Hydrogen: A Clean Energy Source of the Future?
Jules Verne thought in 1874: “water is the coal of the future.” Is it really?
You know things are getting exciting when German bureaucrats are turning emotional, as happened one month ago in Berlin: “Hydrogen is the shit! And we need it desperately.” Thomas Herdan, the bureaucrat in question, is a prominent policymaker in the German Economic Ministry and, until that moment, was known for analytical thoughtfulness rather than for enthusiastic outcries.
His excitement, however, is shared by governments and businesses around the world. The International Energy Agency IEA estimates that every year, the world’s governments pour $700 million into R&D for hydrogen applications alone. A few months ago, the U.S. announced $40 million in funding for 29 hydrogen projects across the country. As IEA puts it, hydrogen currently has “unprecedented political and business momentum”.
Clean and Flexible
To understand why so many policymakers are suddenly this excited, it is important to know a few things about hydrogen: It is an odorless and invisible gas, easily combustible, and we have found reliable ways to turn it into either electricity (in a fuel cell) or heat (by burning it). The only additional output is water. Most importantly, it can be produced by using just electricity and water, which is great news when sea levels are rising and the world needs to wean itself off fossil fuels.
Hydrogen is thus seen be to be well-suited to solve a whole array of energy and climate problems: It could be used to refuel cars and trucks in mere seconds (instead of waiting for EV batteries to charge), while large ships and planes could run on high-energy synthetic fuel made from hydrogen. Hydrogen usually comes in the form of gas and could be added into existing natural gas pipelines, lowering its carbon intensity (a share of 15% of hydrogen in the mix is deemed safe).
Hydrogen is regarded to be the best option for decarbonizing high-heat industries like steel or cement production, where electricity is simply not an option as it cannot generate high enough heat quickly enough.
Last but not least, hydrogen offers clean energy alternative in production of chemicals. Many industries across the globe and in the U.S. already use hydrogen in fertilizer production. Most commonly, fertilizer is produced using coal and gas-powered electricity, and replacing these fossil fuels would require around 1450 TWh a year of renewable energy, or roughly 40% of Europe’s total current consumption.
Finally, hydrogen could be used as energy storage, turning excess electricity from wind and sun into gas and then back again using fuel cells. If mastered at large scale, this could be a breakthrough step toward solving the intermittency problem and complement battery storage.
Not a Silver Bullet
Before we get too carried away, let’s ask: why hasn’t hydrogen “taken off” already?
While hydrogen is technically easy to produce, the technology still isn’t cheap and needs to be set up on a large scale to be economically viable. Hydrogen is also very expensive to store and transport. A small garage-size tank would only be able to hold 66 pounds of the gas under high pressure. To use it on a large scale for heating, transport, or industrial production would require significant infrastructure investments. In addition, cities might raise objections to new and vast hydrogen storage facilities in near proximity to residential or commercial areas due to safety concerns.
Meanwhile, fuel cells face another problem: turning electricity into hydrogen and then hydrogen back into electricity causes massive efficiency losses. In battery-powered cars, more than half of the original electricity is turned into acceleration. In hydrogen cars, it is less than a third.
Lastly, despite its justified reputation of exploding easily, its energy content is lower than that of fossil fuels.
This sheds some light on which direction hydrogen is probably going to take: already today, the price of private hydrogen vehicles can’t compete with battery-equipped cars, due to their higher efficiency and lower cost. While for cargo ships and cars, batteries don’t seem to be a viable alternative to petroleum, the technology to produce synthetic hydrogen fuel isn’t ready yet and will probably have to compete with cheaper biofuels.
What to Expect in the Near Future: Research and First Movers
In the upcoming years, governments and innovators will continue to work on improving the economics of production, storage and transportation of hydrogen, as well as on developing ships and jets running on hydrogen-based fuel. This makes it possible that the efficiency of fuel cells will improve.
In order to capitalize on technology improvements on a global scale, the hydrogen industry will need to push governments to agree on an international framework for hydrogen safety standards, which is still missing.
In the meantime, expect large-scale investments in hydrogen production to help drive costs down, like a large project in the Netherlands recently announced by Shell and Gasunie. The reliable Dutch infrastructure for natural gas is a great asset for deploying hydrogen quickly in the country where heating and cooking stoves are running mainly on the fossil fuel.
Elsewhere, utilities and hydrogen off-takers must work together to create economically sound projects. Here in the U.S., one steel plant is leading the way: Nucor Steel is constructing a steel mill which will run solely on hydrogen, produced with wind electricity from the storms of Missouri.
Who knows? Maybe the enthusiastic German bureaucrat and Jules Verne are onto something big here.
