Store, scale and apply: harnessing hydrogen’s full potential
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Hydrogen has been used by humans for more than a century and its potential as a clean energy source has been recognized for many years. But historically it has always disappointed expectations, most recently in the early 2000s. This has fundamentally changed in the last five years, however, as technology has developed to the point where hydrogen can now be developed, at scale, not only as a carbon-free energy carrier but also as a storage vector.
This was the missing factor. Now that storage is part of the equation, we can unleash the full potential of this versatile gas to achieve – over time - a complete decarbonization of our energy system and our hard-to-abate industrial and transport sectors. That is why the current wave of “hydrogen hype’ is justified and why I truly believe it will be possible for the world to achieve net zero carbon emissions by 2050.
The challenges remain considerable, of course. But now that the political will exists – over 30 countries have released hydrogen road maps, $70 billion of public funding has been committed and the industry has announced over 200 projects to invest some $300 billion through 2030, notes McKinsey – the roadmap we need to follow is relatively straightforward.
Building demand and a hydrogen value chain
The first step is to build demand through new applications. Today’s annual global hydrogen production of around 80 megatonnes - just 4% of the energy mix, according to the International Energy Agency (IEA) - is mostly used in a few industrial processes, such as refining and petrochemicals. We must greatly expand hydrogen’s utilization, for example by replacing natural gas in steel making; building fuel-cell trucks, buses and trains for long-distance transport; blending it into the gas pipelines and boilers that heat buildings; and using it to store renewable electricity.
At the same time, we must replace ‘gray’ hydrogen which contributes to carbon emissions because it is produced from natural gas and which constitutes the bulk of today’s production, with carbon-free versions: either ‘blue’ (or ‘turquoise’) hydrogen, where these emissions are captured at source; or ‘green’ hydrogen, which is produced via electrolysis powered by renewable power. Cleaning up today’s hydrogen output is low-hanging fruit.
More difficult and capital intensive will be building a complete hydrogen value chain, but this is something we must tackle in the coming decade. We can start with large projects, such as the Hamburg Hydrogen Hub in which Mitsubishi Heavy Industries (MHI) Group is involved, that plans to decarbonize the city’s port, shipping infrastructure and local gas pipelines with green hydrogen. Such clusters can be supplied either by onsite hydrogen production or be connected to pipeline networks, say from the North Sea or North Africa in the case of Europe. Alternatively, hydrogen can be shipped in from low-cost production centers like Australia or the Middle East, perhaps in the form of ammonia, via ‘zero-carbon’ carriers powered by synthetic fuels.
Meanwhile, the rapid deployment of solar and wind power means some countries now have a surplus of renewable energy currently being curtailed in most cases, which can be stored as green hydrogen, for example in salt caverns, as MHI Group is planning to do in Utah in the US. Hydrogen allows much longer-term storage than batteries, so the electricity can be fed back into the grid when needed. It is true that the conversion (or ‘round tripping’) of electricity into hydrogen and back again results in substantial energy losses. But critics forget that this surplus energy that renewables produce intermittently would otherwise be simply wasted.
Scaling up and cutting costs
It is also true that carbon-free hydrogen is still too expensive and reducing the cost from the current $4-5/kg in Europe to a competitive $1.50/kg. will be hard – and in other countries like Japan, it is even more costly. Supportive regulation and perhaps even subsidies can take us some of the way, but we have to take care not to create affordability issues for end consumers. Market mechanisms, like contracts for differences, and open competition against other energy sources will be much more effective. But the main and most obvious solution is scale. We must scale up – and massively so – all of the steps I have described above and this will quickly bring prices down.
This is why MHI Group welcomes the UK’s recent pragmatic and market-based hydrogen policy, as right now we need every kilogram of carbon-free hydrogen that we can produce at competitive prices. So, prioritizing cheaper blue hydrogen makes a lot of sense, as long as it is coupled with coherent management of the resulting carbon dioxide. Again, I would point to the UK, as well as the US, Norway and some others as countries where the storage and/or industrial use of CO₂ is being actively promoted.
My group at MHI is working on both carbon-based products, such as synthetic carbon-free fuels, for use in shipping and aviation and on improving the efficiency of converting hydrogen into other carriers, such as ammonia. As someone who has conducted research and lectures on mechanical engineering, I feel privileged to witness research results turning to practice at a great speed. I am excited that we are able to attract bright young engineers and motivate them to use modern skills in electro chemistry and artificial intelligence for the new energy business. It gives me real hope that we will achieve the 100% decarbonization that the world so badly needs.