Hydrogen is a hot topic these days, with many people and governments claiming that green hydrogen, derived from renewable sources, has the potential to become the future of energy storage, heating, sustainable industry and green transportation.

The dream of clean hydrogen has become so popular that multiple countries have announced plans to invest billions of dollars into the development of a hydrogen economy. Companies in the hydrogen sector have seen incredible 1000%+ stock price increases.  

It is argued that using “excess” energy generated by renewable sources to produce hydrogen, which can then be stored for when conditions are not ideal, is the perfect solution to the problems created by the variability of renewables. In addition, this hydrogen could be transported and sold to other markets and could potentially help to decarbonise activities with large carbon footprints such as steel production and long-haul transportation. 

However, others are more reticent to accept hydrogen as the silver bullet due to a significant number of fundamental issues which would need to be overcome to make this dream a reality. 

Hydrogen has been used for decades in multiple sectors, such as the production of ammonia. This hydrogen, however, is mostly produced using natural gas, coal, or oil. While clean hydrogen production may seem like the perfect solution to this issue, sceptics are of the opinion that it will never be able to compete with the low price of hydrogen made from fossil fuels. Hydrogen is difficult to generate, store, transport and handle, and currently the demand is just not there for such huge growth. 

In the face of all these conflicting claims, it seems natural to ask: is hydrogen the future of energy storage? will it be the solution to the huge growth of intermittent wind and solar production? and will it allow decarbonisation of the global energy supply?

What is hydrogen?

Hydrogen is the first chemical element in the periodic table and the most abundant chemical substance in the universe. It is the smallest element, composed of 1 proton and 1 electron. It is colourless, odourless, tasteless and is a gas at room temperature. Most of the hydrogen on earth is held within molecules of water and organic compounds (like oil and gas).

How is green hydrogen produced?

There are many ways to produce hydrogen, both sustainably and using fossil fuels. The case which most people are focussing on is hydrogen derived from the electrolysis of water. The process works as follows: firstly, a desalinator would remove the salt from the water, leaving freshwater to be electrolysed; the electrolyser would then separate the oxygen and hydrogen atoms by running electricity through the water; the hydrogen can then be collected and transported or stored for future use.

One of the main drawbacks of using electrolysis to create hydrogen is that it is not very efficient: a lot of energy is lost during the process. As much as 45% of the electrical energy can be wasted after electrolysis and another 20-30% is then lost when the hydrogen is converted back into electricity. This results in a round-trip efficiency of about 25-35%.

Potential uses for hydrogen

For many decades, the most common use for hydrogen has been for industrial processes. It plays a large role in the production of ammonia and the refining of petroleum. NASA has also used it to power rockets. Recently, new ways of using hydrogen have been discovered. Firstly, it can be used in electricity production and transport via hydrogen fuel cells. Hydrogen fuel cell vehicles, both passenger vehicles and trucks, already exist and various pilot projects are investigating their use in ships and planes. It can also be burnt as a fuel with the advantage that hydrogen burns cleanly, with no carbon emissions. There are proposals to inject it into repurposed natural gas pipelines, to be burnt for heating. This would allow the decarbonisation of both domestic and industrial heating. 

The problem of hydrogen as a panacea 

With all the above, and announcements of billions of dollars of subsidies for this industry, trying to understand the reality of all the claims around the hydrogen economy is difficult. The following podcast by Redefining Energy provides an insightful overview.

Probing more into the details, the case for the hydrogen economy starts to weaken.

Production

The reality today is that 95% of hydrogen is produced from fossil fuels by steam reforming of natural gas, partial oxidation of methane and coal gasification. In 2020 only 200MW (189 M$) of electrolysers were produced and this was driven mainly by demonstration and green hydrogen pilot projects. Even though this is forecasted to double in 2021, this capacity is microscopic compared to the global energy market.

Some companies are promoting hydrogen production from fossil fuels combined with carbon capture and storage, but it is highly debatable whether this technology can be considered “green” and it has significant challenges both with cost and the long term viability of carbon storage. Furthermore many of these proposals are coming from existing fossil fuel producers who see it as a future market for their natural gas and coal.

How is hydrogen linked to renewable energy?

Hydrogen is being proposed as a method of storing excess renewable energy to help fix the intermittency of wind and solar. Focussing on wind power, significant changes would be required in the generation infrastructure for the production of hydrogen at a wind farm or directly in a wind turbine. The electrolyser, connected to the turbines, would theoretically use any extra energy generated to produce hydrogen. There are even proposals that hydrogen can then be transported using existing offshore gas pipelines.

The primary issue associated with the production of hydrogen from renewable sources is the additional cost. Electrolysers are very expensive pieces of equipment. If producing hydrogen using excess renewable energy is the only purpose of an electrolyser, they will not be used to their full capacity and this would drive up the cost of the hydrogen. It should also be noted that renewable energy is not “free”, there is a cost to producing the power even if it is in excess of the demand. The renewable plant owners have invested in the generating equipment and whilst it is generating it is undergoing wear and tear and any excess generation impacts the financials of the project. Therefore, the concept of converting excess energy into hydrogen for free, is not capitalising on a free resource; somebody is paying for the energy generation. Finally, hydrogen production is not fundamentally linked to renewable energy, any more than any other technology which uses electricity. For the last century, the electricity grid systems have been successfully transporting electricity to consumers around the world and therefore the case for hydrogen as a method for transporting electricity is weak.  

Transport

Within long-haul transportation, while there could be some innovations in the future, it seems like electricity and biofuels are the most promising sustainable alternatives. Electric cars are already much more widespread and more energy-efficient than hydrogen vehicles, with an overall efficiency of 70-80%. As already discussed the production of hydrogen is much less efficient than this. This disparity can be seen in the market for hydrogen vehicles vs electric cars: the cumulative global sales of hydrogen fuel cell vehicles is ~20000 units compared to Tesla who alone have sold more than 3,000,000 battery-electric cars. The other issue is that globally there are only ~600 hydrogen fuelling stations whereas more than 1,000,000 public EV rapid charging stations are currently installed and this is growing exponentially every year.

How about large trucks or ships? Well, these can use biofuels which can be put in any diesel tank without modifications, reducing the waste and cost of retrofitting or building new machines and there is also a significant number of battery-electric trucks being launched each year.

Aeroplanes are more difficult to de-carbonize but much more innovation would be needed before planes can be powered by hydrogen. This is primarily because hydrogen’s low density prevents it from being compressed for storage in a safe and cost-effective manner for use in an aircraft.

Industrial Demand

Fifty per cent of the industrial business cases for green hydrogen are in steel production and oil refining. Is it logical to use green hydrogen to refine oil? The only industry that appears to have an economic case by 2030 could be the transformation of coal-based steel production to H2. This still assumes that hydrogen will achieve a cost below 2$/kg a number that is far from reality today.

Regulatory labelling of low carbon products could impact this situation and help to drive a market for “green steel” or other metals. However, introducing hydrogen into steel manufacturing will require entirely new production facilities which in turn will significantly increase the cost.

Heating

So how about hydrogen as a replacement for natural gas in household heating? There are proposals for up to 20% of hydrogen to be injected into existing natural gas supplies. At this level, existing infrastructure could be utilised. But what is the environmental case for this? Today, most H₂ is produced from gas and the cost of green hydrogen will remain above the cost of natural gas until beyond 2050. In parallel, there is a significant shift in the heating industry to the use of heat pumps which are highly efficient and directly utilise electricity to produce heat without all the losses you would incur by going through the process of creating hydrogen using electricity and then burning it.

Transport and Storage

Handling, processing and transporting hydrogen is a difficult process due to its natural physical properties. If natural gas pipelines were to be used, very significant upgrades would be needed. For example, the pipes’ ability to withstand high pressures would need to be drastically increased due to hydrogen’s low density. Hydrogen leaks are also very hard to detect as they are invisible and odourless. While they are slightly less risky than diesel or petrol leaks which can explode extremely easily, the gas is still highly combustible, presenting a potential danger. It is for these reasons that most hydrogen used today is generated on-site. Many gas operators are proposing to build national scale hydrogen pipelines but the economics would require huge levels of new demand to support this.

Large scale transport and storage of hydrogen is in its infancy. In a recent pilot, Saudi Arab CO shipped “blue hydrogen” made from natural gas to Japan, but there was no economic case for this as shipment of the original natural gas would have been significantly cheaper and energy-efficient.

The final solution being proposed to solve the transportation issue is to convert hydrogen to ammonia and then transport it by ship. Ammonia transport is already going on today and so would have no new technology requirements. But again the economics don’t stack up. The cost of importing hydrogen as ammonia and then converting it back to hydrogen is more expensive than generating it locally for most markets.

Conclusion

While the situation around the Hydrogen economy might change in the future, based on the evidence we have at the present time, it seems unlikely that hydrogen is the future of global decarbonisation. The high price of producing it sustainably, coupled with the dangers and expenses associated with transporting it, place it at a disadvantage in comparison to electrification and biofuels. Clean hydrogen still has a place in some industries which are hard to decarbonise. Nevertheless, as a fuel for cars or as heating for houses, it doesn’t seem to be the perfect or even the correct solution. 

What is puzzling in this story is that even a cursory examination of the economics or technology shows that this is far from a practical solution to decarbonisation. So why is hydrogen getting so much attention? Is this a ploy for the existing oil and gas companies to survive the energy transition? Is it being used to greenwash natural gas?

However this story plays out in the coming decades, it will be a fascinating journey and one I am excited to follow.

Acknowledgement

This article was primarily researched and written by Prity Laloux during a 1-week of work experience in March 2021. I want to say a big thank you to Prity for this fantastic work and I hope I have inspired an interest in renewable energy during her time with me.