Emerging hydrogen energy getting hot

Hydrogen, or H2, has been around for a long time but is taking off only now as a potential key energy resource for the future, much in the same way that happened with solar and wind. Every week new investment plans are announced, often at a gigawatt scale. The strongly boosted interest in hydrogen as the next big thing is happening not least thanks to the EU. According to its new hydrogen strategy, clean hydrogen can become a contributor in the process of decarbonising the EU economy in a cost-effective way, in line with the ‘European Green Deal' to reach climate neutrality by 2050.

The Baltics/Asia-Business Bulletin deep-dives into the topic, also including reporting from the Singapore Week of Innovation and Technology, SWITCH, 2020 and its Deep Tech session about the ‘Emerging Hydrogen Economy’.

Hydrogen can be used as a feedstock, a fuel or an energy carrier and storage, and has many possible applications across industry, transport, power and buildings sectors. It also offers a solution to decarbonise industrial processes and economic sectors where this is challenging to achieve (other alternatives might not be feasible or be more expensive).

A list of the ways in which hydrogen can be produced is appropriate:

• ‘Clean hydrogen’ refers to renewable hydrogen.
• ‘Electricity-based hydrogen’: produced through the electrolysis of water (in an electrolyser, powered by electricity), regardless of the electricity source.
• ‘Renewable hydrogen’: produced through the electrolysis of water but with the electricity stemming from renewable sources (close to zero greenhouse gas emissions).
• ‘Fossil-based hydrogen’ (most common today): produced through a variety of processes using fossil fuels as feedstock, mainly the reforming of natural gas or the gasification of coal.
• ‘Fossil-based hydrogen with carbon capture’
• ‘Low-carbon hydrogen’: fossil-based hydrogen with carbon capture and electricity-based hydrogen, with significantly reduced full life-cycle greenhouse gas emissions
• ‘Hydrogen-derived synthetic fuels’: a variety of gaseous and liquid fuels on the basis of hydrogen and carbon. For synthetic fuels to be considered renewable, the hydrogen part of the syngas should be renewable.

The status today is that neither renewable hydrogen nor low-carbon hydrogen, notably fossil-based hydrogen with carbon capture, are cost-competitive against fossil-based hydrogen. 

The priority for the EU is to develop renewable hydrogen, produced using mainly wind and solar energy. This choice builds on European industrial strength in electrolyser production.

“Renewable hydrogen is the most compatible option with the EU’s climate neutrality and zero pollution goals in the long term and the most coherent with an integrated energy system,” states the EU.

Renewable hydrogen can be used to produce industrial products, such as green fertilisers and green steel. It can also be used in the mobility sector, especially in heavy-duty and long-distance transport applications. In addition it can help balancing supply and demand of electricity in isolated or stand-alone regions of the EU

“On the way to 2050, renewable hydrogen should progressively be deployed at large scale alongside the roll-out of new renewable power generation, as technology matures and the costs of its production technologies decrease. This process must be initiated now.”

It departs from the current low level where hydrogen accounts for less than 2% of Europe’s present energy consumption.

During the SWITCH session Professor Subodh Mhaisalkar, ED at the Energy Research Institute at Nanyant Technological University, informed that Singapore is among the countries around the world that are positioning to advance hydrogen. The country has signed an agreement with five consortium partners on the joint development of a sustainable hydrogen economy.

The global consortium the Hydrogen Council is also hopeful; envisioning that hydrogen will provide 18 per cent of the world’s total energy needs by 2050.

Prasanna Ganesh from Toyota Daihatsu Engineering and Manufacturing, and Programme Director for Toyota Mobility Foundation, expressed his strongest belief that we have now reached a particular moment where hydrogen is actually ready for commercialization and scaling up.

“It’s also because of the technology, the scale, the fact that we’ve had enthusiasm from various stakeholders. But probably most importantly the need for actually utilizing hydrogen for decarbonisation is absolutely right,” and a reason why the Hydrogen Council was started, said Prasanna who was instrumental in founding it.

 “The council really believes that the attractiveness of hydrogen is like a Swiss army knife of energy. There are many use cases for hydrogen; wether it comes to enabling large-scale renewable energy integration, or as a buffer to increase system resilience during winter/rainy season; decarbonising transport; using it as a feedstock for the industry, for feedstock of carbon capture, and also decarbonising heating.”

Prasanna also said that the fact that many major companies have joined the council in recent years gives a lot of confidence. “The EU is also making some significant progress within this particular space so we are actually very confident that the next ten years are going to be the key tipping point, especially on cost.“

Mathias Steck, MD, Renewables Advisory Germany at DNV also believed that we are now at a stage where there is a chance to enjoy the benefits of hydrogen. From DNV’s point of view the success of hydrogen will be based on these four enablers.

• Infrastructure: “There are infrastructure and safety problems if you integrate into society. And what we want to do for hydrogen is to decarbonise, mainly as a first step, the non-electric sector: transportation and heat.”
• Safety: “We do a lot of tests in buildings. How do we handle hydrogen also in a residential environment, what are the risks and how to mitigate this? And one thing we have to have in mind is we won’t be able from a cost perspective to build a completely new hydrogen infrastructure so we need to use existing systems.”
• “One important thing to understand is to get away from this discussion of only green hydrogen. We need the blue hydrogen, as a transition to build the required volume to also to get the interesting economic models. Here it is also important that we come to the right policy. Unfortunately, understandably as long as it is cheaper to emit carbon into the air that is what people will do. So we need to find the proper price on carbon so that the CCS [carbon capture and storage] build-up will happen and get attractive. That will allow us to create substantial amounts of blue hydrogen.”
• “We will also have to do something about the pricing, for example contract for differences so that people don’t have that much risk if they build facilities to push the hydrogen industry.”

Dr Patrick Hartley, Leader at CSIRO (Australia's national science agency and innovation catalyst) Hydrogen Industry Mission, highlighted that there are quite a large number of ways in which hydrogen can play a role in decarbonising our energy and industrial sectors.

“Brown and grey and Brown hydrogen based on fossil fuels is the way in which hydrogen is produced globally in large quantities right now. 75 million tons are produced using these technologies every year. So there are lots of things we can try and do with these. and that blue option pathway, where we decarbonise the fossil fuel hydrogen using capture and storage and maybe even carbon neutralization, is a major pathway, certainly in the transition,” he said.

“With the other technology pathway, the green or renewable energy pathway, there’s no carbon involved, and no emissions. That’s why it is particularly being developed on large scale to try and decarbonise the hydrogen production.”

“In the past green hydrogen was discussed a lot as this big chance, but the issue was always how to get to the stage where it becomes also an economically viable solution to produce,” said DNV’s Mathias Steck, who also mentioned a few Nordic examples of projects.

Danish firm ?rsted, along with Copenhagen Airports, A.P. Moller - Maersk, DSV Panalpina, DFDS and SAS, have joined forces to develop an industrial-scale production facility to produce sustainable fuels for road, maritime and air transport in the Copenhagen area. The partners have a vision to realise what could become one of the world's largest electrolyser and sustainable fuel production facilities, with the concrete vision to develop a new ground-breaking hydrogen and e-fuel production facility as soon as 2023. This green hydrogen project also differs compared to many others in that it is entirely focused on transport.

When fully scaled-up by 2030, the project could deliver more than 250,000 tonnes of sustainable fuel for buses, trucks, maritime vessels, and airplanes every year.

"To become competitive with fossil fuels, the production of sustainable fuels will need to be matured, built at industrial scale, and go through a cost-out journey similar to what has been seen over the past decade in other renewable energy technologies, such as offshore wind, onshore wind and solar PV. For this to happen, governments and industry must come together to create a framework that incentivises private investments in large-scale sustainable fuel production," states a press release.

In another project in Norway, the world’s first liquid hydrogen fuel cell cruise ship is planned for Norway’s fjords. A retrofitted vessel will combine a 3.2MW hydrogen fuel cell (the largest fuel cell ever placed on a major ship) from Norwegian Electrical Systems (NES) with battery storage.

“I think that is what needs to be happening: doing the pilots, learning from those and hopefully having the ability to scale it up,” said Mathias Steck.

In another example Equinor from Norway, a ‘growing force in renewables, shaping future of energy’, in December 2020 joined Europe’s so far biggest green hydrogen project, ’NortH2’. Their aim: to produce green hydrogen using renewable electricity from offshore wind off the coast of the Netherlands of about 4 gigawatts by 2030, and 10+ gigawatts by 2040.

“This is a groundbreaking project that Equinor is looking forward to contributing to. The project can be an important part in our efforts to build a competitive position in hydrogen, creating future value and industrial possibilities. Hydrogen will be key to decarbonisation and net zero efforts for the energy market, especially in otherwise hard to abate sectors which cannot be served by electricity,” said Equinor CEO, Anders Opedal.

Equinor has in 2021 also joined forces with French multinational electric utility company Engie SA to develop joint low-carbon hydrogen activities. The partners will investigate the production and market potential for hydrogen from natural gas in Europe whereby the CO2 will be captured and stored permanently offshore.

Engie and Equinor believe that it is essential to develop low-carbon and renewable hydrogen projects at scale in order to make it possible for industrial customers to significantly reduce CO2 emissions before 2030. This development will accelerate the construction of new hydrogen infrastructure and the repurposing of current natural gas infrastructure, thus paving the way for net zero in 2050.

Enapter GmBH is a start-up in the green hydrogen segment very much focused on bringing down the cost of hydrogen, also with both part of its production and a user case in Thailand. A residential complex in the north of the country generates solar energy during the day and when fully charged it produces hydrogen at night time, using hydrogen fuel cells to provide electricity.

Being one of the 46 companies active in the production and supply chain of electrolysers within the EU, Co-Founder Vaitea Cowan explained during SWITCH that Enapter designs and manufactures AEM electrolysers – a completely unique technology.

“Our mission is to bring down the cost of green hydrogen to make it cost-competitive with fossil fuels and to realize our vision of a world where fossil fuels are no longer burnt. Our goal is to bring it down to 1.5 Euro per kg in the next 2 – 5 years,” said Vaitea.

“The first challenge has been the cost of electrolysers. We accomplished a low-cost electrolyser because we don’t rely on any platinum, gold or uranium for electrolysers to be highly efficient and have a good performance. We still achieve high purity in hydrogen.”

“Our electrolysers are used for example to provide an alternative fuel for mobility sector: ships and planes are very difficult to electrify.”

She informed that AEM as new technology that has huge potential because they can still make further significant technology improvements through R&D.

Enapter represents what equals the introduction of the PC back in the 1980s – a product that is standardised, modular and scalable: “Nothing has seen more rapid cost-reduction in history than mass produced commodities. And it’s is our way at the moment with Enapter to mass produce AEM technology to drive down the cost of green hydrogen.”

Enapter has announced that it will host mass production and will provide a blueprint for such production of cost-efficient electrolysers worldwide.

Rechargenews also reported that in 2020: a staggering 50GW of green-hydrogen electrolysis projects had been announced, with more and more countries announcing ambitious clean-hydrogen strategies to help them decarbonise transport, heating and heavy industry.

Many of these projects are gigawatt-scale, with the hope that their immense size will quickly bring down the cost of green hydrogen through economies of scale – in the same way that the prices of wind and solar power have fallen exponentially over the past decade.

Alkaline-electrolyser maker Nel from Norway (the biggest producer of electrolysers worldwide!) is another dedicated hydrogen company paving the way for green hydrogen. In January Nel launched their target that should enable customers in certain markets to produce green renewable hydrogen from a large-scale Nel facility at 1.5 USD/kg from low cost renewable power, already within 2025.

“Achieving this would allow green hydrogen to start to reach fossil parity. The hydrogen market is already large, but with only a fraction served by electrolysis, there are significant opportunities to turn the existing market green,” Jon André L?kke, CEO of Nel stated.

Nel is expanding the electrolysis production – at a game-changing low cost – to accommodate large-scale projects by constructing a fully automated manufacturing facility at Her?ya, Norway.

Nel is also a provider of hydrogen fueling stations. “In addition to green hydrogen reaching fossil parity at production, we have to enable fast fuelling of hydrogen in a reliable and cost-efficient manner to be able to beat fossil alternatives,” said the CEO.

Looking ahead, analysts estimate that renewable (clean) hydrogen could meet 24% of energy world demand by 2050, with annual sales in the range of €630 billion. However, renewable and low-carbon hydrogen are not yet cost competitive compared to fossil-based hydrogen. 

EU’s view is therefore that driving hydrogen development past the tipping point needs critical mass in investment, an enabling regulatory framework, new lead markets, sustained research and innovation into breakthrough technologies and for bringing new solutions to the market, a large-scale infrastructure network that only the EU and the single market can offer, and cooperation with its third country partners.

“All actors, public and private, at European national and regional level, must work together, across the entire value chain, to build a dynamic hydrogen ecosystem in Europe.” 

Now the vision is to install at least 6 GW of renewable hydrogen electrolysers in the EU by 2024 and 40 GW of renewable hydrogen electrolysers by 2030. The recently established European Clean Hydrogen Alliance will develop an investment agenda and a pipeline of concrete projects. As part of the EU Commission’s recovery plan, funding instruments of ‘Next Generation EU’ will enhance the funding support.

While the EU is sober, yet optimistic, in its belief in hydrogen as a big game-changer other views in the media gives further food for thought.

Leigh Collins’ Rechargenews story ‘A wake-up call on green hydrogen: the amount of wind and solar needed is immense’ points out that “producing the vast quantities of green H2 that the world will need would require an absolutely massive amount of renewable energy.”

"Terawatts of renewable energy will be needed to produce green hydrogen, but that seems secondary to the demand from the rapidly growing electricity sector, which needs to decarbonise while simultaneously powering ever larger shares of the heating and transport sectors."

The bulk of the required volumes of clean hydrogen will have to be produced (at least in the short to medium term) by natural gas and CCUS — so-called blue hydrogen, says the story. And wide-scale blue hydrogen production would therefore still release millions of tonnes of emissions every year.

If governments want to increase the production of clean hydrogen, their choices are: forcing its use through mandates, similar to the requirements for biofuel blends in petrol and diesel, or through subsidies to make clean hydrogen cost-competitive with grey. “Without similar government interventions, electrolysers would struggle to reach commercialisation or see significant economies of scale.”

Another story, ‘Hydrogen Is a Trillion Dollar Bet on the Future’ states that the future for H2 is uncertain. Bloomberg writes that electrolytic hydrogen is barely more than a cottage industry. Most water-splitters are manufactured by hand, and 99% of the world’s industrial hydrogen is not green but “gray,” produced from gas or coal with the carbon emissions to match.

“If green hydrogen can achieve renewable power-style cost declines from its current pricing of around $3 to $8 a kilogram, it stands a good chance of competing with gray hydrogen, which costs as little as $1. The risk, though, is that the forecast reductions aren’t achieved. If a botched deployment or technical problems result in more modest economies of scale, the world will be left with a legacy of uneconomic hydrogen-production plants. On top of that, billions that could have been spent on other decarbonisation technologies will have been wasted.”

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