Green Hydrogen Is Comingby lawrence m. fisher
larry fisher, a former New York Times reporter, writes about business, technology and design.
Published September 25, 2020
Hydrogen, used as an energy source instead of fossil fuels, is having a moment. Again.
Hydrogen last had a day in the sun some two decades ago, when President George W. Bush trumpeted its promise in his State of the Union address. But it has been going in and out of style for over a century. Even before climate change became a proximate threat, hydrogen held out the promise of a nearly perfect fuel, ubiquitous and clean. But — and there was always a big but — hydrogen is generally produced by processes that spew carbon into the atmosphere.
The current buzz is about “green” hydrogen — that is, hydrogen produced by separating the H2 from the O in water using a process called electrolysis. This is straightforward technology known to most high school chem students: dip negative and positive electrodes connected to an electricity source in a tub of water (preferably not one you are soaking in), and the current running through the water will generate hydrogen and oxygen at the two poles, respectively.
From our perspective, though, there’s a big catch: the process is only green if the electricity comes from renewable sources. Happily, in some regions, renewable energy is now so abundant that green hydrogen is approaching commercial feasibility. Moreover, the economics of hydrogen as an alternative to conventional fuels are bolstered in countries with carbon emission taxes and other regulations aimed at slowing climate change.
There’s yet another factor also working in hydrogen’s favor: thanks to wind power, which can sometimes be purchased near the source for as little as half a cent per kilowatt-hour, a report from Morgan Stanley forecasts the cost of making green hydrogen could fall by two-thirds by 2030. The Morgan Stanley report, incidentally, coincided with a European Commission announcement that hydrogen will be key to meeting the EU’s ambitious 2050 goal of climate neutrality.
Thus far, Norway, Denmark, South Korea, Japan, Australia and Canada have all embraced green hydrogen to varying degrees. A quick Google search turns up recent scientific papers — or at least press releases — on green hydrogen from Russia, India and Iran, among other countries that are loathe to miss the hydrogen-powered bus. And while the U.S. as a whole barely merits a mention in terms of green hydrogen development, California’s tough emissions standards are likely to make the state a global leader in hydrogen fuel demand.
“Why is it happening in Denmark, Germany, Netherlands and France?” asks Ben Gallagher, an analyst with Wood McKenzie, an energy consulting firm. “You have real regulatory pressure to decarbonize in those markets as opposed to the U.S. and a much more sophisticated understanding of the challenges of deep decarbonization.”
What Color Is Your Hydrogen?
Hydrogen is the lightest element on the periodic table, as well as the most common one in the universe. But hydrogen on earth is nearly all bound with oxygen (in water) or with carbon in hydrocarbons like fossil fuels. Separating and capturing the hydrogen is an energy-intensive process, and the markets for industrial hydrogen — chiefly for petroleum refining and as a component of ammonia (NH3) for fertilizer — are cost-sensitive.
Nearly three-fourths of the annual global hydrogen production of around 70 million tons is produced by exposing methane gas to superheated steam in the presence of a nickel catalyst. Coal gasification — heating coal in the presence of oxygen and steam — yields most of the rest. And these are both messy, messy processes, producing global emissions of around 830 million tons of CO2 annually, equivalent to the carbon emissions of Indonesia and the UK combined.
Hydrogen produced from coal is so-called brown hydrogen, and yes, the industry needs a less sensitive word to denote a dirty fuel. Steam methane reformation produces “gray” hydrogen. Adding a carbon-capture stage to steam reformation produces “blue” hydrogen — but given the added costs of this last step and the need to store or sell the carbon, its market share is (and is likely to remain) tiny.
Tinier still is green hydrogen’s share of the hydrogen market, at barely 1 percent. But it is growing rapidly thanks to the collapsing cost of wind, solar and hydro, and by one estimate could meet in theory an astonishing 24 percent of the world’s energy needs by 2050. More plausibly, the International Renewable Energy Agency expects hydrogen to meet a still amazing 8 percent of global energy consumption by the same year. Your mileage may vary.
Meeting anything like 24 percent of energy demand with hydrogen would require massive amounts of additional renewable electricity generation. “You have two major things happening with renewables,” says Gallagher with Wood Mackenzie. First, the price of renewable energy has fallen by about 85 percent. Second, there is a massive oversupply of power on sunny days in the major solar-producing regions, sometimes literally driving wholesale electricity prices below zero. Hence the market yearns for a way to store power to minimize the price swings.
Green hydrogen’s share of the hydrogen market is growing rapidly thanks to the collapsing cost of wind, solar and hydro, and by one estimate could meet in theory an astonishing 24 percent of the world’s energy needs by 2050.
Symbiosis or Co-dependency?
In theory this excess electricity can be stored in batteries, and some utilities are trying just that. But lithium-ion batteries, the most efficient sort now available in quantity, are expensive. And as some killjoys have pointed out, not so virtuous, due to the environmental devastation wrought by lithium mining in South America and child slavery associated with cobalt in Africa. Some utilities employ pump storage, pumping water uphill to reservoirs during periods of high wind or sun and recapturing the energy as hydropower when it’s dark or windless. But the local environmental impact of these systems is also not negligible.
In contrast, storing hydrogen in tanks is relatively inexpensive and environmentally benign, and in some areas the gas can even be stored deep underground in natural rock formations. Meanwhile, locating electrolytic hydrogen production near renewable generation facilities could simplify transmission logistics.
Already, energy companies, utilities and hydrogen technology providers are collaborating on massive offshore wind facilities with onsite hydrogen production. In August, Shell and the Dutch renewable energy company Eneco announced a plan to create a wind-powered green hydrogen hub in the port of Rotterdam. “The key to cost savings could be hydrogen production facilities built jointly with wind/solar farms, so producers could generate power without incurring grid fees, taxes and levies,” explains Carolina Dores of Morgan Stanley.=
The Shell-Eneco plan is to construct wind farms in the North Sea with a capacity of 3-4 gigawatts by 2030, possibly growing to 10 gigawatts around 2040. Not to be outdone, the German energy ministry agreed to fund the first offshore wind-power-to-green-hydrogen conversion project; it’s called Westküste 100 and will incorporate a modest 30-megawatt electrolyzer.
When Second Best May Be Best
Although green hydrogen is the ideal, there are incremental approaches that could supply large amounts of hydrogen soon, without building massive wind and solar capacity. Hydrogen can be produced from diverse feed stocks that are environmentally manageable—wood scraps, plastic garbage, even sewage — and all are being explored.
Canada has a large amount of biomass, chiefly waste wood and paper pulp, and it is also a major producer of hydroelectricity. Put the two together and you get H2V Energies, a Montreal-based startup that began taking orders in January. The company uses a gasification and plasma refining system that has long been employed to turn waste materials into synthetic gases.
“Up to this point, making hydrogen from natural gas has not been green,” said Norman Goyette, H2V’s president and chief executive. “Making it through electrolysis requires humungous amounts of renewable electricity at a competitive price, provided in a sustainable way. In contrast, biomass can be found in large volumes pretty much anywhere in the world.”
The plasma process is not inherently green because it normally releases CO2 as a byproduct, but the company is using carbon capture and storage to mitigate the effect. And as Goyette notes, “the biomass, if left untouched would emit greenhouse gases, and this process does not add to that. It is carbon neutral.” H2V’s hydrogen is not yet price competitive with gray hydrogen produced from methane. But Goyotte notes that Canada’s emissions-reduction goals in many industries guarantee a market.
It’s not just wood products that can be used as feedstocks. UK-based PowerHouse Energy Group is turningunrecyclable plastic, end-of-life tires and other waste materials into syngas (a synthetic similar to natural gas) through small-scale gasification from which electrical power and hydrogen can be produced. And in Southern California, drivers of the early fuel-cell-powered electric cars from Toyota, Honda and Hyundai can fill up at a station attached to a sewage treatment plant in Orange County that produces enough hydrogen to fuel 50 vehicles a day.
The Writing on the Wall
In the Norwegian TV series “Occupied” (available on Netflix) the country is taken over by Russia after its Green Party prime minister announces the end of oil and gas production in favor of cleaner, safer nuclear reactors powered by thorium. It’s a good thriller. But in real life, Norway is quietly embracing an economy in which fossil fuels give way to renewable electricity and green hydrogen, not post-modern nukes.
Other petro states have taken note. Saudi Arabia has launched a $5 billion green hydrogen plant, which it is calling the world’s largest. Meanwhile, a recent report by three professors at the Moscow School of Management urges Russia to stop ignoring this opportunity and embrace hydrogen as “an image of the future for the global economy.”
Greenstat is a Bergen-based startup that aims to play a role in green hydrogen, wind and solar comparable to that of Statoil, the giant oil and gas company that is two-thirds owned by the government of Norway. It has partnered with Nel Hydrogen, an Oslo-based company that manufactures electrolyzers employing two competing technologies.
“I’ve never been against oil and gas,” says Virgard Frihamer, a former Statoil executive who is Greenstat’s GEO (green executive officer). “But I want to be one of the people to bring Norway from the fossil era to greener possibilities. We will own and operate hydrogen production plants, and if needed, we will also look into owning and operating fueling stations.
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Arguably, the most important takeaway from news of progress in transforming hydrogen into a potent tool for containing climate change is how rapidly technology can change the game. We are far, far behind in the race to save the planet from environmental catastrophe, and to date there is little evidence that policymakers are prepared to ask for serious sacrifices from the public to get back on track. The slow, hard process of recovery from the pandemic is only apt to lengthen the odds against a public awakening anytime soon.
The bright spot in this generally gloomy variation on the story of the tragedy of the commons is how innovation is now working in our favor. A grand irony here is that technological change since the industrial revolution — everything from the electric generator to the internal combustion engine — led us deeper into this predicament. Let’s hope the technological fix arrives in time to bail us out.