Green Hydrogen in the Energy Mix being overstated?

Clean hydrogen has emerged in the past few years as a would-be Swiss army knife of climate solutions — able to help decarbonise transport, heating and heavy industry, as well as provide long-duration energy storage that would enable summer solar power to be used in the depths of winter.

Yet clean hydrogen — whether it is green H2 produced via renewables or the blue variety derived from fossil gas or coal with carbon capture and storage (CCS) — doesn’t yet exist at any kind of scale, mainly because both options are currently much more expensive to produce than unabated grey hydrogen (see panel below).

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This has not stopped many countries — as well as the EU — from pinning their hopes on a clean hydrogen-powered future, with billions of dollars of investment currently flooding into the sector from a wide range of companies, including oil supermajors, giant utilities, refiners, industrial gas suppliers and even aircraft manufacturers.

However, some industry observers have begun to question the extent to which clean hydrogen will be needed, pointing out that it is a generally inefficient way to harness energy, and that other green solutions would always be a better option for certain sectors.

There are even those suggesting that the global push to develop clean hydrogen solutions is based on hype and deceit — a ruse by Big Oil to continue pumping fossil fuels out of the ground for decades to come, and that any non-oil players involved are merely “useful idiots” for the petrogiants (see ‘hydrogen economy’ panel below).

THE COST OF GREEN, BLUE AND GREY HYDROGEN

According to the International Energy Agency (IEA), grey hydrogen is currently available at $1-3/kg, while CCS to turn it blue would add at least $0.50/kg. Green H2 from onshore wind and solar costs $2.50-6/kg, the agency says. Analyst Bloomberg NEF expects the cost of green hydrogen to become cheaper than blue by 2030.

Of course, it is hard to make any firm cost predictions, given all the variables involved. The cost of green hydrogen will vary wildly depending on the price of the electricity used to power the electrolyser and the numbers of hours the electrolyser is in operation per year — and that’s without factoring in the cost of storage and distribution. And the cost of blue hydrogen will depend on the price of natural gas and the cost of capturing and storing the CO2.

Could this really be true? Could hydrogen — or “hopium” as its critics call it — be a modern case of the Emperor’s New Clothes, in which no-one dares speak the obvious naked truth? Could the entire hydrogen energy sector be a dot-com-like bubble that’s about to burst?

Let’s take a look at the arguments.

“We know that in theory green hydrogen could be used throughout industry, transport, power and heating. However, it won’t magically happen in sectors that don’t currently use it, just because it is green,” wrote Bloomberg NEF founder Michael Liebreich late last year in an influential two-part blogpost for Bloomberg.

“Hydrogen is going to have to win, use-case-by-use-case, but it will not be easy. Not only does it have to beat the incumbent technology, but it also has to beat every other zero-carbon option for that use-case. This is where hydrogen hype really meets reality.”

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Paul Martin, a Canadian engineer who specialises in chemical process design, noted recently: “[Hydrogen is] NOT used as a fuel or energy carrier right now, at all. And that’s for good reasons associated with economics that come right from the basic thermodynamics.”

Liebreich explained: “As a chemical feedstock, of course, hydrogen is irreplaceable. However, as an energy storage medium, it has only a 50% round-trip efficiency – far worse than batteries. As a source of work, fuel cells, turbines and engines are only 60% efficient — far worse than electric motors — and far more complex. As a source of heat, hydrogen costs four times as much as natural gas. As a way of transporting energy, hydrogen pipelines cost three times as much as power lines, and ships and trucks are even worse.”

There is a well-known diagram, created by European non-governmental organisation Transport & Environment (T&E), below, that highlights the inefficiencies of hydrogen as a road transport fuel. But it is also a useful guide to how much energy is lost when using renewable electricity to produce green hydrogen.

The differing efficiencies of batteries v hydrogen v e-fuel in passenger cars. Photo: Transport & Environment

It shows that the electrolysis process results in an immediate 22% energy loss, with transport, storage and distribution the equivalent of a further 22% energy loss (which is why 85% of the hydrogen produced in Europe today is consumed on site).

So if 100kWh of renewable energy is put into an electrolyser, only 60.8kWh of useable energy will remain at the point of sale.

By contrast, transport, storage and distribution of pure electricity results in only 5% energy losses, meaning that an initial 100kWh of energy would result in 95kWh of useable energy.

IS THE HYDROGEN ECONOMY A SCAM BY THE OIL INDUSTRY?

Hydrogen critics have accused Big Oil of talking up a future hydrogen-based economy in order to keep pumping fossil fuels out of the ground for decades to come.

The inefficiencies of hydrogen as an energy carrier make it clear that it is not the best decarbonisation option for industries such as transport and heating, they argue. Added to this is the assertion by some oil players that a hydrogen economy should be subsidised by governments today, even if that means using grey hydrogen until blue hydrogen becomes widely available, and then, at some distant date in the future, this hydrogen supply could come from renewables.

“O&G [Oil & gas] companies surely understand the major drawbacks of hydrogen for transport and other new energy system uses where it is currently not used,” wrote Alex Grant, chief executive of US-based technology evaluation consultancy Jade Cove Partners, and Canadian chemical process engineer Paul Martin.

“Based on technical and commercial realities, we believe that their messaging on hydrogen should be viewed as disinformation. The hydrogen story pushed by fossil fuel companies is a new chapter in their multi-generational “FUD” [fear, uncertainty, doubt] campaign to preserve the profitability of extracting and processing hydrocarbons, specifically methane.”

In a separate blogpost, Martin went even further: “And what about the electrolyser and fuel-cell companies, the technical gas suppliers, natural gas utilities and the renewable electricity companies that are pushing hydrogen for energy uses? They’re just the fossil fuel industry’s ‘useful idiots’ in this regard.”

So when green hydrogen is in direct competition with electricity, it has an immediate disadvantage and costs a great deal more.

And herein lies the problem. As Recharge explains in this three-part special report, pure-electric alternatives to green hydrogen already exist that could be used to decarbonise heating, transport and

THE PROS AND CONS OF BLUE HYDROGEN

There are strong arguments for and against blue hydrogen — H2 produced from natural gas with carbon capture and storage.

In its favour are two notions:

1) That it will be much easier and cheaper to produce clean hydrogen at scale using existing methane reforming technology [albeit with added CCS] than relying on renewables and electrolysis.

2) That we will need all the renewables we can get our hands on just to decarbonise the power sector — so we will need to produce hydrogen another way.

Arguments against include:

1) Blue hydrogen requires CCS, which is completely unproven at large scale, despite decades of discussions.

2) Carbon-capture technology can only capture 80-90% of emissions from the steam methane reforming technology usually used to produce unabated grey hydrogen, according to Carbon Brief. Blue H2 is therefore a low-carbon gas that will not put the world on course to reach net-zero emissions.

3) Blue hydrogen requires methane, fossil fuel and powerful greenhouse gas that often leaks during production and distribution. Canadian think-tank Pembina Institute recently published a report that estimated that, due to methane leakage and an inability to capture all the carbon dioxide, each tonne of blue hydrogen produced in Canada would result in 2.3-4.1 tonnes of CO2 equivalent.

4) Investing now in blue hydrogen would lock in methane use for decades to come.

Clean hydrogen has emerged in the past few years as a would-be Swiss army knife of climate solutions — able to help decarbonise transport, heating and heavy industry, as well as provide long-duration energy storage that would enable summer solar power to be used in the depths of winter.

Yet clean hydrogen — whether it is green H2 produced via renewables or the blue variety derived from fossil gas or coal with carbon capture and storage (CCS) — doesn’t yet exist at any kind of scale, mainly because both options are currently much more expensive to produce than unabated grey hydrogen (see panel below).

This has not stopped many countries — as well as the EU — from pinning their hopes on a clean hydrogen-powered future, with billions of dollars of investment currently flooding into the sector from a wide range of companies, including oil supermajors, giant utilities, refiners, industrial gas suppliers and even aircraft manufacturers.

However, some industry observers have begun to question the extent to which clean hydrogen will be needed, pointing out that it is a generally inefficient way to harness energy, and that other green solutions would always be a better option for certain sectors.

There are even those suggesting that the global push to develop clean hydrogen solutions is based on hype and deceit — a ruse by Big Oil to continue pumping fossil fuels out of the ground for decades to come, and that any non-oil players involved are merely “useful idiots” for the petrogiants (see ‘hydrogen economy’ panel below).

THE COST OF GREEN, BLUE AND GREY HYDROGEN

According to the International Energy Agency (IEA), grey hydrogen is currently available at $1-3/kg, while CCS to turn it blue would add at least $0.50/kg. Green H2 from onshore wind and solar costs $2.50-6/kg, the agency says. Analyst Bloomberg NEF expects the cost of green hydrogen to become cheaper than blue by 2030.

Of course, it is hard to make any firm cost predictions, given all the variables involved. The cost of green hydrogen will vary wildly depending on the price of the electricity used to power the electrolyser and the numbers of hours the electrolyser is in operation per year — and that’s without factoring in the cost of storage and distribution. And the cost of blue hydrogen will depend on the price of natural gas and the cost of capturing and storing the CO2.

Could this really be true? Could hydrogen — or “hopium” as its critics call it — be a modern case of the Emperor’s New Clothes, in which no-one dares speak the obvious naked truth? Could the entire hydrogen energy sector be a dot-com-like bubble that’s about to burst?

Let’s take a look at the arguments.

“We know that in theory green hydrogen could be used throughout industry, transport, power and heating. However, it won’t magically happen in sectors that don’t currently use it, just because it is green,” wrote Bloomberg NEF founder Michael Liebreich late last year in an influential two-part blogpost for Bloomberg.

“Hydrogen is going to have to win, use-case-by-use-case, but it will not be easy. Not only does it have to beat the incumbent technology, it also has to beat every other zero-carbon option for that use-case. This is where hydrogen hype really meets reality.”

Bill Gates-backed ‘water-splitter’ targets world’s cheapest green hydrogen

Read more

Nel to slash the cost of electrolysers by 75%, with green hydrogen at the same price as fossil H2 by 2025

Paul Martin, a Canadian engineer who specialises in chemical process design, noted recently: “[Hydrogen is] NOT used as a fuel or energy carrier right now, at all. And that’s for good reasons associated with economics that come right from the basic thermodynamics.”

Liebreich explained: “As a chemical feedstock, of course, hydrogen is irreplaceable. However, as an energy storage medium, it has only a 50% round-trip efficiency – far worse than batteries. As a source of work, fuel cells, turbines and engines are only 60% efficient — far worse than electric motors — and far more complex. As a source of heat, hydrogen costs four times as much as natural gas. As a way of transporting energy, hydrogen pipelines cost three times as much as power lines, and ships and trucks are even worse.”

There is a well-known diagram, created by European non-governmental organisation Transport & Environment (T&E), below, that highlights the inefficiencies of hydrogen as a road transport fuel. But it is also a useful guide to how much energy is lost when using renewable electricity to produce green hydrogen.

The differing efficiencies of batteries v hydrogen v e-fuel in passenger cars. Photo: Transport & Environment

It shows that the electrolysis process results in an immediate 22% energy loss, with transport, storage and distribution the equivalent of a further 22% energy loss (which is why 85% of the hydrogen produced in Europe today is consumed on site).

So if 100kWh of renewable energy is put into an electrolyser, only 60.8kWh of useable energy will remain at the point of sale.

By contrast, transport, storage and distribution of pure electricity results in only 5% energy losses, meaning that an initial 100kWh of energy would result in 95kWh of useable energy.

IS THE HYDROGEN ECONOMY A SCAM BY THE OIL INDUSTRY?

Hydrogen critics have accused Big Oil of talking up a future hydrogen-based economy in order to keep pumping fossil fuels out of the ground for decades to come.

The inefficiencies of hydrogen as an energy carrier make it clear that it is not the best decarbonisation option for industries such as transport and heating, they argue. Added to this is the assertion by some oil players that a hydrogen economy should be subsidised by governments today, even if that means using grey hydrogen until blue hydrogen becomes widely available, and then, at some distant date in the future, this hydrogen supply could come from renewables.

“O&G [Oil & gas] companies surely understand the major drawbacks of hydrogen for transport and other new energy system uses where it is currently not used,” wrote Alex Grant, chief executive of US-based technology evaluation consultancy Jade Cove Partners, and Canadian chemical process engineer Paul Martin.

“Based on technical and commercial realities, we believe that their messaging on hydrogen should be viewed as disinformation. The hydrogen story pushed by fossil fuel companies is a new chapter in their multi-generational “FUD” [fear, uncertainty, doubt] campaign to preserve the profitability of extracting and processing hydrocarbons, specifically methane.”

In a separate blogpost, Martin went even further: “And what about the electrolyser and fuel-cell companies, the technical gas suppliers, natural-gas utilities and the renewable electricity companies that are pushing hydrogen for energy uses? They’re just the fossil fuel industry’s ‘useful idiots’ in this regard.”

So when green hydrogen is in direct competition with electricity, it has an immediate disadvantage, and costs a great deal more.

And herein lies the problem. As Recharge explains in this three-part special report, pure-electric alternatives to green hydrogen already exist that could be used to decarbonise heating, transport and heavy industry. So why not save a fortune and an awful lot of hassle by using the electricity directly, rather than converting it into gas?

Source: Recharge.

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