Connecting Green Hydrogen MENA 2023

Excellent panel discussion on Hydrogen. The panel was posed with the question as to how to raise project finance to help scale up the implementation of hydrogen projects. In order to do that, and at the same time see how hydrogen can help in the March to Net Zero by 2050, the panel thought it wise to refresh some basic fundamentals of the chemistry of hydrogen.?

With that in mind:

1) Hydrogen is the lightest element in the periodic table. It has only one electron. This poses a huge challenge as it diffuses into metals and makes them brittle. Thus storage and transportation of hydrogen becomes difficult.?

2) Whilst the energy density of Hydrogen is good - at 120 MJ/KG- almost three times that of diesel or gasoline; it’s specific volumetric energy density is very low - about 2.5 times lower than that of LNG and gasoline, hence, larger volumes are need to get the same impact and other fuels. This adds significantly to cost making it uneconomical today

3) Hydrogen needs to be stored in cryogenic tanks at minus 253 degrees centigrade. Normal insulation will not work, hence, parasitic heat transfer mechanisms need to be deployed to keep it liquefied. This results in pressure being built up in the tank and, therefore, special pressure valves are needed to vent hydrogen. As a result boil off rates can vary from .1 to 5 percent per day - in a month one third of hydrogen can be lost to atmosphere. Oops!

4) As stated earlier, since hydrogen evaporates very fast, it is not only a loss from a cost point of view, it also reacts with hydroxy radicals in the atmosphere needed to neutralise methane. If these hydroxy radicals are neutralised, which will happen as hydrogen evaporates; methane which is more harmful than carbon dioxide does not get neutralised. Thus, our plan to use hydrogen to fight global warming gets challenged.

5)?Hydrogen possesses the NFPA 704’s highest rating of 4 on the flammability scale because it is flammable when mixed even in small amounts with ordinary air; ignition can occur at a volumetric ratio of hydrogen to air as low as 4 percent. This makes it challenging for use in domestic heating. Besides the safety issue, it is also very inefficient as with a coefficient of performance of three, one gets thrice the amount of heat with the same amount of renewable electricity used with heat pumps than with hydrogen.

If we sum up the carbon dioxide that is emitted while mining the metals needed for solar panels and wind turbines, and that needed to produce electrolysers for hydrogen, the net saving of carbon dioxide gets diluted. This is further aggravated by the impact on hydroxy radicals when stored hydrogen evaporates into the atmosphere. This impairs the impact that renewables and hydrogen have to some extent on the fight against global warming.?

Hence, an enabler is needed if we have to meet our March to Net Zero targets as hydrogen alone will not get us there. This enabler is nuclear power which is good for grid stability, is safe and well understood by the insurance industry thereby enabling financing. Small medium nuclear reactors (SMR) also have great potential.

Coming back to the chemistry periodic table, if hydrogen as the lightest element is getting so much attention, why not also focus on Uranium (that is used for nuclear power), which, with 92 electrons and protons, has the heaviest atomic weight out of all natural metals.

It is only fair that we treat the lightest and the heaviest elements on the periodic table equally!?

Not only is growing both nuclear power and hydrogen wise policy to combat global warming; it also gives time for elements of the hydrogen chain that need to become economically viable as science needs time to find a solution to the current chemistry challenges.

Once this is clear, the hydrogen ecosystem should be grown in three pillars…

The first pillar is green ammonia and the use of hydrogen in situ for industrial applications (obviating the need for it to be transported). Green Ammonia can be transported to its end use for use in fertilisers etc, and financing this element of the hydrogen eco system is bankable, as the tried and tested model of LNG financing can be replicated.?

The second pillar is blue hydrogen. As carbon capture and storage costs decrease, this will become economically viable and will also buttress the March to Net Zero. With adequate insurance products available, this element of the eco system can also be project financed.

The third pillar, which is a number of years down the road, is the transportation of hydrogen, which is a challenge. This will take time to be economical as science has to fight the chemistry factors that work against hydrogen!

It is, thus, important that in the short run we focus on pillar one to raise project financing as projects can be made bankable. Once we have more economic drivers for the other two pillars, we should then focus on them for effective risk mitigation to enable project financing. Structuring and trying to effectively mitigate risk across all pillars of the hydrogen chain today to enable financing will result in incorrect risk allocation, and derail the financeability of the projects. It is, hence, paramount that the hydrogen ecosystem and nuclear power are both developed parallelly.