Why Hydrogen Is the Hottest Thing in Green Energy

A valve on pipework at the new hydrogen test facility, operated by National Grid Plc and Northern Gas Networks Ltd. in U.K. (Photographer: Anthony Devlin/Bloomberg)

Why Hydrogen Is the Hottest Thing in Green Energy

Solar panels and wind turbines can’t clean up everything. Making steel, for instance, calls for higher temperatures than traditional electric furnaces can deliver. That’s why plans for blunting climate change now envision a big role for hydrogen in curbing industrial emissions and for powering cars, trucks and ships. So-called green hydrogen is essentially emissions free. But meeting the ambitious plans being made for it means building a giant industry almost from scratch.

1. What’s hydrogen’s advantage?

For one thing, it burns — hot and clean. Replacing the fossil fuels now used in furnaces that reach 1,500 degrees Celsius (2,732 degrees Fahrenheit) with hydrogen gas could make a big dent in the 20% of global carbon dioxide emissions that now come from industry. In steelmaking, hydrogen could replace the coal that’s now used not only for heat but to purify iron ore. The byproduct is water vapor rather than CO2. And while batteries currently dominate the field of electric vehicles, some companies are betting that hydrogen-powered fuel cells will be a better choice than batteries for heavy vehicles, such as trucks, ships and potentially even airplanes.

2. What is green hydrogen?

Hydrogen can be made by electrolysis, a process that sends an electric current through water in a device known as an electrolyzer to split hydrogen atoms from oxygen. (In fuel cells, the process is reversed: Hydrogen is mixed with oxygen to produce water and electricity.) To count as green hydrogen, the electricity used to run the electrolyzer must come from renewable sources.

3. How else is hydrogen made?

Nowadays, most of the hydrogen used as fuel is derived by splitting it off from molecules of natural gas. But that requires a good deal of energy and also produces carbon dioxide, leading some to call this gray hydrogen, in contrast to green. Blue hydrogen is the name used if the carbon dioxide produced is captured and stored; it’s counted as a low emissions fuel

4. What hurdles does green hydrogen face?

A bunch. Green hydrogen currently costs between $2.50 and $4.50 a kilogram to make, according to an analysis by BloombergNEF. That would need to fall below $1 a kilogram to become competitive with hydrogen made from fossil fuel. BNEF projects it will reach that level by 2030. But that hinges not only on a vast expansion of electrolyzer capacity, but on a vast increase in electricity generation — at a time when the world’s generators and grids already will be straining to keep up with demand from newly electrified vehicles. Also, as the lightest gas in the universe, hydrogen must be compressed or mixed with natural gas to send through a pipeline or chilled to a liquid state to be transported by ship, adding to its costs compared with natural gas.

5. Who’s leading on green hydrogen?

The European Union has set the most ambitious goal: building electrolyzers that are capable of converting 40 gigawatts of renewable electricity into hydrogen by 2030. It’s made hydrogen a central component of its Green Deal plan, envisaging as much as 470 billion euros ($560 billion) of public and private investments by 2050 in the hope of kickstarting a global hydrogen market. Germany has declared that green hydrogen will play a central role in transforming the country’s industrial base as it moves to zero emissions by 2045.

6. What’s happening elsewhere?

China plans to have 1 million vehicles powered by hydrogen fuel cells on its roads by the end of 2030. The value of its hydrogen production could reach 1 trillion yuan ($155 billion) by 2025, according to the China Hydrogen Alliance. Australia will invest $214 million to speed development of four hydrogen hubs with 26 gigawatts of capacity. Japan, where Toyota Motor Corp. has invested heavily in fuel cell technology, is the world leader in hydrogen refueling stations, while South Korea is building fueling and other infrastructure in six cities where it hopes to make hydrogen the main energy source by 2025.

7. How about the U.S.?

The U.S. had 6,500 fuel cell electric cars on the road in 2019 — the world’s largest fleet. President Joe Biden’s administration has set a goal of reducing the cost of renewable hydrogen by 80% by 2030. Industry groups, including some fossil-fuel companies, are pushing for tax credits for hydrogen production and for subsidies for converting natural gas pipelines to transport hydrogen.

8. What are businesses doing?

Most of the world’s energy companies and big industrial groups are involved in hydrogen somehow. Royal Dutch Shell Plc is leading a consortium developing a project to produce up to 10 gigawatts of green hydrogen by 2040. Germany’s RWE AG, together with 26 other companies, plans to set up electrolysis units in the North Sea with 10 gigawatts of capacity by 2035. European’s Airbus SE is working on designs for hydrogen-powered aircraft.

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