Green Hydrogen Electrification. BOOM! – The Ecosystem is Maturing

Electrification via hydrogen has been ascendant in recent years. The hydrogen molecule has an energy dense profile where 1kg of hydrogen generates roughly three times more energy than 1 kg of gasoline. It is very flexible and can be transported and stored in gas or liquid form and has a number of applications including electricity, transportation and heat. Its safety is well understood.

While H2 has a large current industrial base for use in fertilizer production (ammonia) and plastics (methanol), it is produced using highly polluting processes resulting in significant greenhouse gases. Low carbon hydrogen (green hydrogen), which can solve the transportation CO2 emissions challenge, among others, is now possible as a result of steep cost declines and proliferating renewable energy generation sources.

Hydrogen energy, however, is a loaded topic which brings out a number of misunderstandings, assumptions and naysayers—especially in contrast to the chemical battery energy storage exuberance. H2 from power-to-gas provides a conduit for connecting the energy system together, providing fuel from excess power and significantly reducing emissions. It’s another energy storage medium which results in large efficiency gains throughout the entire energy lifecycle.

I first saw this naysayer picture when I entered the solar energy industry 20+ years ago. Existing solar technology that needed to overcome regulatory, technology, sequencing, business model and financing hurdles to reach scale created significant uncertainty and deep resistance from entrenched brown fuel providers.

The reboot of hydrogen in electrification (didn’t we try this 25 years ago?!) is similar to the challenges solar faced two decades ago, but has a number of unique differences which can lead to acceleration and wide adoption in a very short amount of time.

Energy dense hydrogen by itself is not disruptive but low carbon H2 electrification is enabled by many complementary and existing technologies and existing infrastructure which are coming together to create the “BOOM” moment where market expansion can be rapid. They include:

  • Low cost renewable energy – solar, wind, hydro, biomass etc.
  • Advanced electrolyzers that split H2 from H2O
  • Maturation of fuel cells in cost and efficiency
  • Materials advancements for storage tanks and pipelines to handle H2 with its unique molecular characteristics
  • Existing pipelines, rail lines, storage apparatus, fueling stations
  • Large, existing market demand ($110B U.S. market, 2016) from the industrial sector where the ESG investment sector is demanding cleaner operations

Clearly there is work to be done to put the end-to-end low carbon H2 energy platform in place. Electrolyzers are still maturing to lower costs, pipeline infrastructures need considerable and costly attention, and infrastructure and project financing “chicken-egg” issues exist, among other challenges. In the clean energy industry, we have dealt with these challenges before and created new models as a result of industry, regulatory and financial segment coordination.

While I have my doubts about H2 electrification in the EV segment, hydrogen has a number of highly competitive end uses including:

If you are in the renewable energy industry, H2 from power-to-gas with renewable energy as the input power is nothing but good news. It may allow for new types of business models and off-take models with lower risk where two dreaded terms – curtailment provisions and merchant power purchase can actually be quite beneficial for all parties involved.

But the renewable price needs to be below $0.02kWh cost, and it needs to be abundantly available. While price is very important, abundant supply globally is also key to making the H2 energy industry grow quickly. The green H2 energy industry is somewhat tied at the hip to the renewable energy industry where growth begets mutual growth. The renewable energy H2 production front end is about scaling and rightsizing as the H2 sector ecosystem develops.

There is still a lot to work to be done throughout the green H2 energy supply chain, but the boom is near, given the ratcheting pressure for low carbon solutions, especially in the stubborn transportation emissions sector, and the need for more off-takers to purchase ever-plentiful renewable energy. The front end of the platform graphic above is near ready, the other pieces will fall in line as the regulatory and finance worlds develop further.

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