Is hydrogen going to keep the lights on in the electricity grid of the future?

11 min readAug 23, 2022

Not on its own, but it should help.

This article doesn’t attempt to give an overview of everything hydrogen will and won’t do. If that’s what you’re after, I’d recommend Michael Liebreich’s “Separating Hype from Hydrogen”. I’m not going to talk about hydrogen cars or hydrogen trucks (Auke Hoekstra is my go to person), nor am I going to talk about hydrogen for heating.

Instead, this article considers hydrogen’s role in a future net zero electricity system.

If you haven’t read it, it’s worth starting with my article considering the technologies we need to get to a world where all of our electricity is clean. In the article I define flexibility as “technologies or behaviours that allow us to shift electricity from one time period to another, or even from one location to another”. Hydrogen is one of these flexibility technologies and is interesting for its ability to store energy for long periods of time.

What is hydrogen?

Hydrogen is an element. It’s the simplest element in the universe and each atom has one proton, one electron and nothing else.

Because hydrogen is so simple, it’s found all over the place, both across the universe (e.g. in stars) and around the world. It’s also reactive, so on Earth it’s almost never found on its own. Instead it’s found in other substances such as water (hence the H in H₂O) as well as the fabric of all living things. Fossil fuels, because they were once living things, contain lots of hydrogen alongside carbon (hence they’re referred to as ‘hydrocarbons’).

When hydrogen is found on its own, it will be as the molecule H₂. And at the temperatures you find on Earth, H₂ is a gas. Given it’s so light, hydrogen gas doesn’t tend to stick around in the atmosphere. Instead it shoots off into space meaning you won’t find more than a negligible amount of hydrogen gas on Earth.

How is hydrogen made?

Given hydrogen doesn’t show up in the wild, we need to make it ourselves if we want to use it. There are 3 key ways to do this:

Via electrolysis of water.

Electrolysis involves passing an electrical current through a liquid. When a current is passed through water, the water splits into hydrogen and oxygen, which can be captured as gases.

Hydrogen produced in this way is known as green hydrogen when the electrolysis is powered by renewables, or pink when powered by nuclear.

From natural gas.

Remember when I said that fossil fuels contain lots of hydrogen? Well this approach extracts hydrogen from fossil fuels using a process called steam methane reforming (SMR) or autothermal reforming (ATR). These processes involve heating natural gas to high temperatures with steam or CO2. This causes a reaction resulting in hydrogen and carbon dioxide or carbon monoxide.

This is known as grey hydrogen when the carbon dioxide / monoxide is emitted into the atmosphere or blue hydrogen when it is captured and stored.

From coal.

This process is similar to the natural gas process described above and involves heating coal to high temperatures and then reacting it with steam.

This is known as black or brown hydrogen, depending on the type of coal used.

There’s no need to get too caught up on the different colours of hydrogen. New ones are being created all the time — e.g. yellow for electrolysis powered by solar, turquoise for a greener version of blue hydrogen. The key is that hydrogen made via electrolysis requires only water and an electrical current, no fossil fuels.

Hydrogen as electricity storage

It’s this final point, that electrolytic hydrogen requires only water and electricity, that makes hydrogen interesting for energy storage. It means that when you have more electricity than you can use — for example because it’s windy in the North Sea — you can divert that electricity to an electrolyser and make hydrogen out of water.

As I explained in a previous article, in a future world where we’ve overbuilt renewables, we’ll have more electricity than we can use a fair amount of the time. Modelling from BEIS, the UK government department responsible for energy policy, suggests that we could see electricity prices of £0 (or close to £0) about 45% of the time by 2035 and up to 60% of the time by 2050 (and prices of £0 indicate that we’re generating more electricity than we can use, so we’re willing to give it away for free).

From the *Review of Electricity Market Arrangements* Consultation Document, 18th July 2022

This is only one of the scenarios that BEIS has modelled and it assumes zero hydrogen electrolysis on the grid. We’d therefore expect there to be fewer periods with prices at £0 if hydrogen demand increases and electrolysis becomes widespread. However, as long as there’s lots of low cost power available from renewables, it will likely be cost effective to run an electrolyser to make hydrogen.

The other important feature of hydrogen is that it burns and releases energy as heat. If you did science in secondary school, you may remember the ‘squeaky pop’ that you hear when you ignite hydrogen. When we need to convert hydrogen back to electricity — for example, once the wind has stopped blowing — we can burn it, and use the heat that is created to drive a turbine. This could be similar to how a gas power plant works today, except that carbon dioxide is not emitted when hydrogen is burned, only water. It’s even possible that existing gas plants could be converted to run on hydrogen. In The Hydrogen Revolution, Marco Alvera claims that “the turbines at the heart of gas-fired power stations need relatively little modification to run on hydrogen instead of natural gas”. In the Netherlands Mitsubishi is working to convert a gas plant to run on hydrogen.

In reality we’re more likely to use our hydrogen to generate electricity using a fuel cell, as its more efficient than burning hydrogen in a power plant. Fuel cells reverse electrolysis, reacting hydrogen with oxygen to create water, and generating electricity and heat in the process.

Given it’s possible to convert electricity into hydrogen, and then convert that hydrogen back into electricity when we need it, it becomes a question of whether using hydrogen for storage is efficient and cheap.

Efficiency

For every 100 units of electricity that we use to power an electrolyser and make hydrogen, how many units will come out the other side as electricity when we need it? In other words, what is the “round-trip efficiency” of hydrogen storage?

This depends on the technologies that are used at each step in the process:

Electrolysis
Transport
Storage
Re-electrification

Let’s start with electrolysis — the splitting of water into hydrogen and oxygen. The most established and cheapest technology is alkaline electrolysis. Alkaline electrolysers can achieve efficiencies of 60–75% for conversion of electricity into hydrogen. This means that 60–75% of the original electrical energy ends up embedded in the hydrogen that is produced, the other 25–40% is lost. Costs have come down in recent years for alkaline electrolysers as Chinese companies have invested in R&D and have begun to scale production, making alkaline electrolysis the first choice of technology for many use cases.

Proton exchange membrane (PEM) electrolysis is a newer technology that has a similar efficiency along with other benefits — PEM electrolysers work better at a smaller scale and they can be more flexible, ramping up and down in response to fluctuations in renewable energy output. Their downside is that they’re more expensive as they rely on expensive materials as catalysts, typically platinum.

Finally, solid oxide electrolysis is an even newer technology that promises efficiencies of up to 90%. Solid oxide electrolysers are at the R&D stage and are expensive but, like PEM electrolysis, they’re able to ramp up and down as needed. Solid oxide electrolysers require temperatures of at least 500 °C, meaning they will make most sense where cheap heat is available — e.g. waste heat from nuclear power generation or industrial processes.

For now let’s assume that the efficiency of electrolysis is 70%. (For an exhaustive overview of the different electrolyser technologies, their efficiencies and their costs, see this report from the Oxford Institute for Energy Studies).

Once hydrogen has been created via electrolysis it will need to be transported and stored. For now let’s assume that there are no losses in the transport and storage phases — for every unit of hydrogen that we create, there’ll be a unit of hydrogen ready to be converted back into electricity when we need it and no energy will have been lost. We’ll see later that this is optimistic.

Finally, there’s re-electrification. This is the step that involves taking the hydrogen that we’ve been storing, and converting that hydrogen back into electricity. For the sake of calculating efficiency, I’m going to assume we use a fuel cell for this step.

Fuel cells today have efficiencies of approximately 60%. There’s room for improvement here — according to the US Department of Energy, hydrogen fuel cells have a theoretical maximum efficiency of 85–90%. Whilst this is unlikely to be achievable in the real world, we’d expect to see efficiencies creep up beyond 60% in the coming years. For now, let’s stick with 60% as an assumption.

So far we’ve made the following assumptions about efficiency:

Electrolysis — 70%
Transport — 100%
Storage — 100%
Re-electrification — 60%

This gives us a total round-trip efficiency (electricity to hydrogen to electricity) of 42%. For every 100 units of electricity that we use to power an electrolyser, we’ll only get 42 units back as electricity when we need it.

If this feels low to you, it is low. Lithium ion batteries are capable of efficiencies of 80–90% and pumped hydro (i.e. where water is stored in a reservoir and released to drive turbines when power is needed) can manage 70–85% (data from Imperial College London). Even if we assume that we switch over to solid oxide electrolysis so that we can achieve efficiencies of 90%, and fuel cell efficiencies improve to 70%, we still only end up at 63% round-trip efficiency (this Twitter thread argues that these improvements are possible, maybe even likely). And this is before we consider losses associated with transport and storage, which are typically assumed to be ~10%.

But this isn’t a fair comparison. Batteries and pumped hydro typically only store energy for a few hours, maybe a couple of days. They’re unlikely to be deployed at sufficient scale to allow seasonal storage — e.g. shifting wind energy from a windy winter to a still summer — because they’re too expensive or are limited by geography / topography.

Hydrogen is useful because it could be used to store energy for weeks or even months at a time. And with enough places to store hydrogen, it could store huge volumes of energy for when it’s needed.

When we look at storing large amounts of energy over weeks or months, there aren’t any proven technologies. Which is why hydrogen might stand a chance, even with its low efficiency. Emerging storage technologies like flow batteries, cryogenic (liquid air) storage and compressed air storage might offer an alternative to hydrogen, but they’re also early in their development. (I’ve covered these storage technologies in a separate post).

Cost

Even if hydrogen isn’t the most efficient way to store energy, will it ever be cheap enough?

This is hard to say. All the candidate technologies for seasonal energy storage are early in their development and therefore expensive, too expensive to be viable for seasonal storage. But they won’t stay that way. As they’re deployed at meaningful scale, and as suppliers of capital equipment are able to scale up production, costs will fall. What will be critical is how quickly costs fall as each technology scales — also known as the “learning rate” (defined as the percentage reduction in cost for each doubling of cumulative production or capacity).

Analysis by Bloomberg puts the learning rate for electrolysis at 18–20%, depending on the specific technology. The International Renewable Energy Agency (IRENA) reached similar, although slightly lower, figures (see p.78 of this report). This means that we can assume that every time we double the total number of electrolysers manufactured, we can expect costs to fall by 15–20%. This is a similar learning rate to that of wind power over the last few decades and lower than that of solar.

Fuel cells are expected to see similar learning rates. A 2010 study put the fuel cell learning rate at 17–25% while a 2012 study looking at a particular fuel cell technology (solid oxide) estimated a learning rate of 35%.

We can therefore be confident that the cost of using hydrogen for storage will fall if the technology is scaled up. We should assume that similar cost reductions will be possible for other potential seasonal storage technologies, so it becomes a question of how much each of these technologies can scale up deployment in the short or medium term.

Here hydrogen has an advantage — hydrogen electrolysis and fuel cell technologies will be deployed whether hydrogen is used for electricity storage or not. This is because there will be use cases for hydrogen in different sectors of the economy — e.g. for fertiliser manufacture, in steel production and for heavy / off-road vehicles (see here for more use cases). A good analogy here is what has happened in lithium ion batteries over the last two decades. First personal electronics, and later electric vehicles (EVs), provided the incentives to develop batteries and the scale to drive down their costs. Now batteries are of low enough cost and high enough quality to be effective for uses that we’d never have imagined 10 or 20 years ago — grid scale electricity storage, for example. As EVs are adopted more widely and battery production scales further still, costs will fall again and we’ll find other, unexpected use cases that start to make economic sense. For hydrogen, the ‘slam dunk’ use cases (such as fertiliser and off-road vehicles) will play the role of personal electronics and EVs, providing early markets and encouraging cost reductions in hydrogen electrolysis and fuel cell technology.

As far as I know, other candidates for seasonal storage — such as liquid air storage and compressed air storage — don’t have these adjacent use cases which will help drive scale and bring about cost reductions. Therefore it’s reasonable to expect the cost of hydrogen storage to fall more rapidly than these other technologies. And a small early cost lead can compound: as the cost of hydrogen storage falls, more will be deployed; as more hydrogen storage is deployed the learning rate will be at work and costs will fall further still.

Conclusion

Hydrogen storage is not going to save the power sector. And certainly not single handedly.

But if cost reductions are realised, it will play a role. Excess renewable energy will be diverted to electrolysers and the resulting hydrogen will be stored (e.g. in underground salt caverns) for us to use when the wind stops blowing, the sun stops shining and the batteries are empty.

Hydrogen storage will need support from other flexibility technologies to get us through week-long periods where there’s no renewable generation, known as Dunkelflaute in German (roughly translated as “dull lulls”). As well as shorter duration electricity storage technologies, like batteries and pumped hydro, technologies that allow us to transport energy from one place to another will be important, including continent-wide transmission systems and subsea interconnectors.

Is hydrogen going to keep the lights on in the electricity grid of the future?

What is hydrogen?

How is hydrogen made?

Hydrogen as electricity storage

Conclusion

Further reading

Written by Kit Fitton