Hydrogen Shows Progress, the Questions Persist

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The last year has seen a surge of interest in hydrogen from both policymakers and industry. But given the past cycles of hype for hydrogen that ended in disappointment, how realistic are the chances of success this time around? Experts appear confident that hydrogen is on a firmer footing, yet there is still a lot of uncertainty about how it can be most effectively rolled out on a scale to match the urgent need to decarbonize the economy. “It really feels as though things have moved forward,” over the last year, says Graham Cooley, chief executive of ITM Power, a UK-based electrolyzer manufacturer. Speaking at the FT Energy Transition Strategies Summit this week, Cooley points to a couple of “very important drivers” for this. The first is the rapidly falling cost of both renewable power and the electrolyzers used to produce “green hydrogen” which could also see a similar decline in its costs (NE Jul.30'20). The other main driver is the growing adoption of net-zero emissions targets by more companies and countries, which Cooley suggests can only be achieved with help from the widespread deployment of hydrogen. Indeed, hydrogen will be crucial for helping to balance and store the growing volumes of intermittent renewable generation, while also transforming hard-to-decarbonize industries and the heavy transport sector. Thierry Lepercq, CEO of newly founded green hydrogen producer Soladvent, also credits the recent adoption by the European Union of a “clear goal” of an initial 10 million tons of hydrogen production as a signal for the industry and investors to really start moving. “This is a total game changer, it's a tipping point,” said Lepercq, who previously led research, technology and innovation at energy giant Engie. One area of disagreement is over the potential role of green hydrogen, which is produced from the electrolysis of water by renewable power, and that of blue hydrogen, which is derived from the steam methane reforming of natural gas with the addition of carbon capture and storage (CCS) (NE Jun.18'20). An unabashed advocate for green hydrogen, Cooley suggests it can be “deployed immediately,” whereas blue hydrogen “doesn't come on line until 2028-29.” And yet, given the urgent need to decarbonize, blue hydrogen should be prioritized over green from renewables, according to Emmanouil Kakaras, senior vice president and head of new products and energy solutions at Mitsubishi Power Europe. "We need [the] big quantities of hydrogen,” that blue hydrogen can easily deliver, he says, so it should be the main priority, with the rapid scaled-up production of large volumes doing the job of creating demand and facilitating the subsequent entrance of green hydrogen to the market. Concerted policy support is also going to be needed if CCS for blue hydrogen is to take off, Kakaras acknowledges. He suggests that a contract for differences mechanism, which takes into account the avoidance cost of carbon dioxide, could work well, helping to incentivize industries like cement and steel to take “bold steps to introduce carbon-free fuels for their production.” For his part, Cooley questions whether CCS is a realistic proposition at all (NE Nov.19'20). As well as its high cost, who will underwrite all of the CO2 storage, he asks: ”Will those liabilities go on the balance sheet of the oil and gas companies?” And as the cost of electrolysis continues to fall, Cooley warns that CCS schemes could be in danger of becoming stranded assets. Green hydrogen may not be a silver bullet either, warns Jorgen Henningsen, senior adviser at the European Policy Centre, a Brussels-based think tank. He says “a big problem" is the 50% or more of the energy that is lost in the process of converting electricity to hydrogen and back. And, Henningsen adds, it will be “very difficult” for the EU to produce sufficient electricity over the next 10 to 15 years -- first as a substitute for coal and natural gas, then to provide electricity for all the sectors that are targets for electrification, such as transport and domestic heating -- if half of its green power supply is going to be devoted to hydrogen production. Soladvent's Lepercq has no such concerns about potential shortages of green power. He expects there to be more than enough green power generation for all needs and cites Spain as an example of the prolific supply growth potential: "You have in Spain 220 gigawatts of solar projects” currently requesting a grid connection, of which “not even 5%” will be approved -- yet could easily be tapped to produce hydrogen in large volumes. Ronan Kavanagh, London

Upstream Technology, Carbon Capture (CCS), Low-Carbon Policy, Hydrogen, Energy Storage, Renewable Electricity
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