Hydrogen and the businesses likely to benefit from it
It’s fair to say that Hydrogen has never been so hot. Let’s take a look at this fuel that promises so much and what industries are likely to take it up as a new fuel source.
What is it?
Hydrogen is a pretty awesome element. It’s available anywhere on earth as long as you have electricity and water. It can be used to generate electricity without any emissions and packs a serious punch in terms of energy; 3x petrol. But before you go out looking for that hydrogen guzzling vehicle... there’s a couple down sides.
It’s not as easy to store as petrol. You can either compress it as gas at between 5,000 - 10,000 psi, store it at -253 degrees celsius in liquid form or as a solid by either absorbing or reacting with metals or chemical compounds or storing in an alternative chemical form. Oh and it’s really explosive. There’s a reason Elon Musk calls them ‘Fool Cells’. But there is far more to this story.
How do you produce it and how much does it cost?
As we mentioned earlier all you actually need to produce hydrogen is water and electricity. The one you need to look out for is ‘Green Hydrogen’, this is where the water is split into hydrogen and oxygen as a bi-product using, you guessed it; renewable energy such as solar.
Currently however, 95% of hydrogen is produced either from natural gas (a.k.a. methane) as a feedstock using a high temperature steam process to split the methane through two processes into hydrogen with a bi-product of CO2. Or they use coal as a feedstock at really high temperatures (1,200 - 1,500 degrees C) which is mainly carbon and water to create hydrogen (H2) and carbon monoxide (CO).
On top of the huge emissions of what they call “gray hydrogen”, unfortunately it is also 3x cheaper than green hydrogen currently (€1.50 per kg). So while there’s undoubtedly work to do on the costing side, this is a common problem with most renewable energy sources at the early scaling stage.
Who’s betting on green hydrogen?
Today governments are betting on green hydrogen with some serious cash. The EU government has come out with a planned 24 to 42 billion euro investment to produce 40GW of capacity by 2030, a huge increase from an existing capacity of just 60MW today. Here in the U.K. the government is publishing their own Hydrogen strategy with an initial pencilled in £240 million Net Zero Hydrogen Fund already announced.
So where is Hydrogen used and will we start to see more of it?
Currently, hydrogen is used largely in the chemicals industry to produce actual chemicals like ammonia (NH3) rather than energy. Wondering where you’ve heard of ammonia before? 85% of ammonia produced is used as fertilisers for crops.
The good news here is that as the bulk use of oil, gas and coal as fuels declines, the cost of extracting and refining them to produce chemicals will inevitably increase – as will the cost of offsetting their emissions. So we can expect to see green hydrogen playing a larger role in the future energy mix because of this. Interestingly the fertiliser industry is under pressure from another source also. Companies like Pivot Bio and Kula Bio are utilising the wonders of biology to mass produce nitrogen fixing microbes instead of synthetic fertilisers. Watch this space!
What about steel?
Outside of the chemicals industry however, where can we expect to see hydrogen play a role in our energy system? Well you’ll be unsurprised to hear that with the energy punch hydrogen can pack its been touted as a source for some of the big heavy industries. First on the list is steel, as not just a source of energy for the blast furnaces that need to be around 800C, but also as the reductant which basically is what the oxygen from the iron ore can grab onto. The bi-product is the wonderful H2O. Currently the industry predominantly uses coal with a bi-product of you guessed it; CO2.
This zero carbon hydrogen approach is currently being trialled in Sweden by SSAB with a goal of becoming fossil free by 2045. There is however another approach that is also being developed that doesn’t use hydrogen or fossil fuels. Boston Metals uses a process called Molten Oxide Electrolysis where the oxygen is removed from the iron ore using electrons producing, well, oxygen. Whether its hydrogen or simple electricity expect huge shifts in the steel sector in the next ten years.
How about glass?
Glass is made by heating up sand to around 1320C. Today, natural gas is largely used to produce the necessary heat. Hydrogen surely must be a good fossil free replacement here. In fact there have been electric powered glass plants before, only shut down for economic reasons. Electric power is often used as a secondary power source to maintain temperatures in furnaces already. The HyNet project in the North East of England however includes a Pilkington glass factory where green hydrogen will be piloted as the primary energy source.
These projects will help scale hydrogen technology and start chipping away at the current price difference between hydrogen with Europe targeting a heat cost of $11.4 to $21.1 per MMBtu by 2020. Natural gas in Europe, by contrast, costs $4 per MMBtu currently.
While you may have spotted Hydrogen fuel-cell (HFC) cars in the UK with around 9 hydrogen stations in the U.K. they are likely to become a rarer beast. The most famous of owners is James May, but he got rid of it in March this year. That’s not fair to discard it on this basis though, as Japan has around 10,000 of them.
So what about the energy economics? Well it doesn’t look great currently. Due to the losses in energy through the electrolysis, compression, transport, storage and conversion of hydrogen you are looking at twice the energy required. So EV’s win out here hands down and with Shell, BP, EO Charging, PodPoint and more starting to pour significant resources into EV charging infrastructure, hydrogen cars certainly seem miles away from reality in the U.K. for now.
What about Aviation or Shipping?
There’s been a lot of talk about electric planes recently and it looks likely they will eventually take on short haul flights but the fundamentals of battery technology mean it just aint going to work for long haul flights. Could hydrogen play a role here? Yes and Airbus put out some rather cool looking concept planes utilising the fuel. But hydrogen will need to compete with biofuel here also.
As for shipping, again it’s looking more promising due to the range issues with electric powered ships. However Maersk recently came out discarding the fuel for its container ships due to the capacity it takes up, instead it will potentially be used as a feedstock for methanol as the fuel.
So there is definitely potential for its use across these industries.
Last but not least, the power grid.
So we’ve learnt that hydrogen can provide a punchy energy hit and be stored in large amounts and these are great attributes for an energy store for the grid. Could hydrogen take over from the role of nuclear as the price of green hydrogen starts to fall? The answer seems to be yes, in theory we can store as much of it as we wish for when the grid needs a hit on those cold days when everyone needs a cup of tea. Ain’t the intermittency renewable energy problem a pain! There are again other options, could the U.K. double down on ingenious water pump solutions, like Dinorwig Power Station in northern Wales. Engineering at its absolute finest!
Then there is sourcing energy from abroad, one of the most audacious plans is that of x-links who are looking to build a giant cable between Morrocco and the U.K. to transport solar energy. Whether governments will have the stomach for such a plan remains to be seen, but a truly interdependent global energy system has to be the way forward, given varying weather systems, providing we all can get along.
So where does that all leave us with hydrogen? Well, it's certainly going to play a key role as a feedstock for the chemicals industry who need to transition away from gray hydrogen. In terms of transport it looks likely to play a role in aviation and shipping. And it will be a useful energy store for the grid. For a number of years hydrogen has promised much but delivered little, could its day about to come? Organisations like the IEA certainly think so. And with the money that's going into it, we are certainly going to find out sooner rather than later.
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