So, What Exactly Is Green Hydrogen Anyway?

Companies and industry groups often gang together to promote
theirproducts. Far more unusual was the step taken last month by
10 major European energy companies and two of the continent’s top
renewable industry bodies, which joined up to launch a campaign
touting a product that none of them actually sell.

That product is renewable or ‘green’ hydrogen. And while
it’s not a central concern today for those companies (Enel, EDP,
BayWa and others) or industry groups (SolarPower Europe and
WindEurope), all see green hydrogen playing a vital role in
achieving deep decarbonization of the energy system.

Europe is planning to make hydrogen a centerpiece of its
trillion-dollar
Green Deal package
. Interest in
green hydrogen is rocketing
 from major oil and gas firms.

“We cannot electrify everything,†said WindEurope CEO Giles
Dickson. “Some industrial processes and heavy transport will have
to run on gas. And renewable hydrogen is the best gas. It is
completely clean. It will be affordable with renewables being so
cheap now.â€

What is green hydrogen? (An intro to the hydrogen color palette)

For a colorless gas, hydrogen gets referred to in very colorful
terms.

According to the nomenclature used by market researcher Wood
Mackenzie
, most of the gas that is already widely used as an
industrial chemical is either brown, if it’s made through the
gasification of coal or lignite; or grey, if it is made through
steam methane reformation, which typically uses natural gas as the
feedstock. Neither of these processes is exactly carbon
friendly.

A supposedly cleaner option is so-called blue hydrogen, where
the gas is produced by steam methane reformation but the emissions
are curtailed using carbon capture and storage. This might roughly
halve the amount of carbon produced by the process but it’s
still far from emissions-free.

Green hydrogen, in contrast, could almost eliminate emissions by
using renewable energy — increasingly abundant, and often
generated at less-than-ideal times — to power the electrolysis of
water.

A more recent addition to the hydrogen-production palette is
turquoise. This is where methane is broken down into hydrogen and
solid carbon, using a process called pyrolysis. Turquoise hydrogen
might seem relatively low on emissions because the carbon can
either be buried or used for industrial processes such as
steelmaking or battery manufacturing, so it doesn’t escape into
the atmosphere.

However,
recent research
shows turquoise hydrogen is actually likely to
be no more carbon-free than the blue variety, owing to emissions
from the natural gas supplies and process heat required.

How do you make green hydrogen?

With electrolysis, all you need to produce large amounts of
hydrogen is water, a big electrolyzer and plentiful supplies of
electricity.

If the electricity comes from renewable sources such as wind,
solar or hydro, then the hydrogen is effectively green; the only
carbon emissions are from those embodied in the generation
infrastructure.

The challenge right now is big electrolyzers are in short
supply, and plentiful supplies of renewable electricity still come
at a significant price. 

Compared to more established production processes, electrolysis
is very expensive, so the market for electrolyzers has been
small.

And while renewable energy production is now high enough to
cause
duck curves
in California and
grid problems
in Germany, overproduction is a relatively recent
development. Most energy markets still have a need for plenty more
renewables just to serve the grid.  

How do you store and use this stuff?

There are theoretically lots of useful things you can do with
green hydrogen. You can add it to natural gas and burn it in
thermal power or district heating plants. You can use it as
precursor for other energy carriers, from ammonia to synthetic
hydrocarbons, or to directly power fuel cells â€” for instance in
cars and ships.

To start with, you can use it simply to replace the industrial
hydrogen that gets made every year from natural gas, and which
amounts to around 10 million metric tons in the U.S. alone.

The main problem with satisfying all these potential markets is
in getting green hydrogen to where it is needed. Storing and
transporting the highly flammable gas is not easy; it takes up a
lot of space and has a habit of making steel pipes and welds
brittle and prone to failure.

Because of this, bulk transport of hydrogen will require
dedicated pipelines, which would be costly to build, pressurizing
the gas, or cooling it to a liquid. Those last two processes are
energy-intensive and would further dent green hydrogen’s already
underwhelming round-trip efficiency (see below).

Why is green hydrogen suddenly such a big deal?

One of the paths toward near-total decarbonization is
electrifying the whole energy system and using clean renewable
power. But electrifying the entire energy system would be hard, or
at least
much more expensive
than combining renewable generation with
low-carbon fuels. Green hydrogen is one of several potential
low-carbon fuels that could take the place of today’s fossil
hydrocarbons.

Admittedly, hydrogen is far from ideal as a fuel. Its low
density makes it hard to store and move around. And its
flammability can be a problem, as a Norwegian hydrogen
filling station blast
highlighted in June 2019.

But other low-carbon fuels have problems too, not least of which
is cost. And since most of them require the production of green
hydrogen as a precursor, why not just stick with the original
product?

Proponents point out that hydrogen is already widely used by
industry, so technical problems relating to storage and transport
are not likely to be insurmountable. Plus, the gas is potentially
very versatile, with
possible applications
in areas ranging from heating and
long-term energy storage to transportation.

The opportunity for green hydrogen to be applied across a wide
range of sectors means there is a correspondingly large number of
companies that could benefit from a burgeoning hydrogen fuel
economy. Of these, perhaps the most significant are the oil and gas
firms that are increasingly facing calls to cut back on fossil fuel
production.

Several oil majors are among the players jostling for pole
position in green hydrogen development. Shell Nederland, for
example, confirmed in May that it had joined forces with energy
company Eneco to bid for capacity in the latest Dutch offshore wind
tender so that it could create a
record-breaking hydrogen cluster
in the Netherlands. Days
later, BP’s solar developer Lightsource BP revealed that it was
mulling the development of an
Australian green hydrogen
plant powered by 1.5 gigawatts of
wind and solar capacity.

Big Oil’s interest in green hydrogen could be critical in
getting the fuel through to commercial viability. Cutting the cost
of green hydrogen production will require massive investment and
massive scale, something the oil majors are uniquely positioned to
provide.

How much does green hydrogen cost to make?

Green hydrogen is expensive today. An a report published last
year (using data from 2018), the International
Energy Agency
 put the cost of green hydrogen at $3 to $7.50 per
kilo, compared to $0.90 to $3.20 for production using steam methane
reformation.

Cutting the cost of electrolyzers will be critical to reducing
the price of green hydrogen, but that will take time and scale.
Electrolyzer costs could halve by 2040, from around $840 per
kilowatt of capacity today, the IEA
said
 last year.

The business case for green hydrogen requires very large amounts
of cheap renewable electricity, because a fair amount is lost in
electrolysis. Electrolyzer efficiencies range from around 60
percent to 80 percent,
according to Shell
. The efficiency challenge is exacerbated by
the fact that many applications may require green hydrogen to power
a fuel cell, leading to further losses.

Some observers have theorized that green hydrogen production
might mop up excess renewable energy capacity from big production
centers, like Europe’s offshore wind farms. Given the still-high
cost of electrolyzers, though, it’s questionable whether green
hydrogen project developers would be willing to let their
electrolyzers sit idle until renewable energy prices drop below a
certain level.

More likely, as is already being mooted by Lightsource BP and
Shell, developers will build green hydrogen production plants with
dedicated renewable energy generation assets in high-resource
locations.

How much green hydrogen is being produced?

Not much, in the grand scheme. Green hydrogen currently
accounts for less than 1 percent of total annual hydrogen
production, according to Wood Mackenzie.

But WoodMac sees output booming in the coming years.The
pipeline of green hydrogen electrolyzer projects nearly
tripled
in the five months to April 2020, to 8.2 gigawatts. The
surge was mainly driven by an increase in large-scale electrolyzer
deployments, with 17 projects scheduled to have 100 megawatts or
more of capacity.

And it’s not simply the case that more projects are getting
developed. By 2027, the average size of electrolyzer systems will
likely exceed 600 megawatts, WoodMac says.

Who is leading the development of green hydrogen?

Green hydrogen seems to be on everyone’s lips at the moment,
with at least
10 countries
looking to the gas for future energy security and
possible exports. The latest nation to jump on the bandwagon is
Portugal, which in May unveiled a national hydrogen strategy said
to be worth €7 billion ($7.7 billion) up to 2030. 

Alongside oil and gas firms, renewable developers see green
hydrogen as an emerging market, with offshore wind leader Ørsted
last month trumpeting the first major project to exclusively target

the transport sector
.

Beyond such big names, a host of smaller companies is hoping to
grab a slice of the growing green hydrogen pie. Companies such as

ITM Power
might not be that well known today, but if green
hydrogen lives up to a fraction of its promise, it could one day be
huge.

And what about hydrogen vehicles?

Ah yes. The eye-catching
Toyota Mirai
helped fuel early hopes that hydrogen fuel-cell
vehicles might vie with electric cars to take over from the
internal combustion engine. But as the EV market has boomed, the
prospect of hydrogen being a serious contender has faded from view,
at least in the passenger vehicle segment.

There are roughly 7,600 hydrogen fuel cell cars on U.S. roads
today, compared to more than 326,400 plug-in electrics
that were sold in the U.S. last year alone.

That said, pundits still expect hydrogen to play a role in
decarbonizing some vehicle segments, with forklifts and heavy-duty
trucks among those most likely to benefit.

Source: FS – GreenTech Media
So, What Exactly Is Green Hydrogen Anyway?