Hydrogen on the rise as clean fuel
Market conditions, gains in technology build momentum for a crucial role for the gas in the future energy landscape
Hydrogen has long been widely applied by industries such as chemicals, metals, food processing and medicine as a material input. Therefore, it is conventionally available as a byproduct of many industrial processes.
China is one of the world's biggest hydrogen producers and consumers. In 2016, it produced and consumed around 18.5 million metric tons of hydrogen, and this is still growing at about 4 percent per year.
However, hydrogen has hardly been perceived as a daily source of energy. Even fewer people are aware of its potential as a clean and even zero-emission energy when hydrogen is completely produced from renewables.
Policymakers in many countries are giving more emphasis than before to hydrogen. In China, the National Development and Reform Commission published the Energy Technology Revolution and Innovation Action Plan: 2016-2030, which clearly listed hydrogen and fuel cells as one of the key revolutionary technologies.
In February, China's hydrogen energy and fuel cell industry innovation strategic alliance was founded, chaired by the newly formed CHN Energy, a State-owned energy behemoth and currently the biggest hydrogen producer in China. CHN Energy is committed to investment in technologies as well as supply chain infrastructure for hydrogen to be applied as clean energy in the power sector as well as the transportation sector.
Globally, Germany, Japan and the United States are leading the deployment of a hydrogen supply chain for transport applications. More than 1,000 hydrogen refueling stations are expected to be built in the three countries by 2025. Japan even plans to build a hydrogen-powered athletes' town for the 2020 Olympic Games, in addition to the deployment of around 6,000 fuel cell electric vehicles in Tokyo. Many developments are signaling that we are probably on the eve of commercialization of hydrogen-for-energy technologies.
Hydrogen as an energy carrier intrinsically has many advantages. First, its energy intensity is higher than that of gasoline. Five kilograms of hydrogen carried aboard a vehicle can sustain driving up to 500 kilometers. Second, refueling can be done as quickly as that of gasoline and diesel. These two advantages make it especially suitable for long-distance or heavy-duty trips, such as intercity buses and cargo delivery by trucks.
Third, hydrogen can be produced by various means, especially from clean and indigenous sources such as renewables, nuclear energy, biomass and biofuel. This is crucially important for the energy security of countries that are highly reliant on imports of fossil fuels to power their transportation sectors.
Fourth, both the scale and the location of hydrogen production are highly flexible. Hydrogen can be stored by many means, centralized or distributed, and then delivered for dispensing, using existing infrastructure such as road and rail. Compare that with an electrified transportation system - fully reliant on the power grid and vulnerable to blackout, cyberattack or physical attack, threats that could paralyze the road transportation sector.
Last but not least, when the share of intermittent renewables is high, using surplus or abandoned renewables to produce hydrogen offers not only a daily tool to balance the power grid, but also a cross-season option to store energy in the sunny (for solar), windy (for wind) or rainy (for hydropower) seasons, and then release it back to the power grid in the other seasons.
Therefore, one can say that when hydrogen technologies are commercially ready, hydrogen and its related infrastructure will surely become as strategic an energy form as fossil fuels are today. The key question is when.
Currently, hydrogen technologies still face limitations, especially regarding the cost and durability of the fuel cell stack, the energy conversion efficiency in producing hydrogen, and the cost and convenience of transporting it. But new, favorable momentums are coming, not only from technological progress but also from market conditions.
Fuel cell technologies, especially based on hydrogen, have come a long way since the last rush to the concept around the beginning of the 2000s. Leading fuel cell manufacturers these days are claiming 5,000-plus hours of durability, sufficient for mileage of more than 160,000 km. The cost of each kilowatt has also come down, from $124 (105 euros; ￡95) per kW in 2006 to $53 as of 2016.
At the same time, the technologies for production and transportation of hydrogen have demonstrated significant progress, in terms of both energy conversion efficiency and the costs of delivering hydrogen along the supply chain.
The US Department of Energy is expecting the fuel cell cost to fall to $40 per kW, together with the hydrogen cost at the fuel station dispenser coming down to $4 per kg, by 2020. At these levels, hydrogen-powered vehicles will become economically competitive with conventional fossil fuel-based vehicles in certain types of fleets.
In the past decade, there have also been game-changing developments in new renewables, especially wind, solar, biomass, biofuel and waste-to-energy. These capacities have been built so fast that in many countries, the absorption of them by the power grids has become an increasingly heavy burden, due to daily intermittency as well as seasonality of these renewables.
While the wasting of renewable energy has become a concern, power grid operators have been obliged to build up more storage capacity, currently focusing on pump hydropower and stationary batteries. These are expensive solutions with limited and nonflexible capacity. Many people expect that the increasing fleets of electric vehicles will become an important factor to absorb the intermittency of renewables in the near future. But even then, the capacity would be insufficient to handle seasonal fluctuation of renewables. Hydrogen can do so, however.
Finally, fuel cell electric vehicles are complementary to battery electric vehicle fleets. This is because battery electric vehicles, limited by the energy intensity and durability of batteries, are mostly suitable for urban and short-distance trips.
But we are yet to see a common and firm vision on hydrogen formed among global policymakers and industry players. Without that, coordination on policies to accelerate the development of the technologies, market and infrastructure for hydrogen is not likely. One should be reminded how the learning curve was realized for solar and wind technologies in the past two decades.
Strong and appropriate policies will create the initial critical mass of demand, so as to drastically bring down costs while improving the performance of the new technologies. That will further enable new niche markets to adopt the technologies. A larger market will invite more investment into the supply chain as well as the infrastructure, while technologies keep advancing due to the learning effect. In the process, economies of scale will gradually kick in, as well as perhaps the lock-in effect in forming new social-technical systems.
A global strategy to coordinate the policies and industries' moves will add to the effectiveness as well as certainty of such acceleration effects.