Hydrogen Fuel is Here, But is it Worth It?
Everything you need to know about the Hydrogen Economy in today’s landscape
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Introduction
Ushering the new dawn of a green energy economy is dizzying. Our current system is refined for on-demand energy, whereas the renewable systems we’re putting into place don’t offer that same comfort and reliability- yet. Rather than a one-and-done solution afforded by the reliance on fossil fuels - supported by well over a hundred years of development, we foray into a tangled web of green, ‘decarbonized’ and electrified solutions. These solutions come along with a convoluted statement on just how effective they are in the pursuit of lessening harm to our environment. Today, we dive into one of many moving parts: hydrogen fuel, in the first of a 2-part series on this energetic puzzle piece.
Today we present to you a resource on hydrogen fuel, and in July we’ll follow up with a wealth of equities and interesting projects worth keeping your eye on.
Who remembers Hyde from That 70’s show, discussing fanatically and thick in smoke among friends the car that runs on water?
That’s the hydrogen fuel dream. Splitting water and using hydrogen as a fuel source. It sounds like a no-brainer. The utopian fuel. As it turns out, decades later, there collectively billions of dollars being invested in this multifaceted technology, with policy in place to support its merit in prominent economies around the world.
This begs the question: can hydrogen fuel live up to the halo effect encircling it, and is it worth the investment?
Zero-carbon energy eradicates the convoluted carbon credit middle man for the most part. We see concern in carbon credits assuaging guilt with apology payments by people and companies who can pay, leaving the rest to the possibility of growing restrictions in mobility via travel near and far.
We like technology and affirmative action over negative punishment, even if its a tall order to be more effectively delivered in 6-30 years.
To answer these questions, we need to address a few items. We’ll start by diving into key information about hydrogen fuel, its economy, as well as its strengths and weaknesses in its function and execution.
Hydrogen is a lightweight fuel with a high energy density. When burned, hydrogen is a zero-carbon emission fuel source if we don’t take into account the relatively small amounts of carbon released from machine lubricants. Hydrogen is a secondary fuel source, which means it needs to be manufactured. This in and of itself is a very energy-costly process, especially today where nuclear energy is not a main item on the green energy agenda. Many times, the process of producing hydrogen requires fossil fuels. This has consequences on the true zero-carbon claim of hydrogen fuel, and how it’s manufactured has established, colour-coded classifications based on the method of production.
Hydrogen has the highest energy per mass of any fuel at 120 MJ/kgH₂ on a lower heating value basis, but a low volumetric energy density of 8 MJ/l for liquid hydrogen, compared to a volumetric energy density of 32 MJ/l for gasoline.
Source: “Hydrogen Fact Sheet” CSS.Umich.Edu
Hydrogen energy comes in a few functional forms that are appealing as a fuel source, and also as a means of storing energy. The storage element is interesting, potentially solving for the duck curve problem experienced by renewables like solar and wind.
The duck curve problem describes the phenomenon of peaks and valleys in renewable energy offered by the wind and sun. Overproduction in peak conditions lead to energy that gets wasted or ‘thrown out’, and in the valley hours, when there is insufficient sunlight or wind, the availability of energy cannot necessarily meet the demand. To use regular batteries like we see in a Tesla vehicle, we’d need a football field’s worth of batteries to make it through the night. EV batteries have their own downfalls due to the various precious and finite elements needed to produce them. These batteries also have a shelf life, much like the one in your phone or laptop. You notice their performance decrease over time, a big problem that the energy grid is not immune to. Hydrogen fuel cells can help to solve this problem.
The International Renewable Energy Agency's (IRENA) 2021 World Energy Transitions Outlook predicts that hydrogen and its derivatives will account for about 12% of global energy by 2050.
What’s in today’s Article
Get to Know Hydrogen Energy as a Fuel Source
What is the Hydrogen Economy?
How Far Away are we From Widespread Adoption of Hydrogen Fuel Types?
Where Does Hydrogen Make Sense?
Can We Easily Swap Parts In Our Cars and Infrastructure?
Criticisms and Limitations of Hydrogen as a Fuel Source
Hydrogen Policy Around The World Today
Get to Know Hydrogen Energy as a Fuel Source
This section is mostly informational, which you can treat as an educational resource. We’ll use subsequent major sections to address the general opine on hydrogen in the world and versus its hype.
Hydrogen fuel is a clean, secondary energy source requiring production; primarily through electrolysis (splitting water using renewable electricity) or steam methane reforming (extracting hydrogen from natural gas). It can be used in fuel cells for electricity generation and in modified internal combustion engines, with applications in transportation, power generation, and industrial processes.
Main Themes:
Energy ‘Colour’
How Do We Get Energy Out Of Hydrogen?
How It Works
How It’s Made
Applications
Energy Colour
Because hydrogen is a secondary energy source, that means it needs to be produced. Means of production vary in their own carbon footprint.
Green Hydrogen
Green hydrogen is produced using electricity from renewable sources like wind and solar. It's made by splitting water into hydrogen and oxygen through electrolysis, which is clean but costly.
Green hydrogen is the eco-warrior of the hydrogen family, powered by the sun and wind.
Grey Hydrogen
Grey hydrogen is made from fossil fuels like natural gas or coal, with 95% of the world's hydrogen coming from this method. It's produced using steam methane reforming and coal gasification, but both processes release CO2 into the atmosphere, making it far from eco-friendly.
Think of grey hydrogen as the old-school, Industrial Revolution remix of hydrogen production.
Blue Hydrogen
Blue hydrogen is like grey hydrogen, but with a twist: most of the CO2 emissions are captured and stored underground using carbon capture and storage (CCS). This makes it a cleaner option, but it’s pricey due to the advanced technology needed.
Blue hydrogen is grey hydrogen's hip, environmentally-conscious cousin who invests in eco-tech.
Read last month’s article, Coal is En Vogue & Begging for Carbon Capture Technology
Economies are pushing for prosperity you can only get with access to high-density energy.
How Do We Get Energy Out of Hydrogen?
There are 2 main methods releasing hydrogen as energy functionally for use.
Combustion:
Just like how a traditional car has an internal combustion engine (ICE), the same can be said for hydrogen.
Direct Combustion: Hydrogen is burned in internal combustion engines (ICEs) or turbines, producing water vapor and some nitrogen oxides (NOx) at high temperatures. There are ways to retrofit existing vehicles and create new-to-market vehicles with this technology, which can exploit existing infrastructure, although this reality is at least 5 years away, according to BMW.
Hydrogen Turbines: Similar to natural gas turbines, burning hydrogen to drive electricity generation.
Fuel Cells:
Proton Exchange Membrane Fuel Cells (PEMFCs): Used in vehicles and portable power, converting hydrogen and oxygen into electricity and water.
Solid Oxide Fuel Cells (SOFCs): For stationary power generation, operating at high temperatures and using a ceramic electrolyte. This is what would be used for grid energy.
Alkaline Fuel Cells (AFCs): Utilize an alkaline electrolyte, operating at lower temperatures, and used in specific applications like space travel.
Phosphoric Acid Fuel Cells (PAFCs): Used for stationary power generation, operating at moderate temperatures with phosphoric acid as the electrolyte.
How it’s Made
1. Electrolysis:
The Process: Splits water into hydrogen and oxygen using electricity.
2. Steam Methane Reforming (SMR):
Process: Uses natural gas to produce hydrogen, emitting CO2.
Hydrogen Fuel Applications
1. Transportation:
Fuel Cell Vehicles (FCVs): Hydrogen fuel cells power electric motors in cars, buses, trucks, and trains, emitting only water vapor.
Aviation and Marine.
2. Power Generation:
Fuel Cells: Provide electricity and heat for buildings, data centers, and remote locations.
Hydrogen Turbines: Used for electricity generation, either alone or blended with natural gas.
3. Industrial Applications:
Chemical Industry: Key feedstock for producing ammonia (for fertilizers), methanol, and other chemicals.
Refining: Used to remove sulfur from fuels in oil refineries. (STRENGTH)
Steel Production: Can replace coke (derived from coal) in reducing iron ore to produce steel, lowering CO2 emissions.
4. Energy Storage:
Power-to-Gas: Converts excess renewable electricity into hydrogen for storage and later use.
Long-term Storage: Balances seasonal variations in renewable energy supply.
5. Heating:
Residential and Commercial: Hydrogen can be burned directly in modified natural gas boilers or used in fuel cells for combined heat and power (CHP).
6. Portable Power:
Backup Power Systems: Reliable power for critical infrastructure like hospitals and data centers.
Portable Generators: Used in off-grid applications such as camping and construction sites.
7. Synthetic Fuels and Feedstocks:
Hydrogenation: Produces synthetic fuels and chemicals, contributing to a circular economy.
What is the Hydrogen Economy?
The hydrogen economy refers to a proposed system of energy production, storage, and consumption in which hydrogen plays a central role. In this concept, hydrogen is used as a clean energy carrier that can be produced from various primary energy sources, including renewables like solar and wind, as well as from natural gas and other fossil fuels (often with carbon capture and storage to mitigate emissions). Key aspects of the hydrogen economy include:
1. Hydrogen Production
2. Hydrogen Storage and Distribution
3. Hydrogen Utilization
Check out the Hydrogen Innovators Podcast for a wealth of information on the hydrogen economy.
CedarOwl favourite business and equity, ABB plays a significant role in the electrification of the energy economy. Check out their ABB Energy Pod episode, The Role of Hydrogen in Decarbonizing the World’s Energy Mix. We’ll touch more on ABB in July’s Part 2 follow-up to this CedarOwl Hydrogen Series.
How Far Away From Widespread Adoption of Hydrogen Fuel Types?
“As of this article, there are only 2 hydrogen cars that you may see on the roads, however the likelihood is extremely low. These cars are the Toyota Mirai and Hyundai Nexo, both of which aren’t currently available to order, with only an estimated 30 Nexos that are actually owned and being used. Essentially, they’re near impossible for the public to get a hold of, however there are plans for the hydrogen car market to ramp up over the next few years. The BMW iX5 Hydrogen is another example that isn’t too far away, planning public availability by 2030.”
Source: “Why are we still not seeing hydrogen cars on our roads?” Elmelin.com
The 2030 benchmark is echoed in the policy of multiple countries outline in the policy section of this article, however engineers interviewed in the podcasts above seem to gravitate towards a 2050 benchmark for comprehensive and functional adoption.
Where Does Hydrogen as a Fuel Source Make Sense?
As a TLDR for this section, we’ll synopsize the information outlined below. Hydrogen fuel, whether burned in an internal combustion engine, or as a fuel cell, will shine more brightly in some areas over others. Here are some of the key findings:
Hydrogen is more efficient in higher demand energy situations. For transportation, this means that this fuel source is positively indicated for Ships and Aviation. Both technologies would struggle to accommodate battery power for the sheer magnitude of the electric battery required, leading to unfavourable design accommodations. Conversely, hydrogen is lightweight and refuelling will look very similar to how it does today.
Hydrogen as an energy store is extremely compelling, helping to solve for the duck curve explained above.
Now for the more long form information. Where does hydrogen as a fuel source make sense?
1. Transportation
Heavy-Duty Vehicles:
Trucks and Buses: Hydrogen fuel cells provide longer range and faster refueling times compared to batteries, making them ideal for long-haul trucking and public transportation.
Aviation: Airbus is an engineering company that is rapidly growing. They’re heavy promoters of SAF, or sustainable aviation fuel including what they call eFuels, including hydrogen. They also believe in the future of electrified flight. They are still honestly discovering the true role and effect that hydrogen will have as a zero-carbon integration, but here’s what they claim so far:
At Airbus, we see two primary uses for hydrogen:
Hydrogen propulsion: Hydrogen can be combusted through modified gas-turbine engines or converted into electrical power that complements the gas turbine via fuel cells. The combination of both creates a highly efficient hybrid-electric propulsion chain powered entirely by hydrogen.
Synthetic fuels: Hydrogen can be used to create e-fuels, which are generated exclusively through renewable energy.
We expect to make the necessary decisions on the best combination of hydrogen technologies by 2025.
Source: “Hydrogen: An Important Decarbonization Pathway” Airbus.com
Marine Transport:
Hydrogen fuel cells are indicated for shipping as we’ve outlined above.
A key advantage of hydrogen over other fuel alternatives is the relative ease of retrofitting existing ships with hydrogen fuel cells. (See Q3 for a more complete discussion of its advantages.) Hydrogen fuel could replace 43 percent of voyages between the United States and China without any changes, and 99 percent of voyages with minor changes to fuel capacity or operations.
Source: “Hydrogen: The Key to Decarbonizing the Global Shipping Industry?” CSIS.com
ABB recently struck a partnership with Samskip Shipping to provide power to their shipping fleet.
2. Industrial Applications
Chemical Production:
Ammonia and Methanol: Hydrogen is a key feedstock in the production of ammonia (used in fertilizers) and methanol (used in various industrial processes).
Refining:
Oil Refining: Hydrogen is used to remove sulfur from fuels, helping to produce cleaner-burning fossil fuels.
Steel Production:
Iron Reduction: Hydrogen could replace coke (derived from coal) in the steelmaking process, significantly lowering CO2 emissions, according to Bloomberg.
3. Power Generation and Storage
Stationary Fuel Cells:
Backup Power: Hydrogen fuel cells provide reliable backup power for critical infrastructure such as hospitals, data centers, and telecom towers.
Distributed Generation: Fuel cells can be used in residential and commercial buildings to generate electricity and heat (combined heat and power, or CHP) efficiently.
Grid Balancing and Energy Storage:
Power-to-Gas: Excess renewable electricity can produce hydrogen via electrolysis, which can then be stored and converted back to electricity when needed, balancing the grid.
Seasonal Storage: Hydrogen can store energy over long periods, addressing seasonal variations in renewable energy supply.
4. Decarbonizing Hard-to-Electrify Sectors
Industrial Heat:
High-Temperature Processes: Hydrogen can provide high-temperature heat required in industries like cement and glass production, which are challenging to electrify.
Remote and Off-Grid Power:
Isolated Locations: Hydrogen fuel cells can supply power to remote or off-grid locations where extending the electrical grid is impractical.
Can We Easily Swap Parts In Our Cars and Infrastructure?
Easily? No. But it is possible. Anywhere we can leverage our existing products and infrastructures rather than scrapping them completely is an important place to look if we’re trying to do what’s right with our resources and climate impact awareness.
Cars
1. Engine Compatibility:
Internal Combustion Engines (ICE): Converting ICE vehicles to run on hydrogen requires substantial modifications to accommodate hydrogen's different combustion characteristics, such as higher combustion temperature and different fuel delivery systems.
Fuel Injection Systems: Hydrogen requires different fuel injectors and sensors due to its lower density and different combustion properties compared to gasoline or diesel.
2. Fuel Storage:
Tanks: Retrofitting vehicles with high-pressure hydrogen storage tanks is necessary, as hydrogen is stored at much higher pressures (up to 700 bar) than gasoline or diesel.
Safety Measures: Implementing safety measures, including hydrogen sensors, pressure relief devices, and specialized materials to handle hydrogen's flammability and storage requirements.
3. Emissions and Compliance:
Adapting or installing emission control systems to manage NOx emissions, which can be produced at high temperatures in hydrogen combustion engines.
4. Cost and Feasibility:
Public and private support will have to make it rain to get these techs in ship shape, ready for the commercial and infrastructural channels.
Grid Infrastructure
1. Production and Distribution:
Electrolysis or Reforming: Establishing hydrogen production facilities using electrolysis (preferably powered by renewable energy) or reforming processes, along with infrastructure for transporting and distributing hydrogen.
Storage: Developing storage solutions like underground caverns, pipelines, or on-site tanks, to manage fluctuating supply and demand.
2. Fueling Stations:
Building hydrogen refueling stations requires specialized infrastructure for hydrogen compression, dispensing, and safety features to handle high-pressure storage.
3. Safety and Regulations:
Implementing safety protocols and regulatory standards for hydrogen production, storage, and distribution to ensure public safety and compliance with environmental regulations.
Criticisms and Limitations of Hydrogen as a Fuel Source
Lack of refueling stations, large production cost, [explosion risk] and consolidated carbon market share have impeded the path of hydrogen fuel being commercialized.
Source: “Sustainable Hydrogen Energy in Aviation” ScienceDirect.com
1. Production Challenges
It’s Energy Intensive:
Electrolysis: Producing hydrogen via electrolysis requires significant amounts of electricity, which currently often comes from fossil fuels, limiting its environmental benefits unless renewable sources are used.
Steam Methane Reforming (SMR): The most common method to produce hydrogen from natural gas emits CO2, unless coupled with carbon capture and storage (CCS) technologies to mitigate emissions.
It’s Expensive:
Current production methods, especially green hydrogen from electrolysis, are energetically demanding and not well supported with existing infrastructure. This is an uphill battle we’re not fully certain is worth the climb, even if we’re hopeful.
In Biden’s Hydrogen Hub policy, $8 Billion is secured to the cause and the administration is hopeful of $40 Billion in private investment. That ratio is quite the gawker.
2. Storage and Distribution Issues
Storing Lightweight Hydrogen Has its Risks:
Hydrogen has a low molecular density, which requires high-pressure or cryogenic storage to achieve practical energy storage capacities, adding weight and complexity. Leaks and explosions are a major concern because of this.
Who’s Footing the Infrastructure Bill?
Building a comprehensive hydrogen infrastructure (production facilities, storage tanks, refueling stations, pipelines) is and requires substantial investment and regulatory support.
3. Efficiency Concerns
Energy Losses:
Energy is lost at every stage of hydrogen production, storage, and conversion processes (electrolysis, compression, fuel cell operation), reducing overall efficiency compared to direct use of electricity in battery electric vehicles.
Conversion Losses:
Fuel cells and hydrogen combustion engines have efficiency losses in converting hydrogen energy into usable power, although advancements are being made to improve efficiency.
4. Safety and Handling Challenges
Flammability:
Most fuel is… but hydrogen’s storage complexity makes this a concern in case of leaks near high heat.
Material Compatibility:
Hydrogen can cause embrittlement in certain metals, requiring advanced materials and engineering solutions for safe handling and storage.
5. Technological Maturity and Scale-Up
Technology Readiness:
While hydrogen fuel cell technology is advancing, it is still less mature and less commercially available compared to other energy solutions like batteries and conventional fuels. Ambivalent sentiments can kill projects easily by ripping their runway from beneath them.
Scale-Up Challenges:
Science and the human condition all need to catch up in tandem on where hydrogen fuel fits in order to produce and roll out products that make sense. This is a wicked challenge that engineers believe could take another 25+ years before we eat the fruit of today’s hydrogen seeds.
6. Competition from Alternatives
Those already established and flying, like fossil fuels, BEVs and renewables, will usually eat first.
Hydrogen Policy Around The World Today
1. European Hydrogen Strategy:
The European Union has committed to creating a hydrogen economy as part of its Green Deal. The strategy aims to install at least 40 GW of renewable hydrogen electrolyzers by 2030 and produce up to 10 million tons of green hydrogen.
2. Hydrogen Investment in Japan:
- Japan is heavily investing in hydrogen technology and aims to become a "hydrogen society." The Japanese government has set targets for hydrogen production and consumption, including the establishment of a national hydrogen supply chain and the deployment of hydrogen-powered vehicles.
3. U.S. Hydrogen Hubs:
The U.S. Department of Energy (DOE) announced funding for the development of regional clean hydrogen hubs. These hubs are part of the infrastructure bill passed in 2021, which allocates $8 billion to create hydrogen production and utilization centers across the country.
4. Australia's National Hydrogen Strategy:
Australia has launched its National Hydrogen Strategy to position itself as a major player in the global hydrogen market. This includes significant investments in hydrogen production projects, such as the $300 million Advancing Hydrogen Fund.
5. Saudi Arabia's Green Hydrogen Project:
Saudi Arabia is investing in one of the world’s largest green hydrogen projects in NEOM, a futuristic city being built in the northwest of the country. The project, backed by $5 billion in investments, aims to produce green hydrogen using solar and wind energy.
6. Germany's Hydrogen Strategy:
Germany has committed €9 billion to its National Hydrogen Strategy, with €7 billion earmarked for domestic hydrogen projects and €2 billion for international partnerships. This includes funding for research, development, and the deployment of hydrogen technologies.
7. China's Hydrogen City Initiatives:
China is investing in hydrogen fuel cell technology, with plans to build hydrogen refueling stations and support the deployment of hydrogen fuel cell vehicles. Cities like Beijing, Shanghai, and Guangdong are leading these efforts with significant funding and policy support.
8. UK Hydrogen Strategy:
The UK government released its Hydrogen Strategy, aiming to develop 5 GW of low-carbon hydrogen production capacity by 2030. This includes support for hydrogen production, distribution, and the adoption of hydrogen technologies in various sectors.
Conclusion
Calling back to last month, we still feel strongly that carbon capture tech is an investment the world needs to take more seriously, providing solutions in the short and medium to long term to mitigate the very real burning of fossil fuels including coal in developing economies. They’re going to put the prosperity horse before the environment cart and we need to lean into that reality rather than turn a blind eye or blindly affirm agenda points.
As always, thank you for reading and investing in positive ideas with us.
Hydrogen is the new orange