The Economics of Hydrogen

"The Economics of #Hydrogen" by Simon Stromberg - and excellent article, one of the best I know (https://www.dhirubhai.net/feed/update/urn:li:activity:6776478929868861440/). At least for what is written. I hope that there will be a "Part 2" of it, since it seems to stop in the middle of the road.

Yes, I agree (like everybody else) that a product is always more expensive than its feedstock. A car body is more expensive than a sheet of metal, cheese is more expensive than milk - and hydrogen is more expensive than electricity. If I am happy to drink milk and the cow is available 24/7, there is no need to make cheese. If I have enough renewable electricity 24/7 and a connection to the grid, there is no need to make hydrogen. Of course. 

Here's the "but": As you said, the current hydrogen production is 70Mt/year, mostly for chemical processes. Correct. The CO2 emissions of this is approx. 700Mt - I would call that "substantial" and worth the effort to reduce it. 

What do we have to do? 1. Reduce the cost of electrolyzers by mass production and 2. Install enough renewable electricity plants. This is rather simple, but it must be done. There is no other way to make "green" fertilizers.

The second point is the transport of energy. You write "We have not calculated the costs of transport, but it feels expensive." I believe that this is where "Part 2" comes into play. Energy transport is key. I live in southern Germany, and we are far from being self-sufficient in terms of renewable electricity (and probably always will be). Places like Portugal, however, have more than enough of it, and their problem is that the sun is shining in Spain as well. So how do they export their energy e.g. to Germany? A pipeline is 8-15 times more cost efficient compared to a cable. The transport of one kilogram (33kWh) of hydrogen to Germany will cost about 30 Cents in an existing, retrofitted pipeline - that's what experts say. I would call that "nothing". 

Many places (like Germany) will never be self sufficient, no matter what they do. Currently, our energy imports account for 71% of the energy consumption. About 40% of our oil and 34% of our gas comes from Russia. I know politicians who would prefer to make business with Spain and Portugal instead of Russia. But in any case, the economics of a pipeline are much better compared to a cable.

 Bottom line:

1. Yes, if renewable electricity is available, it's always the best choice to use it directly.

2. Since fertilizers cannot be produced from lithium or so, green hydrogen will be needed anyway, and the electrolyzer market for this alone is in the double-digit Gigawatt scale (compared to almost zero today). So investing in this technology makes a lot of sense.

3. Pipelines might "feel expensive", but they are not in terms of money per kWh. Local, decentralized production of RE is always the best option, but it's not always possible. Conclusions without taking energy transport into account make no sense.

On the 25th of March, Mission Hydrogen will host the largest hydrogen workshop in the world with 15,000+ participants from 100+ countries. It will be about production, storage, and usage – and there’s one keynote about hydrogen production in the MENA region as well. Please join (it’s for free): www.hydrogen-online-workshop.com

In any case I am looking forward to Part 2 which includes some of the aspects mentioned above.