The green hydrogen hype is becoming real

Hydrogen, a versatile energy carrier with many industrial applications, is touted as a pillar of the energy transition. Green hydrogen in particular is being touted as an essential element for a successful transition.

Many conversations about hydrogen were advertisements with little substantive content. Now, as hydrogen plans become more detailed and real money is involved, not liabilities, reality has set in – and it’s high time it happened.

“I’m sorry Lord Bamford (owner of JCB), I love that you built a hydrogen-powered internal combustion engine, but who will buy it?” Energy analyst and transformation consultant Michael Liebreich wrote in a 2023 Hydrogen Applications Study, citing JCB’s all-new hydrogen-powered excavator.

This semi-rhetorical question, from someone closely involved in the transition, is a rare dose of reality in a transition segment that has largely been met with unbridled verbal enthusiasm, billions of dollars in promises and pledges to build a whole new hydrogen economy.

In fact, meanwhile, the UK recently shelved plans to replace natural gas with hydrogen for heating as part of a rural study to test the suitability of this approach to decarbonization. The reason for changing the decision was the opposition of residents. And the reason for the residents’ opposition was safety.

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Safety is one of the biggest concerns with hydrogen. Highly flammable, the most abundant element in the universe, it requires special transportation infrastructure to avoid potentially devastating accidents. This means that the so-called hydrogen economy would need its own pipeline network to make it happen, because existing gas pipelines cannot simply be filled with hydrogen and used as usual, as some EU officials planned a few years ago.

Safety and transportation is an overall issue related to hydrogen. However, there are also specific problems associated with green hydrogen, obviously the preferred type of hydrogen by transition advocates. One of them is water consumption, which is significant. The second is cost. These problems are inherent to green hydrogen production and are unlikely to be resolved anytime soon.

Water consumption is what green hydrogen is all about. It is produced by the breakdown of water into its component molecules by electrolysis using electricity generated by wind turbines, solar panels or hydropower. There is no way to reduce this consumption, and it takes a lot of water to produce hydrogen – about 20 tons of water per ton of hydrogen.

There is also the issue of efficiency. Electrolysis, which turns water into oxygen and hydrogen, is not a 100% efficient process. In fact, this is rather inefficient, which means a lot of energy is lost in the process. In other words, producing energy (in the form of hydrogen) through electrolysis requires more energy. That’s why green hydrogen has such a high cost. This is why many critics say it doesn’t make economic sense and probably never will.

However, the belief that there will be demand for green hydrogen in the future is strong because, according to a recent industry review by the Financial Times, in some industries there is no other path to decarbonization than green hydrogen.

“There are certain industries where carbon emissions simply cannot be reduced other than with green molecules,” Marco Raffinetti, chief executive of green hydrogen start-up Hyphen, told the FT. “The fertilizer industry is a key driver. Transportation is a big driver. Then power generation, fuel, steel production, etc. So we are particularly focused on these use cases.”

In other words, the only way to make green hydrogen profitable is to force the decarbonization of industries that can only decarbonize by using expensive hydrogen produced by electrolysis using wind or solar energy.

Author: Irina Slav for Oilprice.com

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