Ireland has committed to tackling climate change by reducing emissions to net zero by 2050. Overcoming this challenge will require a monumental shift throughout society, but solutions based on existing technologies are already available.
Renewables such as wind and solar are the primary tools we have to decarbonise our power system. However, the variability of renewables doesn't pair well with our need for on-demand energy. A complementary technology is therefore required to act as a buffer between human demand and the energy provided by nature. Green hydrogen is the leading candidate for addressing this, thereby unlocking the widespread adoption of renewables.
Traditionally, hydrogen has been produced via carbon-intensive processes. Electrolysis is a clean alternative, which produces hydrogen by splitting water into its constituent parts (hydrogen and oxygen), and is becoming increasingly affordable. When the electrolyser is powered by renewable energy sources, such as wind and solar power, a zero-carbon fuel is produced in the form of "green" hydrogen. This fuel can play a critical role in enabling the decarbonisation of Ireland's energy system as it produces zero GHG emissions.
At present, Ireland relies heavily on carbon-based fuels, making up 86% of all energy consumed in 2019. The majority of these carbon-based fuels are used for electricity production, heat and transport. Each sector presents unique decarbonisation challenges; however, all of their pathways to net zero could be greatly aided by green hydrogen.
Ireland is uniquely positioned as an island in the Atlantic on the west coast of Europe and has significant renewable resources with its large coastal regions and strong winds. Amongst its European peers, Ireland is in a privileged position of holding some of the largest potential for renewable electricity, particularly with wind generation. However, as Ireland adds more renewable electricity generation capacity, other challenges arise with the reduction of "on-demand" fossil fuel generators. This is particularly challenging when it comes to the predictability, stability and consistency of renewable sources—both wind and solar—as they play a greater role in powering our economy. For example, on a windless cloudy day, wind and solar farms produce very little electricity, and zero-carbon power generation solutions are required.
Housing in Ireland is relatively low density with a significant portion of the population living in rural locations. Much of the housing is poorly insulated and is currently heated by fossil fuels. Coal, turf and oil are used extensively for home heating which produces significant emissions. While heating homes via electricity is a good solution, the upgrading of older homes to the required level of efficiency requires expensive and inconvenient retrofitting e.g., external insulation. Due to the cost and complexity of retrofitting the legacy housing stock, a multifaceted approach will be required.
Approximately one third of Irish households are on, or near, the natural gas grid. If the gas supply was decarbonised, for example, with biogas or green hydrogen, this would quickly address significant portions of the Irish heat-related carbon emissions. Interestingly hydrogen has been used for home heating and cooking in Ireland already. Hydrogen was a significant component of town gas used in Ireland up until the 1980s.
Large scale and high-temperature industrial heating can be expensive to electrify (or, in certain cases, non-viable). At present, most high heat applications are powered by gas, including some of Ireland's largest emitters, such as steel and cement production. Decarbonising this sector while maintaining competitiveness and employment presents a significant challenge. Green hydrogen is a zero-carbon fuel that could be adopted quickly, requiring minimal changes to existing infrastructure.
Transport represents the largest category of emissions in Ireland and includes heavy vehicles (trains, buses, trucks), aviation, marine and light vehicles (passenger cars, light vans).
A light vehicle requires relatively little energy and is therefore well suited to electrification. Heavy vehicles, however, require significant energy. This high energy demand, paired with very heavy batteries and poor energy density (compared to liquid fuels), make the electrification of heavy vehicles unrealistic without major technological breakthroughs.
Molecular fuels such as hydrogen (and hydrogen derivatives such as ammonia or synthetic fuels) are well suited for these high energy-demand applications. As the cost of green hydrogen falls, it is likely to play a key role in decarbonising this sector, including Ireland's significant HGV fleet, agricultural vehicles, and marine and aviation transport – each of which plays a critical role in Ireland's economy.
Ireland's isolated island geography presents unique challenges and opportunities for the country. As Ireland shifts from an importer of fossil fuels to an independent energy producer, we become responsible for ensuring our own security, even when our new primary energy source of renewables is unavailable.
Opportunities in Ireland include:
Ireland needs to start implementing pilot projects as soon as possible to gain practical experience and capitalise on efficiencies through learning curves and scale effects on production and distribution and equipment, such as electrolysers. Developing projects today is important to ensure continuous demand growth, which justifies the implementation of the required hydrogen infrastructure to meet future greenhouse gas (GHG) reduction targets. In addition, the regulatory framework, including subsidies, taxes and levies, has a huge impact on CapEx and OpEx, which can dramatically swing the economics of projects. It is essential that the government pursues supportive hydrogen policies and creates a suitable regulatory framework that encourages the required investments.
For further information on the cost development of renewable green hydrogen, read our global insight article 'The green hydrogen economy'.
PwC's Energy and Utilities team can support you in your sustainability efforts. Contact us today.
Director, PwC Ireland (Republic of)
Tel: +353 1 792 8790
Director, PwC Ireland (Republic of)
Tel: +353 1 792 5059
Manager, PwC Ireland (Republic of)
Tel: +353 1 792 8486