Is Hydrogen Energy Our Future ?

John Williams

07 May 2022

What is Hydrogen Energy

Hydrogen is an invisible gas and an alternative to natural gas (methane).

There are three main types of Hydrogen; Grey, Blue, & Geen. These colour codes are used within the energy industry to differentiate between production processes.

Grey Hydrogen

Grey hydrogen is created from natural gas using steam methane reformation but without capturing the associated carbon emission. The majority of global hydrogen production is grey hydrogen.

Blue Hydrogen

Black, brown, and grey hydrogen use steam to separate hydrogen from carbon in fossil fuels including coal, lignite, and methane. It is turned into blue hydrogen by capturing and storing carbon emissions at the source.

Green Hydrogen

Green hydrogen is produced from the electrolysis of water molecules using renewable energy. It has low carbon emissions.

Overview

As the world shifts to deliver net-zero goals, new technologies are emerging to meet the demand.

It is recognised that hydrogen can play a key role when it comes to delivering goals of the energy industrial and transportation sectors that aren’t feasible for electricity.

Three factors will facilitate the development of this hydrogen economy:

  • falling cost of renewable electricity,
  • technology developments,
  • net-zero 2050 targets.

Recent media coverage and analyst forecast may give the impression that green H2 is widely available at an affordable price. But the 100 million tonnes of hydrogen produced yearly, mainly comes from natural gas and coal and is responsible for large CO2 emissions. Less than 1% comes from the electrolysis process.

While there are hundreds of gigawatts of green hydrogen projects in the global pipeline, only small number of pilot-scale facilities have reached financial close. The reason is that green hydrogen is more expensive to produce than the grey hydrogen made from fossil fuels.

Fuel for transport, heating, or heavy industry are also more expensive than existing alternatives, such as electric vehicles and heat pumps.

Global Market Forecast

Hydrogen electrolysis is currently a niche technology; however, the technology is forecast for rapid growth. The announced projects to be commissioned in the forthcoming decade could grow the global electrolysis capacity from 100 MW to 30 GW by 2030.

The European Union set an installation target of 6 GW of renewable hydrogen electrolysers by 2024 and 40 GW by 2030.

In parallel, countries such as UK (10 GW), France (6.5GW), Germany (5GW), Holland (3-4GW), and Portugal (2GW) are setting their own electrolyser deployment targets and hydrogen funds to support the expansion of the market.

Hitting Targets

Rapid activity is required to take hydrogen from 1% of the present energy system to the target of 23% by 2050.

Accordingly, countries are laying out 2050 roadmaps that include:

  • electrolyser-deployment targets,
  • hydrogen quotas,
  • supportive policy mechanisms.

Challenges

High Costs

The present challenge of deploying green hydrogen at scale is the high cost of extraction. It’s also bulky, making it difficult and expensive to transport from the production side to the demand side.

Infrastructure

Today’s hydrogen infrastructure accounts for 4% of final energy use and its slow development is holding back widespread adoption.

Heating

The de-carbonisation of heating is a major challenge, and there is an emerging consensus that a wider hydrogen economy that relies on natural gas could be damaging to the climate.

Permit Delays

As seen in Germany and offshore North America, environmental permits and local administration authorisations can sometimes create significant delays. Local authorities may be temporarily overwhelmed by the acceleration in requests to:

  • develop renewables,
  • install electrolysers & hydrogen turbines,
  • upgrade gas pipelines.

Solutions

Low-carbon hydrogens share of the global energy market is less than 1%. But the momentum behind net zero ambitions means that some investors are starting to bet on its long-term potential. Consequentially, the project pipeline is gathering pace.

Green hydrogen cost reductions in major markets could be a gamechanger, creating a US$600 billion investable opportunity.

The IEA finds that the cost of producing hydrogen from renewable electricity could fall 30% by 2030 as a result of declining costs of renewables and the scaling up of hydrogen production.

Roadmaps

To achieve cost reductions and deliver a hydrogen economy, requires roadmaps and targets that bridge the gap between fossil-based production and future green hydrogen production.

Coordinated Hydrogen Projects

It’s essential that Governments and industrial stakeholders to further align and develop a portfolio of viable, bankable projects that align and exceed ambition and coordinate its activity.

Development of Infrastructure

To develop and deploy large-scale hydrogen infrastructure, Governments will need to provide financial support.

It will also be beneficial to revise regulatory environments to address current permitting issues and support coupling between different sectors. For example, renewable energy sources and electrolysers.

Valleys & Clusters

Advantages could be obtained if Stakeholders focus on the co-location of production and end users to ramp up capacity and technology commercialisation, creating “Hydrogen Valleys” or “Hydrogen Clusters.”

Creating Markets

Market design is essential for the growth of a hydrogen economy.

Policy measures such as quotas for low-carbon hydrogen in industry sectors are essential for increased large-scale adoption. Along with a comprehensive portfolio of cross-supply chain projects supported by national public funding.

Transport Sector Potential

Escalating implementation of hydrogen end-use applications will require collaborative efforts across multiple sectors including production, storage, transportation, and distribution.

Hydrogen Technology

There are some hydrogen vehicles on the market, but a number of technical barriers hinder the development of heavy-duty hydrogen vehicles.

Along with cost, these barriers will need to be overcome to reduce the green premium of these vehicle options.

Refuelling and Distribution

Refuelling hydrogen vehicles is a circular problem; in particular the geographic spread of stations is poor.

Likewise, a low number of hydrogen vehicles leads to low levels of station use, disincentivising further investment.

Governments need to address this challenge and learn from case studies in Germany, where station deployment has been more prevalent. Regulators need to develop these protocols to ensure station and vehicle designs can be further developed for market.

Powering trucks and buses to carry passengers and goods along popular routes can make fuel-cell vehicles more competitive.

Car and Light van segment

In terms of passenger vehicles, it’s hard to view fuel cells as being a significant opportunity. Toyota, an early advocate of fuel cells, has shifted its ambitions for the technology away from cars.

Tom Baxter, Senior Lecturer in Chemical Engineering, University of Aberdeen, argues that the fuel is inherently inefficient for transport applications since the energy must move “from wire to gas to wire” in order to power a vehicle. This leads to a round-trip efficiency of only 38% (charging electric cars gives 80% efficiency).

At the same time a group of car makers including Toyota, Daimler, and BMW are investing US$10 billion over the next 10 years to develop hydrogen technology and infrastructure.

In Japan there are around 100 public hydrogen refuelling stations allowing you to fill up in the same time frame as a traditional fuel car. Germany has 80 hydrogen stations and third is North America with 42 stations.

In 2017, the UK Government announced a £23 million fund to “accelerate the take up of hydrogen vehicles and roll out more cutting-edge infrastructure”: There are currently only 15 hydrogen stations in the UK.

Another benefit of hydrogen is that it can be produced on site rather than being transported like hydrocarbon fuels, or supplied through the grid like electricity.

In 2011, Swindon opened the UK’s first fully renewable hydrogen station , in a Honda dealership. The station produces hydrogen using solar power, with no reliance on the electricity grid.

DHL the international delivery company has a fleet of 100 ‘H2 panel vans’, able to travel 500kms before refuelling.

Vauxhall has introduced the 249-mile-range Vivaro-e Hydrogen van to the UK, and Renault is promising fuel cell vans for sale in 2023.

Heavy Vehicle Segment

Short-haul and rail transportation are pliant to electrification but long-haul and heavy loads need high quantities of energy. Therefore, energy carriers are required with much higher energy densities than batteries provide.

Liquid hydrocarbon fuels provide this need but cause air pollution and GHG impacts.

Hydrogen fuel cells range and refuelling advantages mean they have heavy duty applications potential.

The benefits of hydrogen over electric heavy vehicles are:

  • less time is taken to re-fuel than to re-charge batteries,
  • higher energy efficiency,
  • hydrogen has a longer range than battery-powered trucks.

Manufacturers are rising to the challenge of de-carbonising road freight. Hyundai has sent the first 10 fuel cell electric trucks to Switzerland out of the 1,600 it plans to sell by 2025. The Chinese firm Hyzon has also started production.

Wrightbus makes hydrogen buses for customers including Transport for London. While Toyota is about to start making fuel cells at its Belgian R&D centre to supply bus manufacturers.

Trains

World-wide, the only two active hydrogen trains are in Germany. The Hydroflex project aims to bring the Germany technology to the UK. In 2020 the project secured a £400,000 grant from the Department for Transport to help it develop the detailed final production design and testing. The challenge is to design trains with space for enough hydrogen to provide a day of service.

Small Ships

Last year the launch was completed and trials began on 70-foot, 75-passenger Sea Change, the first hydrogen fuel cell vessel built and operated in the U.S.

The hydrogen fuel cell-powered, electric-drive ferry will operate on California’s San Francisco Bay. The ferry will demonstrate the viability of its zero-carbon propulsion technology.

A Norwegian consortium is developing a national hydrogen infrastructure to support the de-carbonisation of the maritime transport sector.

The Hornblower Group launched a project to design and construct what could become the first floating green hydrogen fuelling station for the maritime industry.

The goal of the project is to demonstrate the use of zero-carbon hydroelectric energy in the electrolysis of water, producing green hydrogen for ferry and maritime vessels. Hornblower expects the fuelling will be available beginning in 2024.

Large Ships

The distance between refuelling opportunities in maritime long-haul transportation makes today’s batteries impractical.

The need to move large ships while transporting the relevant fuel on board, means the fuel must have a high energy content but a small physical volume and low mass. The challenge with hydrogen is that it takes up more on-board space, reducing space available for cargo.

Despite these difficulties, some companies are progressing with the development of hydrogen-powered shipping.

Kawasaki Heavy Industries has launched Suiso Frontier the world’s first liquefied hydrogen carrier. The 8,000 tonnes ship was developed to transport liquid hydrogen at -253oC in large quantities over long distances.

C-Job Naval Architects have designed a brand-new class of liquid hydrogen tanker intended to revolutionise the renewable energy market.

The tanker concept, developed in partnership with LH2 Europe, is claimed to be a critical element in realising a green end-to-end liquid hydrogen supply chain.

To realise their goal, LH2 Europe will source the abundant amount of renewable electricity in Scotland to produce green hydrogen and market it at a competitive price with diesel. The new tanker will then transport the liquid hydrogen from Scotland to Germany.

The tanker will have enough capacity onboard to deliver fuel for 400,000 medium-sized hydrogen cars or 20,000 heavy trucks. As it is currently planned, the tanker will deliver 100 tons of hydrogen per day, and gradually increase the delivery to 300 tons per day, depending on demand.

Heating Potential

The de-carbonisation of heating is a major challenge, and another area where hydrogen is proposed as a potential solution. Blending it with methane in the natural gas grid, is straightforward and there are already projects exploring this option.

Photo credit: SGN

New green project set to heat Fife homes The Levenmouth hydrogen heating network is in progress as a green alternative to natural gas. Gas distribution company SGN is working with Fife Council to bring to Levenmouth - the world’s first 100% hydrogen-t o-homes heating network.

In the first phase, the network will heat around 300 local homes using clean gas produced by a dedicated electrolysis plant, powered by a nearby offshore wind turbine. ahead of the hydrogen gas network going live in 2023.

Industry Potential

Recent technical breakthroughs and the changing nature of zero-carbon electricity production offer new approaches to green hydrogen, including thermochemical, electrochemical, and geologic generation technologies.

Hydrogen also offers energy storage capabilities, which can help variable renewable energy sources such as wind and solar capture a larger share of the electricity market.

Ammonia

Ammonia has received policy support due to its versatility. Currently the largest consumer of hydrogen, it can be used as a hydrogen carrier and a shipping fuel. It can also be co-fired in coal plants to decarbonise the power sector.

Energy security and net zero commitments will drive demand in many sectors such as power, steel, shipping and aviation. Wood Mackenzie forecast that ammonia is set to account for 48% of demand by 2025, and as such the most promising industrial consumer of hydrogen.

Steel

Annually, steel production accounts for 7% of global carbon emissions and puts large amounts of carbon dioxide into the atmosphere. But green hydrogen-based production provides an opportunity to make steel production emissions-free.

Green hydrogen steel production is expected to be a cost-competitive and a sustainable alternative within a decade.

H2 Green Steel’s production site in Boden, northern Sweden, will hold one of the world’s largest electrolysis plants for green hydrogen production to date.

The giga-scale electrolysis, powered by fossil-free electricity, producing the green hydrogen needed to bring 5 million tonnes of high-quality steel to the market by 2030.

Ports

Much of the refining and chemical production that uses hydrogen based on fossil fuels is concentrated in coastal industrial zones, such as the North Sea, the Gulf Coast, and south eastern China.

If these industrial ports became the nerve centres for scaling-up the use of clean hydrogen it would drive down overall costs.

These hydrogen hubs could also fuel ships and trucks serving the ports, and power other nearby industrial facilities i.e., steel plants.

One model under consideration is the use of multiple industrial clusters, integrated with domestic use and transport. National Grid, Drax, Equinor, and other companies are collaborating on a zero-carbon cluster in Humberside. They are exploring the potential development of a large-scale hydrogen demonstrator scheme and the creation of a hydrogen economy across Yorkshire and the North of England. This includes a large-scale CCS network and a hydrogen production facility.

Gas Grid

Building on millions of kilometres of existing natural gas pipeline infrastructure would significantly boost demand and drive down costs.

With relatively modest investment, gas power plants could convert to burn hydrogen. These hydrogen turbine power plants could be used as “peaking facilities” to provide backup power in periods of high demand and low production from renewables.

Conclusion

The world is at a decarbonisation crossroads. Most countries have announced net-zero targets that will dramatically alter demand for resources. As each country makes a wholesale shift, they need to develop a succession plan.

Given the right market and policy environment, green hydrogen can participate in these plans. In particular it shows potential to help reach the “last mile” of decarbonisation.

It is foreseeable that it could provide high volumes of renewable energy for transportation and industry sectors, that have challenges decarbonizing via direct electrification.

It could also help to store renewable electricity for later use.

To enable a clean hydrogen economy scale-up will require a united and long-term ambition of accelerating significant investment in the development and commercialization of low carbon hydrogen applications.

Accordingly, Initial efforts should be focused on large scale opportunities that are able to generate rapidly large-scale economies, have minimal infrastructural needs, and are the best performing solution in sectors.

A starting point would be large industry (refineries, chemicals facilities, methanol production) and heavy-duty transport (large fleets of hydrogen buses, trucks, trains on non-electrified lines, and maritime, etc.)

We have identified five actions that can be taken to facilitate growth:

1. Governments and policy makers establish long-term energy strategies to scale-up hydrogen in a co‑ordinated way i.e., subsidies investments by suppliers, distributors and users, in the short to medium term, with economies of scale eventually leading to falling costs.

2. Turn existing industrial ports into hubs for lower‑cost, lower-carbon hydrogen.

3. Use existing gas infrastructure to spur new clean hydrogen supplies.

4. Scale-up support transport fleets, freight and corridors to drive cost reductions and make fuel-cell vehicles more competitive.

5. Establish the first shipping routes to kick-start the international hydrogen trade.

Building on these mutually supportive opportunities can help to scale-up infrastructure development, enhance investor confidence, and lower costs.

So, in conclusion, it can be said that; yes, Green Hydrogen initiatives will have a key role in our future. They will bring more constituents together than any other potential low-carbon technology and result in genuine solutions.

Just not with as many touch points as some experts reckon.