Power-to-X: paving the way for a greener future

Power-to-X is essential in achieving a carbon neutral society that meets an increasing demand for energy. Through electrolysis and CO2 reutilisation, Power-to-X can unlock carbon neutral solutions that mitigate unavoidable emissions from industry, for instance by capturing concentrated CO2 streams from biomass-fired power plants or anaerobic digestion. It also offers a competitive option for energy storage.

New technologies are now being deployed at scale across sectors to decarbonise society, limit global warming and combat climate change. Fossil fuels are being replaced by renewable energy such as wind, solar, and hydro power. Also, direct electrification of household heating and passenger transport in cars is on the rise.

However, some sectors cannot easily be electrified. Where high amounts of energy are required, batteries will not be sufficient to store and transport energy. Heavy duty transport, shipping, and aviation all require fuel in a liquid or gaseous form, as the weight of batteries makes it unsuitable for these applications.

Although direct electrification is an important means to decarbonisation, we expect green hydrogen and e-fuels to be main solutions for sectors that are hard to electrify from 2030 and onwards. The EU, national and regional governments, and a number of private companies are increasingly developing and promoting strategies with hydrogen as a key energy carrier on the path to net zero emissions.

The term Power-to-X covers processes for converting renewably sourced electricity (power) to a substance or energy carrier (“X”). This can be in gaseous form such as hydrogen or methane (synthetic natural gas, Power-to-Gas), or it can be liquid synthetic fuels such as methanol, ammonia, synthetic diesel, or kerosene (Power-to-Liquid). Liquid fuels from Power-to-X are also often referred to as electrofuels or merely e-fuels.

One of the core technologies behind Power-to-X is electrolysis, where water is split into hydrogen (H2) and oxygen (O2). Electrolysis is a relatively mature and thoroughly tested technology that has long been used in various industrial processes. However, electrolysis used for dedicated hydrogen production has not yet been widely adopted at scale.

To scale manufacturing and deployment and drive down costs, it calls for more powerful and efficient electrolysers. Today, electrolysers are typically tested in megawatt scale and aiming for 100 MW and gigawatts before 2030. To give an indication of production volumes, a 1 MW electrolysis unit will typically produce 20 kg hydrogen per hour or approximately 220 Nm3.

Electrolysis capacity deployment is expected to grow rapidly, and the total number, scale of projects, and installed capacity are already rapidly increasing. According to the International Energy Agency (IEA), capacity development set new records for three years in a row between 2018-2020, with Europe being the dominant region with 40% of global installed capacity.

Green hydrogen, or renewable hydrogen, is currently gaining unpresented momentum and international attention. The EU Commission estimates green hydrogen to meet 24% of global energy demand by 2050.

For green hydrogen to be the key lever in accelerating the green energy transition, it will require adoption into sectors, where it is as good as absent today. Its versatility means that it can be harnessed by many industries and presents opportunities for sectors that are difficult to decarbonise with renewable electricity, such as steel, glass, plastic, agriculture, and heavy transport. The increasing interlinking of potential applications is known as sector coupling.

The paths towards carbon neutrality are many and most of them involve significant investments into and contributions from Power-to-X. In a study for the Danish Energy Agency, we have analysed the global market potential and technology readiness for Power-to-X and carbon capture utilisation and storage (CCUS). In this study, the global market potential of Power-to-X is estimated to reach 601-2,319 billion EUR by 2035.