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Is hydrogen worth the hype?
February 2, 2021
| Scott Donachie

You may remember Hydrogen from Grade 9 chemistry class. The first element on the periodic table with the symbol H, atomic number 1. It is the lightest element in the table and is the most abundant chemical substance in the universe.

But these days, you’re hearing more about hydrogen an energy source. Some hydrogen announcements have earned the title of “hottest new tech on the decarbonization block”.

So, what is hydrogen and should we believe all the hype?

A $2.5 trillion estimated hydrogen market by 2050

Hydrogen Council

At a basic level, it is important to understand that hydrogen is a carrier and not an energy source. It can deliver and store energy. This means that it needs a primary source of energy to be produced, such as solar, electricity, nuclear power, or gas. The power of hydrogen is then unleashed in a fuel cell. Within a fuel cell, hydrogen is turned into electricity, power, or heat.

A lot of the recent buzz has been around green and blue hydrogen. This color distinction comes from the source of energy used to produce hydrogen. While green and blue hydrogen are the most famous, there are other colors as well. The graphic below provides a clear breakdown of these hydrogen colors and how they are produced.

Green hydrogen

Green hydrogen is the second most common type of hydrogen produced today, making up about 1-3% of the total volume. It is hydrogen produced by splitting water via electrolysis. This produces hydrogen and oxygen. Hydrogen is captured and oxygen is released into the atmosphere.

To achieve electrolysis, power is needed in the form of electricity. When using renewable energy sources, such as wind or solar to power this process, “green” hydrogen is produced with the harmless by-product of oxygen gas.

Blue Hydrogen

On the other hand, blue hydrogen is when natural gas (CH4 in the graphic) is split into hydrogen and CO2 through a reformer. The CO2 is then captured and stored, thus mitigating its environmental impact. This capturing is done through a process called Carbon Capture Usage (CCU) as seen in the graphic.  

Grey Hydrogen

Grey hydrogen, the most commonly produced hydrogen today, has been around for many years but it is far from clean. This production process is similar to blue hydrogen, except CO2 is not captured, rather it is released into the atmosphere, thus “grey” hydrogen. Grey hydrogen is commonly used in oil refining or in the production of ammonia. These processes are based on fossil sources and thus extremely carbon intensive; 1 kg of hydrogen produces 11 tons of CO2 emissions[1].

Today, more than 95% of hydrogen is fossil-based and heavily carbon intensive. 1 kg of grey hydrogen produces 11 tons of CO2 emissions

S&P Global Ratings

One novel spin on emerging hydrogen fuel options is “clean hydrogen” made from waste. Pioneers of this waste-to-hydrogen technology are taking advantage of the cheap feedstock that is trash, which also happens to be so abundant, it has become a crisis.

This advantage point can be a game-changer for hydrogen since the biggest roadblock for clean hydrogen, like green hydrogen, has been its high production cost. Today, the production cost of green hydrogen is 4-6 times more than that of fossil-based hydrogen[2]. Additionally, waste to hydrogen technology can capture and store carbon such that the process is carbon negative. This is crucial as we move towards a decarbonized future.

The hype around hydrogen seems to come and go. The first hydrogen-powered internal combustion engine was constructed in1807 and the debate around the use of hydrogen from electrolyzers to replace coal emerged as early as 1863. In the 1970’s, the term “hydrogen economy” was first coined and after OPEC imposed an oil embargo, the development of fuel cells for commercial applications began. You may even remember US president George W. Bush announcing in 2003 that “the first car driven by a child born today could be powered by hydrogen”.[3]

The hype around hydrogen is nothing new.

However, looking back, we see that in each round of hydrogen interest, whenever oil costs have dipped or new fossil fuels supplies have been unlocked, the hype subsides[4].

What we see now is a different system change. Renewables have become very cheap which is good news for green hydrogen. Emerging waste to hydrogen technology is also looking to be a promising cost-effective option for clean hydrogen with the added benefit of tackling the global waste crisis[5].

Most importantly, the climate targets of the Paris Agreement are unlikely to be met unless decarbonization reaches every corner of the economy. This includes hard-to-decarbonize sectors such as steel production, marine shipping, long-distance trucking and aviation, which are the same sectors where hydrogen makes the strongest business and climate case.

Deployed at scale, hydrogen from all sources could account for 15% of energy consumed by 2050

Hydrogen Council

History also tells us that energy transitions typically take decades. As with any technology to scale, hydrogen is going to need coordinated policy, lowered production costs, and a massive growth of renewables. Therefore, even though these drivers are pushing hydrogen into reality rather than a renewed hype, it is likely that the next decade will focus on the low-hanging fruits within the grey hydrogen landscape and improving fuel cell efficiencies.    






Scott Donachie
Scott Donachie