Green hydrogen as key enabler of the energy transition
Today, around 85% of the final energy consumption in Europe is based on fossil fuels. To enable the energy transition, a massive expansion of renewable energy generation is needed. Green hydrogen needs renewable electricity as a basis. The development of hydrogen production plants will create the necessary security to make large investments in renewable energy plants such as offshore wind farms possible. Green hydrogen will become a key driver of renewable energy production growth throughout Europe.
What is green hydrogen?
Green hydrogen is produced by the electrolysis of water using renewable electricity to split the H2O molecule into oxygen (O2) and hydrogen gas (H2). The hydrogen gas can then be compressed and delivered to pipelines or to mobile storage containers for distribution.
Today most hydrogen is made from natural gas which emits CO2, a climate forcing gas. However, there are a number of ways to produce low carbon hydrogen using both fossil and non-fossil energy sources. An overview of some of the most common types of hydrogen are shown below.
Green hydrogen through water electrolysis
The hydrogen rainbow
The most common types of hydrogen production.
Grey
Hydrogen derived from natural gas through a process known as steam methane reforming or SMR. Over 99% of the hydrogen used today is grey or derived from other fossil fuels like oil or coal.
Blue
Hydrogen produced from natural gas but with the CO2 being captured and stored instead of released into the atmosphere. In locations with plentiful gas reserves large blue hydrogen projects are being developed.
Turquoise
Hydrogen produced in a process called methane pyrolysis, which outputs hydrogen and solid carbon. This method of hydrogen production is still in the early stages of commercialization.
Green
Green hydrogen is produced by water electrolysis using electricity from renewable energy sources such as water, wind or solar energy.
Yellow
Produced from electrolysis but using grid electricity as the source of energy. As most grids contain electricity derived from fossil fuels, this hydrogen is not green by definition.
Pink
When hydrogen is produced through electrolysis using nuclear energy as the electricity source. In countries with high shares of Nuclear energy like France, this type of hydrogen may play a large role in the future.
Hydrogen as a transport and storage medium for energy
Regardless of how the hydrogen is produced, it has a major role to play in the future energy system.
Energy is usually not needed where it is produced and must therefore be transported and, if necessary, temporarily stored. Today, around 85% of the final energy required in Europe is transported in the form of fossil fuels. At over 50%, oil and gas account for the largest share. The large natural gas storage facilities in Europe can cover the entire European energy consumption for months and act as a powerful buffer between production and consumption.
With the planned phasing out of these established energy sources, not only must the energy production itself be substituted, also the transport of the energy to the consumer must be solved, as well as the storage of the energy. Hydrogen is a molecule and unlike electricity, is well suited for storing energy and can be transported either in mobile storage containers or, like natural gas, via pipelines.
To effectively enable the storage and transportation of renewably produced energy, hydrogen must be deployed on a large scale.
Hydrogen use cases
Today hydrogen is mostly used in the refining of petrochemicals, the production of ammonia and methanol and the direct reduction of iron. The economics of hydrogen use in these industries is based on the cost structure of grey hydrogen, derived from natural gas. In order to decarbonize these industries, the grey hydrogen must be replaced by green or other types of low carbon hydrogen.
The short term uses cases for hydrogen include heavy duty mobility, mobile power generation, EV fast charging, inland shipping, trains and buildings. These are mostly applications where hydrogen and fuel cells are directly competing with diesel, which often includes taxes and other levies. Many of these use cases are already economically viable today without subsidies.
In the mid- to long-term we must also decarbonize heavy industries and long distance transportation, this is where hydrogen and energy carries derived from hydrogen will play a decisive role. Unfortunately the economics of using hydrogen in these use cases is very challenging and will only become feasible once the technology to produce and distribute hydrogen at scale has become mature.
Why green hydrogen ecosystems are the key
Starting with high value applications like mobility and replacement of diesel generators with fuel cell power systems, unsubsidized use cases can create the basis for attractive private investments. This allows the basic technologies around the production, distribution and use of green hydrogen to be fully de-risked before scaling up to address industrial demands.
As with any change, the difficult part is always getting started. The creation and operation of initially small scale but self-sustaining and organically growing hydrogen ecosystems is key to enabling the renewable energy revolution.
Key success factors for green hydrogen ecosystems:
HD Mobility
Heavy duty trucks create a large and steady offtake volume, critical to secure investment into hydrogen production and refueling infrastructure. Also, by competing directly with diesel the willingness to pay from the customer is highest from all applications.
Smart, efficient and safe logistics
Storage and logistics solutions as well as the associated interfaces and operational parameters need to consider maximizing uptime and being scalable as the networks grow.
Technology pragmatism
Decisions about architecture and component section are critical, focusing on highest reliability at lowest cost maximizes payback.
Cooperative approach
Working closely with likeminded players who can add distinctive value to an ecosystems minimizes the investments needs and associated risks for any individual stakeholder.
Common misconceptions about hydrogen:
Too inefficient
When producing hydrogen through electrolysis about 1/3rd of the energy is transformed into heat. When converted back to electricity in a fuel cell about half of the energy is transformed to heat. If the heat is not used, this means about 2/3rds of the initial renewable energy is lost. This simple reasoning omits the fact that the energy transition will require massive amounts of renewable energy, much of which will be lost if we can’t store it.
Too dangerous
When released into the environment, hydrogen quickly disperses into non-flammable and non-explosive concentrations. Hydrogen fuel cell electric vehicles are designed and certified to meet the same safety standards as gasoline, diesel or battery electric vehicles.
Too expensive
Many studies on the economics of hydrogen applications only look at one part of the system, like the vehicle. What they forget to include is the investment to build the charging infrastructure as well as the additional grid capacity needed to charge all the battery electric vehicles. On an overall system level, the large scale deployment of renewable energy and hydrogen as a means to store and transmit that energy to where it is needed is an integral part of our future energy system. Storage and logistics solutions as well as the associated interfaces and operational parameters need to consider maximizing uptime and being scalable as the networks grow.
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