Is There Hydrogen in Your Future?

Early proponents of the hydrogen economy encountered an intractable two-part problem:

1. The cheapest source of hydrogen is natural gas, which leaves a carbon footprint larger than using natural gas directly; and
2. Producing hydrogen from electricity is expensive and not terribly efficient.

These points are made in Joseph Romm’s book The Hype About Hydrogen (2005) and are probably responsible for the trope: “Hydrogen is the future, and always will be.”  It turns out that despite these truths, hydrogen has an inevitable and crucial role to play in both the continued development of renewable power and in meeting climate targets.

The Basics

First, the basics—passing electricity through water splits H₂O into H₂ and O_[2] in a process called electrolysis, using devices called electrolyzers. This process was originally discovered over two centuries ago and has been available at utility-scale (i.e., 100-MW-sized projects) since the 1920s.

Romm points out that both the highest economic value and the highest carbon-reduction value of renewable electricity comes from displacing power produced by conventional fossil-based power plants. What Romm did not anticipate is that renewables would become so prevalent, there would be times when they would be available in such quantities, that even with all fossil units taken offline, renewable supply would outpace demand for power. Getting much of our power from wind and solar inevitably means there will be times when power supply outpaces demand, with excess power simply thrown away.

Falling Capital and Production Costs

This happens in the US, but even more often in Europe where they have begun deploying electrolyzer plants to make better use of the available renewable electricity. The fact that the process is 70% efficient doesn’t matter if the alternative—often simply turning off the power—is zero percent efficient!  European deployments have, in just a few years, dropped electrolyzer capital costs due to economies of scale from $2,000 per kilowatt of electrolyzer to $1,000 per kilowatt for megawatt-scale plants. At a hundred-megawatt scale, the cost is said to be less than half that. Nel Hydrogen says that with higher production levels, the cost of their units would drop to $200/kW.

The confluence of falling electrolyzer cost and increasing availability of low-cost renewable electricity makes cost-competitive hydrogen a near certainty. It takes 55-60 kWh of electricity to produce a kilogram of hydrogen. This comes to somewhere between $1.50 and $2.00 per kilogram based on prevailing wholesale market prices. In a hydrogen vehicle, that kilogram of hydrogen will get you as far as two gallons of gasoline in a conventional vehicle, so this is like $1/gallon gasoline. While real world retail costs would be significantly higher, it is clearly suggestive.

Decarbonization and Hydrogen Markets

But aren’t battery cars better than hydrogen cars, you might ask. It doesn’t matter! Today, the US produces 10 million tons of hydrogen per year, the energy equivalent of nearly 7% of gasoline sales. It virtually all comes from natural gas and almost none of it is used for transportation. In other words, there is a very large potential market for hydrogen entirely outside the transportation industry. Electrifying everything includes processes where only hydrogen will suffice; in truth, there is no path to zero carbon except by producing clean fuels from electricity. Of course, there are already hydrogen cars—as well as hydrogen buses, trucks, trains, and even an airplane. Soon there will be hydrogen ships.

Hydrogen can also substitute directly for natural gas, where it reduces the carbon footprint of the natural gas system. Pipelines can carry hydrogen at levels up to 30% without affecting end-use appliances. But that’s not really the limit because hydrogen can be combined with carbon dioxide to make methane, the principal component of natural gas. In other words, we could replace 100% of fossil gas with synthetic fuels from renewables. In the US, the gas pipeline system delivers twice as much energy as the electric grid, suggesting a huge new market for renewable electricity—making climate-neutral fuels.

Bolstering the Value of Renewable Power

The costs of wind and solar are dropping, but so is the value of the power they produce. The marginal value of power at noon on June 21 in California may already be zero because all solar plants are producing at near maximum at that time. Using that “surplus” energy to make synthetic fuels is critical to maintaining the value of renewable power and decarbonizing the remainder of the energy economy.

RHA Promotes Renewable Power to Clean Fuel

Yes, hydrogen and hydrogen derivatives produced from renewable electricity are in our future and it would be good to start investing in them now to move the industry forward. The Renewable Hydrogen Alliance (RHA) is a trade association established to promote using renewable electricity to make hydrogen and other climate-neutral fuels. Check us out at RenewableH2.org!

Ken Dragoon
Executive Director
Renewable Hydrogen Alliance (RHA)