficit

Production matching demand

0
January February March April May June July August September October November December

Source: self made

that it is possible to move from a transportation
system based on oil to a renewable one, and the role
of hydrogen in this transformation. A parallel
transformation, the substitution of natural gas, is
discussed next. We then move on to study the role of
hydrogen as a raw material and its role in the
decarbonization of the economy. In a later section we
discuss the implications that all these parallel
transformations have and the foreseeable structure
of the hydrogen system that makes them possible.
This, in turn, has certain regulatory consequences
that are discussed below. Finally it is concluded.
Batteries are a very efficient form of storage for the
daily cycle, but not for this seasonal cycle. The reason
is twofold. On the one hand, the energy that must be
stored from, for example, day to night (the daily
excess or deficit) is much less than that which must
be stored from one season to another (the seasonal
excess or deficit), which is the sum of the excesses or
deficits of several days. Therefore, the storage
capacity required for daily storage is substantially
less than that required for seasonal storage. On the
other hand, daily storage spreads its (basically fixed)
cost over 365 cycles over a year. The cost per kWh
stored is, therefore, moderate. This contrasts with
the seasonal case,

RENEWABLE ELECTRICAL GENERATION, BALANCE

where there is only one cycle per year.
SEASONAL AND DISPOSAL
To solve this seasonal imbalance, a mass storage
Both wind and photovoltaic generation present a
system would be necessary whose cost, per kWh
very high temporal variability. In the case of
stored, is much lower than that of batteries. This is, at
photovoltaics, which is the generation technology
least for now, beyond the reach of current
that is growing most markedly, we have a daily cycle
technology.
on which a summer/winter seasonal cycle is
superimposed. Wind energy is more unpredictable, But if we do not look at the electrical system in
but several days of high wind can give way to many isolation, but rather consider the entire energy
days of very little wind, and in general it is usually system together, the situation is different. In any
higher in March and surrounding months, as case, in a well-designed electrical system, it is
reflected in the popular proverb. inevitable that a certain amount of spillage will
appear. Logically, the magnitude of these discharges
Electrical storage batteries have benefited from a
will decrease with the magnitude of the storage
spectacular cost reduction, comparable only to what
system, as shown in figure 2, which shows the results
has taken place in the photovoltaic sector. They will
of an Endesa analysis focused on a possible 100%
be extremely useful for managing daily cycles and
renewable electricity system in 2050. And it is also
providing firm energy, but they will not be able to
logical that, from the narrow point of view that only
manage seasonal cycles.
contemplates the electrical system, there is a certain
amount of discharges that is economically optimal.
Figure 1 illustrates the reason for this. The results are
from a scenario of electricity demand and generation in
But limiting ourselves to this narrow analysis would be a
the year 2050. There is an excess of generation in spring
serious mistake. The reason is that the objective is not
(maximum wind) and summer (maximum photovoltaic)
the decarbonization of the electricity sector but rather
that, in principle, could cover the deficit in autumn and
the decarbonization of the economy. Discharges are, in
winter. To do this, it is necessary to store the energy
this sense, a valuable resource since they can be
produced throughout the year.
converted into renewable hydrogen that transports

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 HYDROGEN AS A VECTOR FOR A RENEWABLE ENERGY SYSTEM
FIGURE 2
RELATIONSHIP BETWEEN SEASONAL STORAGE AND DISCHARGE
Source: self made
you and industry are going to need you. Therefore,
the design criterion of the electrical system will not
simply be to cover the electrical demand in the strict
sense, which in any case will be greater than the
current one due to the electrification of the economy.
The criterion will be to cover electricity demand and
hydrogen demand, inextricably linked.
This integrated electricity-hydrogen system requires
three basic elements:
1. Electrolyzers that use excess renewable electricity
to extract hydrogen from water. Today the most
mature technology is alkaline electrolyzers,
although there is a great development effort in
the field of proton exchange membrane (PEM)
electrolyzers and research and development of
other technologies. In any case, we are
witnessing a process of cost reduction and
increased efficiency, from the current 80% to
85% or 90%. These electrolyzers can preferably
be installed near the places of consumption, to
minimize transportation needs. It is cheaper and
more efficient to transport electricity to the
electrolyzers than to transport hydrogen to
consumers.
2. Underground storage. For example, in salt caverns
or other geological formations. Although there
seem to be no major limitations in having the
necessary capacity, which is substantial, it is
necessary to keep in mind that current natural
gas storage is not always appropriate for
hydrogen.
3. To maintain the necessary level of security of supply of
the electrical system, it will be necessary to
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river to have firm generation free of emissions. It
is possible that hydrogen-based electricity
generation systems will contribute to covering
this need. Fuel cells are a technology in which we
are also seeing significant cost reductions and
that present efficiencies greater than 50%. They
can be small (in fact, there is the possibility of
installing them in cars) although they do not
always have to be. If large facilities are required,
hydrogen combined cycles (similar to current
natural gas combined cycles) can have
comparable efficiencies and probably be
cheaper. But it must be taken into account that
the process of producing hydrogen with
electricity and then producing electricity again
with it is very inefficient, so the use of this
possibility should be kept to the minimum
possible.
THE END OF THE OIL ERA AND THE FUTURE OF
TRANSPORT
Today, oil and its derivatives account for just over half
of the energy consumed in Spain, with transportation
being its main use. This is due to the very low
efficiency of gasoline or diesel thermal engines, of
the order of 25% to which must be added the losses
in refining and the energy cost of fuel transportation
(Deloitte, 2017). This is one of the main reasons that
is driving the electrification of transportation, since
an electric car, even including electrical losses in
transportation and distribution, has an efficiency that
normally exceeds 80%, about 4 times higher.
Electricity consumption that, increasingly, is of
renewable origin. To this we must add
the absence of on-site emissions, the ease of maintenance
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 JJ ALBA RÍOS / J. BARQUÍN GIL / M. DÍAZ-OTERO NUÑEZ / C. MARTÍNEZ VILLAR / E. MOREDA DÍAZ
maintenance and the very long useful life of electric
vehicles, which are increasingly cheaper due to the
spectacular decrease in the cost of batteries.
Therefore, it can be expected that wherever possible,
transport will be basically electric in nature. This will
be the majority situation in land transport, where
cars, trucks and electric railways will be the most
used means. We must keep in mind that we are
witnessing not only a change in the fuel used in
transportation, but also in its very nature. This
change is driven by electrification, and includes the
widespread extension of light means of transport
(e.g. skates), vehicle rental or leasing, or
intermodality. In sum, the nature of personal
transportation is in a state of flux. Electrification is
not only compatible with this process, but also
facilitates the change that society demands.
However, there are niches where electrification will
not be feasible. These niches are likely to include
some heavy ground transportation, shipping
(especially offshore) and aviation. In these cases, fuel
will continue to be needed. Hydrogen, whether
compressed or liquefied, is a promising alternative
for land transportation. In the case of maritime
transport it is also feasible, although hydrogen
derivatives such as ammonia are also promising
(Gallucci, 2021). Efficiency losses in the production of
ammonia from hydrogen would be offset by greater
ease of storage. Additionally, there are synergies with
the chemical industry's need for ammonia, which is
discussed below.
Finally, aviation is the sector that presents the
greatest challenges. Weight is a fundamental
restriction here, which can work against hydrogen,
which requires heavy containers if it is pressurized or
complex technology if liquefied. That said, there are
aircraft projects that produce electricity on board
using efficient fuel cells that power electric motors
(Ansell and Haran, 2020). Another alternative is the
transformation of hydrogen into synthetic fuels
(Transport and Environment, 2021). If these fuels
contain carbon, it is necessary to find a source that
does not imply additional carbon dioxide emissions.
One way could be biomass, with hydrogen treatment
being a way to increase its calorific value and, in
general, improve its properties. Another alternative,
currently the subject of research, would be to obtain
it directly from the atmosphere. The process is,
however, energy intensive.
SUBSTITUTING NATURAL GAS
Natural gas is today an energy source of
fundamental importance in the Spanish economy.
156
ñola. Its main use is heat production. It is necessary
to distinguish here between low temperature and
high temperature heat. Although there is no
universally accepted definition, domestic systems
that do not exceed the boiling point of water belong
to the first category, while industrial systems
intended to heat to hundreds of degrees belong to
the second.
Most low-temperature heat goes to heating homes
and businesses. In this segment, heat pumps are
much more efficient, 3 or 4 times more, than burning
fuel, be it natural gas or hydrogen (IDAE, 2014). The
traditional disadvantage of these devices was the
difficulty of operating in low temperature
environments. However, there has been a very
substantial improvement in technology in recent
years. This explains, for example, why the
Scandinavian heat pump market is one of the largest
in Europe (Johansson, 2021). The climatic conditions
in Spain are, a priori, much more favorable.
Therefore, it is not expected that hydrogen will be the
main energy source in this segment, with some very
specific exceptions.
The discussion for the high temperature sector is
more complex. These are, for the most part, very
varied industrial processes. In some cases there are
alternatives, many of them electric (Madedduet al.,
2020), while in others hydrogen appears to be the
most viable option. The research and development of
these alternatives is a highly relevant issue, which will
determine how electricity and hydrogen are
distributed in the industry's energy supply, currently
dominated by natural gas.
HYDROGEN AS A RAW MATERIAL
In addition to their importance as energy sources,
fossil fuels also have a relevant role as raw materials
in various industrial processes. In many of these
cases hydrogen can also play this role.
Steel is produced in blast furnaces through processes
that require iron ore and coking coal. Coke plays a
double role: as an energy source and as a chemical
reducing agent. Hydrogen can also play both roles
(Vogl V., Åhman M. and Nilsson LJ, 2018). There are
already demonstration plants whose mission is to
explore this technology, with a view to its possible
large-scale development.
The chemical industry is today the main consumer of
hydrogen. Most of it is obtained from the reforming
of natural gas, a process that is intensive
in carbon dioxide emissions. Its replacement with
renewable hydrogen makes it possible to avoid these
emissions (Ghavamet al., 2021). The importance of these
chemical processes cannot be underestimated. Inclu-
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 HYDROGEN AS A VECTOR FOR A RENEWABLE ENERGY SYSTEM
yen, for example, the synthesis of ammonia
necessary, among other things, for the manufacture
of nitrogen fertilizers. Let us keep in mind that today
food is produced for a world population about six
times larger than that existing a century ago, without
an even remotely comparable increase in the land
devoted to agriculture. These needs will grow in the
future, as richer societies demand greater meat
consumption that requires a high increase in certain
crops (1). To this we must add the manufacture of
plastics and other products.
IMPLICATIONS
Hydrogen turns out to be a fundamental element in a
series of functions: balance of the electrical system,
maritime and air transport, source of energy and raw
material in industry. There are evident synergies
between these sectors that point towards a still
diffuse image of the future hydrogen system.
A first comment is that it is likely that this hydrogen is
fundamentally renewable and of electrolytic origin.
Firstly, because it is a necessity for the balance of the
electrical system. Secondly, because it is foreseeable
that it will be cheaper than fossil alternatives, given
the expected decrease in the cost of renewable
electricity generation. In addition, hydrogen from
fossil sources requires carbon dioxide capture and
storage technologies. These technologies have been
discussed for decades in the context of coal, without
having taken off technologically or gaining social
acceptability. Finally, this path implies a strong
energy dependence on the outside, which could not
be prudent as the current behavior of the gas system
reminds us.
In a system dominated by hydrogen of electrolytic
origin it is expected that the required transport
system will be substantially smaller than the current
natural gas transport system. First, because the total
amount of energy to be transported will be smaller.
The amount of gas, hydrogen or of another nature,
necessary for the air conditioning of homes and
businesses, will be much smaller than today, if not
unnecessary. The gas required by the industry will
also be significantly less, due to the electrification of
numerous processes.
Secondly, a significant part of this hydrogen will be
domestically produced. Therefore, production will be
closer to consumption, and the transportation
infrastructure required will be smaller (Agora
Energiewende, 2021). Exactly what part of
consumption will be national and what part imported
is to be determined. It is certainly technically possible
to produce hydrogen in North Africa and transport it
to Spain and Europe. If this is desirable
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or prudent is another question. In short, it is very
possible that we will never see such a thing as a pan-
European hydrogen transport network, the situation
being therefore very different to that of natural gas.
The possible hydrogen distribution network has an
even more dubious future, if possible. The expected
future consumption of hydrogen is relatively
concentrated (ports, airports and industrial centers)
and, therefore, does not require large distribution
infrastructures. The most dispersed users, and in
particular domestic consumers, will have their energy
consumption almost completely electrified, making
anything analogous to electricity unnecessary.
current natural gas distribution network.
These points have clear regulatory consequences.
But before moving on to consider them, some
thoughts on the role of biomass or biofuels may be in
order. In principle, biomass can be the source of
renewable fuels, from biodiesel to biomethane. But
the quantity available is limited, and it is therefore
necessary to decide what use it is going to be given.
IDAE (IDAE, 2011) estimates the biogas production
potential in Spain at 20.6 TWh. Being a significant
amount, it is much lower than the current
consumption of natural gas. Naturally, it is always
possible to speculate on massive imports from other
countries. However, in a scenario of increasing
demands on the global agricultural sector and very
possibly increasing ecological restrictions on it (e.g.
maintenance of biodiversity or greater restrictions on
the biogeochemical cycle of nitrogen) these imports
could be expensive or inexpensive. prudent In short,
it seems that the most promising strategy is to
dedicate biomass to those sectors that are most
difficult to treat, such as aviation.
REGULATORY POLICY
Renewable hydrogen will be a fundamental element
of the future energy system. The cost and
characteristics of the necessary technologies
(electrolysers, fuel cells, etc.) are improving rapidly,
but still require substantial development. In many
ways, the situation is similar to that of renewable
technologies a few decades ago.
This suggests the need for public support for these
technologies. Said support, however, should not be
the same as that given then to renewable energies,
given the very different technical characteristics. It
must also be linked to renewable hydrogen in
general and electrolytic hydrogen from green
electricity in particular, without wasting scarce
resources in other ways.
It is natural that initially this support is linked to the
substitution of fossil hydrogen, which is already consumed
in appreciable quantities by the industry. Naturally, it will be
necessary to analyze whether the best option is
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 JJ ALBA RÍOS / J. BARQUÍN GIL / M. DÍAZ-OTERO NUÑEZ / C. MARTÍNEZ VILLAR / E. MOREDA DÍAZ
electrolysis in the proximity of the industry, or if it is
more economical to locate them in the proximity of
renewable plants and transport the hydrogen
produced. But this is possibly secondary to the need
to create a market for electrolyzers.
The strategy that does not seem to make much sense
is to proceed with the mixture (blending) with natural
gas in the transportation system (Bardet al., 2022).
First, this is not the most appropriate path to develop
the necessary hydrogen technologies, since at the
present time it involves the injection of very marginal
quantities of hydrogen into a system that is still
basically natural gas. The practice of gas transporters
in giving the mixture as a percentage of volume
instead of as a percentage of energy (more relevant
in the context of energy policy) inflates the degree of
injection (2).
Worse still, blending carries the risk of lock-in on
obsolete gas technology. The bottleneck of replacing
natural gas with hydrogen is not in the
transportation and distribution infrastructure (which
in any case presents serious problems) but rather in
the final applications. These today allow very
different hydrogen mixing levels. If they are in the
same distribution network there will be a level of
mixing where it will be necessary to simultaneously
change all end-use appliances from models that burn
natural gas with some hydrogen to those that burn
pure hydrogen or perhaps hydrogen with some gas.
natural. The affected part of the distribution network
will have a different gas than the rest of the network,
which will likely require separation systems, which
involve a significant additional investment and have
their own restrictions and operational problems. In
short, there is no such thing as a gradual switch from
hydrogen to natural gas: the switch is possible but
complex, expensive and inefficient. This is a
completely different situation from the historic switch
from city gas to natural gas (H21 Leeds City Gate,
2016). On the other hand, a gradual change from
natural gas to electricity is perfectly feasible, with the
only requirement possibly being the gradual
reinforcement of the electrical distribution network.
In general terms, it is necessary to begin to see the
natural gas network as an essentially sunken asset,
where only some facilities will be reusable for the
transport and distribution of hydrogen. This requires
that investment in new regulated assets be very
prudent and consider useful lives lower than
technical useful lives.
It is necessary to ensure that resources are directed
towards renewable hydrogen. Systems of guarantees
of origin have been proposed as a possible way.
However, these systems should be substantially
different from the current ones. The current system
of guarantees of origin is based on guarantees issued
one year late, and that for
158
Therefore, they do not reflect the nature of the
electricity actually consumed by the electrolyzer. They
must be carefully designed to avoid the risk of double
counting, both for the renewable electricity and at
the same time for the hydrogen it produces. And
finally, there is a risk of becoming a purely financial
product, incapable of efficiently financing agents with
technological capacity who have to invest in physical
renewable hydrogen installations.
Subsidies for electrolysis capacity (€/MW) could be an
appropriate instrument. The dynamics of the market
itself, which encourages the use of electricity in
periods of low prices when electricity has a majority
renewable component, will naturally tend to ensure
the criteria of additionality and temporal simultaneity
that appear in European regulation.
CONCLUSIONS
Hydrogen is thus a vector of capital importance in the
energy transition towards a decarbonized system. It
will be closely integrated with the electrical system
and with various industrial activities both as a source
of energy and raw material.
What cannot be expected is that its role will be very
similar to that currently played by natural gas.
Natural gas is one of the main fossil fuels imported
into Europe, being mainly used as a source of heat
and electricity. Quite the contrary, hydrogen will be a
product of electricity and will have an important but
not dominant role in the heat sector, predictably very
small in the low-temperature heat sector. This in turn
implies a hydrogen transportation network with a
very different architecture from that of natural gas
now.
This does not imply that the current natural gas
sector has no relevance in the future hydrogen
sector. Quite the contrary, the experience
accumulated in the operation of industrial gases and
the technical personnel that currently operate the
gas sector are assets of critical importance. But it
does imply that a majority of the current natural gas
transportation and distribution infrastructures are
sunken assets. In this sense, and like any sunken
asset, the amount of the investment made is actually
irrelevant when planning the future system,
regardless of how the commitments that may have
been acquired with the regulated companies involved
are met.
In this sense, it does not seem reasonable to promote
regulations that are a carbon copy of the current natural
gas regulations. Quite the contrary, we must think about
proactive regulation, more oriented towards the
development and encouragement of the use of new
infrastructure and incentives than towards recovery.
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 HYDROGEN AS A VECTOR FOR A RENEWABLE ENERGY SYSTEM
of the costs already incurred. The tension between
regulations aimed at encouraging optimal
investment and use with regulations aimed at cost
recovery is a classic regulatory problem. In a
transition situation like the current one, the
maximization of social benefit requires particularly
intense attention to the first problem, while not
forgetting that we are in a general framework that
must also promote, among other things, renewable
electrification.
GRADES
[1] Cows are a fairly inefficient way to transform soybeans
into steaks.
[2] For example, 5% in volume (number mentioned in
regulatory proposals) is less than 2% in energy.
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