The UK is the latest country to accelerate plans to develop hydrogen as part of its push to reach net zero. But it is not the first time hydrogen has attracted attention – it has been trumpeted by the scientific community as a possible wonder fuel for around a century. So, what’s changed now?
Thirteen kilometres off the coast in Scheveningen in the Netherlands sits a large oil and gas platform, known as Q13a,1 a planned test site for the world’s first offshore hydrogen plant. From it, the plan is to harness wind and solar energy to split water into its component parts – hydrogen and oxygen – via electrolysis. The essential raw material is desalinated sea water; the energy source is renewable, and there will be no carbon produced from using the output as fuel.
Q13a is a planned test site for the world’s first offshore hydrogen plant
“The goal is to obtain valuable lessons for successfully integrating offshore energy systems to support the acceleration of the energy transition,” explained Lex de Groot, managing director of Neptune Energy, a small North Sea energy explorer.2 “The ability to convert energy from windfarms to hydrogen, then transport it via the existing gas infrastructure, offers major advantages, particularly for those windfarms located much further offshore.”
It is still early days for Q13a, but the concept has certain similarities with one set out almost a century ago. In 1923, the biochemist J.B.S Haldane presented a paper in Cambridge titled Daedalus of Science and the Future,3 in which he wrote: “There will be great power stations where, during windy weather, the surplus power will be used for the electrolytic decomposition of water into oxygen and hydrogen.”
He imagined the output - liquid hydrogen - stored in reservoirs before being distributed for transport, industry, heating and lighting. Today’s experimental ‘world first’ does not feel too far removed from Haldane’s vision.
Decarbonisation: Driving a hydrogen revolution
In the decades since, there have been periodic waves of interest in using hydrogen more extensively, due to its specific characteristics.
Hydrogen has about three times the specific energy density than petrol or diesel
“Hydrogen has excellent gravimetric energy density - the amount of energy it stores relative to weight,” says Tony Roskilly, professor of energy systems at Durham University and lead on Network-H2, the hydrogen-fuelled transportation research network. “Out of all the fuel options we have, it's excellent; it has about three times the specific energy density than petrol or diesel. When you convert it in a fuel cell to produce electricity, it does not release any carbon dioxide (CO2) into the atmosphere; no greenhouse gas is created. It is also the most abundant element on earth and a good form of energy storage, although its volumetric energy density is low. There are challenges producing it, because it is bound to other elements, and storing it for use.”
Again and again, past enthusiasm for hydrogen has proved overblown. After the oil crisis in the 1970s, in the 90s, again in the noughties…the list goes on. This time, however, the world looks different with more governments committing to the net zero target as they try to get to grips with the climate crisis.
“In 2008, the UK committed to an 80 per cent reduction in carbon emissions by 2050, so all the hard-to-abate sectors assumed they would fall into the ‘other’ segment. That’s no longer the case. Everyone knows there is nowhere to hide,” says Nigel Brandon, professor at Imperial College, London, and the electrochemical engineer leading the UK’s hydrogen and fuel cell research hub, H2FC SUPERGEN.
Hydrogen is potentially the most cost-effective way of abating carbon emissions in areas that are difficult to address
“That brings an energy carrier like hydrogen onto the table, because it is potentially the most cost-effective way of abating carbon emissions in areas that are difficult to address, like heavy industry.” (See Hydrogen and deep decarbonisation: The potential for change).
If the aim is to reduce the carbon intensity of the global economy in line with the 2015 Paris Climate Agreement, seismic changes need to be made. The vision emerging from the Energy Transitions Commission, the think tank encompassing industry, finance and the environment, is a three-tier approach: trimming demand for carbon-intensive products and improving energy efficiency, as well as putting decarbonisation technologies, including hydrogen, to work (see Figure 1).
Figure 1: Hydrogen’s possible role in routes to decarbonise
Source: ‘Mission possible: Reaching net-zero carbon emissions from harder-to-abate sectors by mid-century’, Energy Transitions Commission, November 2018
Cost and efficiency
Meanwhile, there have been encouraging advances in the design of fuel cells, making them more efficient and durable. Previously, the cells that allow the generation of electrical current from a chemical reaction between hydrogen and oxygen were tarred by the view they could not compete with the internal combustion engine or lithium-ion batteries.
Cheaper renewable energy could ultimately accelerate the availability and lower the cost of green hydrogen
Other developments, like the fall in the cost of power generated by renewables, are also changing hydrogen’s prospects. Larger wind turbines and better generators and notable improvements in solar efficiency have played a part. Hydrogen is expensive now, but cheaper renewable energy could ultimately accelerate the availability and lower the cost of green hydrogen.4
“Harnessing green energy has been a wonderful success,” says Upul Wijayantha, professor of physical chemistry at Loughborough University, whose research career has encompassed developing ways to chemically split water using solar energy in industry in the UK and US. “But renewables are intermittent, and that produces a particular problem. We cannot anticipate exactly how much energy will be generated when the sun shines or the wind blows, so we cannot anticipate the capacity of the batteries needed to store it. What do you do if you generate more energy than you can store? Use the excess to generate hydrogen.”
But generating hydrogen from renewables does not solve the challenge unless viable options are developed to store and transport it as and when it is needed by the end user.
“Hydrogen is going to have a larger role in the future,” says Brandon, who has played an energy advisory role to governments, including the UK and China. “If we can make low-carbon electricity and use it, that’s what we should do. If we need to convert the low-carbon electricity to hydrogen for various reasons, we should do it. If we have to convert that hydrogen to ammonia to move it a long distance, we can do that too. And if it is helpful to convert it to a synthetic green fuel for aviation, then we should. There is a hierarchy of use; but we should only do the things at the bottom of the hierarchy if none of the things at the top are effective. We need to be concentrating on an optimal mix.”
Relationships between sectors could be reshaped by using electrical and chemical pathways to deliver a lower-carbon outcome
One focus is sector coupling; it’s not about how hydrogen could help one sector decarbonise, it is about how relationships between sectors could be reshaped by using electrical and chemical pathways to deliver a lower-carbon outcome. “Sectors that formerly rather developed independently could be linked in the future via hydrogen,” as Armin Schnettler of Siemens Energy argued.’5
“If you look at current modelling on decarbonising industry, transport, buildings and our homes, there is no scenario that achieves net zero without hydrogen playing a part,” Roskilly says. “For a long time, some assumed we could electrify all our transport, heating and industrial processes. But some things are more difficult to electrify than others and doing so does not make economic sense. In the future, hydrogen is likely to play a much greater role; there is no question about it.”
Even so, it is important not to get carried away. Hydrogen can be flexible, and that is useful, but changing chemical states is energy sapping. Brandon says he now speaks about ‘hydrogen in the economy’ rather than ‘the hydrogen economy’ – a small, but important, distinction.
Figure 2: Hydrogen: Joined up thinking
Source: ‘Hydrogen solutions’, Siemens Energy, 2020
Sources of hydrogen
There is a major issue, however, which is where the hydrogen will come from. Today, both natural gas and coal are major sources. “From a climate perspective, the challenge is producing hydrogen in a low- or zero-carbon manner,” says Rick Stathers, senior environmental, social and governance (ESG) analyst and climate lead at Aviva Investors. “The cheapest way to produce hydrogen at the moment is by steam methane reforming at a high temperature, which creates grey hydrogen and CO2. Around 95 per cent of the hydrogen we use now is produced this way.
Blue hydrogen is an alternative being flagged by the UK
“Blue hydrogen is an alternative being flagged by the UK; it also involves steam methane reforming, but the carbon is captured or utilised,” adds Stathers. “In that sense, you do not release CO2 to the atmosphere. But industrial carbon capture is an early stage technology, and there is comparatively limited capacity to carry it out at scale.” (Read more on carbon capture and sequestration (CCS), here.)
“We need to be clear-eyed about this,” says Max Burns, senior research analyst for industrials at Aviva Investors. “Cheap and plentiful natural gas from the US, Russia and the Middle East is a likely feedstock for hydrogen, but this does little to reduce greenhouse gas emissions. Until we perfect CCS, blue hydrogen is really ‘greyish’ hydrogen with dubious green credentials. The timeline for widespread hydrogen uptake is likely to be extended.”
Green hydrogen is the optimal option from an environmental perspective, produced from using renewable electricity and electrolysis to split water. But again, the commercial reality is challenging – at least in the short term. “We only produce a very small amount of hydrogen in this way now; it is less than five per cent overall and not cost effective at the moment,” says Stathers.
Figure 3: Hydrogen production pathways for energy transition
Source: ‘Hydrogen for Australia's future’, Commonwealth of Australia, 2018
The question then is: How rapidly could the economics of green hydrogen production change? “The cost of hydrogen will be determined by the scale we use it,” says Roskilly. “If scaling up happens in one sector before another, the impact will feed across, because energy systems are closely integrated. Say, for example, hydrogen is used more extensively in decarbonising industry, costs will be reduced and at that point it becomes more viable to feed into transport solutions as well. We could see this in industrial clusters and freight movement; using hydrogen or hydrogen-rich fuels within the clusters could feed into heavy goods vehicles, rail and shipping.”
If we continue to innovate and we massively scale up, we will see the price of hydrogen drop dramatically
Roskilly believes hydrogen could match the same price point as natural gas. “To do that, we need to reduce the cost of renewable electricity, reduce the cost of electrolysis and hydrogen storage and distribution. If we continue to innovate and we massively scale up, we will see the price of hydrogen drop dramatically, just as we have experienced with solar and wind energy,” he says. China’s commitment to reach net zero by 2060 is expected to speed developments in this area.
“The consensus is that green hydrogen could reach cost parity with hydrogen produced from fossil fuels and CCS by around 2030,” says Stathers.6 “And it could be the cheapest form by 2050. That implies a potential cost reduction of 60 to 70 per cent in the next 30 years. But the cost curve could change faster: that depends on policy factors like the price of carbon and how the market develops.”
Other suppliers, like the nuclear industry, could also come into the frame. In the UK, for instance, there are plans to explore whether excess low-carbon heat from Sizewell C (still in the planning phase in Suffolk), could make hydrogen.
“It feels like a new gold rush,” says Darryl Murphy, head of infrastructure at Aviva Investors, pointing out there are more potential sources and uses of hydrogen being proposed than are ever likely to materialise at scale.
Meanwhile, on the ground, practical considerations are at the fore, such as whether electrolysers could be located close to renewable energy sites and network corridors. This explains the recent exploratory work in northern Europe on the potential to convert oil platforms, where this article began. It is on the research agenda in the Netherlands and now in the UK too, with the Scottish Crown Estate poised to explore whether oil platforms offshore can be repurposed.7
“We are not there yet, but we are starting to see public and private sector participants coming together to look at the options,” says Laurence Monnier, Aviva Investors’ head of quantitative research in real assets.
Figure 4: Offshore pathways for hydrogen
Source: ‘Hydrogen production takes system to new levels’, Tractebel, October 1, 2019
To be most effective at network scale, hydrogen needs to be stored in pressurised tanks or in geological sites underground. Active research is underway on both options. In Europe, it is already evident there is scope to store meaningful amounts of hydrogen in underground salt caverns8. A salt cavern works like a lung, which can be filled and emptied, in cavities that could be as tall as the Eiffel Tower.9
Running these long-term stores is not a distant prospect: there are already sites up and running in the UK and US. “We already store hydrogen in that way to provide strategic reserves for petrochemical operations,” Brandon explains.
Other challenges include distribution and safety. Diatomic hydrogen is small and liable to escape, but work on whether it would be possible to use the existing gas network is ongoing.
The upgrade of the UK's gas networks has been going on for years on a rolling basis
“In the UK, we already have a national gas transmission and distribution network. We have paid for it, it is already in the ground, and has the potential to transport and store for hydrogen,” says Roskilly. “Further work is needed, but the upgrade of our gas networks has been going on for years on a rolling basis. All our old cast iron pipes are being replaced or relined with polyethylene pipes. Once this is done, there should be no issues for the transport of hydrogen. The upgrades are well advanced. There is UK research showing it is possible to add up to 20 per cent hydrogen to natural gas, which requires no changes to our current infrastructure and use; Germany already has plans to do this. Then you are in a position to gradually increase it.
“We also have larger-scale gas transmission pipes operating at higher pressure running through the spine of the country,” adds Roskilly. “There is a new project to carry out an offline, full-scale demonstration of up to 100 per cent hydrogen in the national transmission system; we are partners in this exciting project.”
When it comes to safety, he believes hydrogen is “as safe or safer than the other fuels we use, either for transport or in our homes. There are safety risks, but these can be managed, just as we do for natural gas. And there is no risk of carbon monoxide poisoning when hydrogen is used in a boiler.” Perhaps counterintuitively, its tendency to escape reduces the danger of combustion, because it tends to dissipate and not linger at low levels in the atmosphere.
From chemical to energy source and energy store
If hydrogen’s role changes from being one chemical in the industrial mix to an energy source and store in its own right, the implications could be game changing; from the geopolitics of supply to the fuel that propels the bus at the end of the road.
Japan, for instance, rejected nuclear power after an earthquake damaged its Fukushima Daiichi reactor in 2011. It is backing hydrogen to deliver ‘3E + S’ - energy security, economic efficiency, environmental protection and safety.’10
In Japan, it is already possible to shower using a fuel cell-driven water heating system and hydrogen derived from recycled plastic
Not everyone will embrace hydrogen as comprehensively as Japan, however. It is a first-mover, where it is already possible to shower using a fuel cell-driven water heating system and hydrogen derived from recycled plastic.11 Nevertheless, members of the G20 say they are on board.12 In addition to Japan, South Korea, China, Australia, Canada, France, Germany, Portugal, Spain and the wider European Union already have hydrogen strategies mapped out.
In the UK, the policy is being used to influence the ‘levelling up’ agenda. “If you look at industrial clusters across the country, they are primarily in areas that have suffered great economic deprivation over the years,” says Roskilly. “They include Teeside, Humberside, South Wales and so on. These are areas in need of investment, and their future is linked to clean growth. We need to build on our manufacturing base and some of the processes involved are difficult to decarbonise. If we can carry them out in a greener way using hydrogen, it could be a win-win.”
Meanwhile, the investment landscape is evolving. “There are liquid, large cap stocks that are beginning to develop pilot projects with hydrogen now, but there are few where the impact on revenues is material,” says Stathers. “European industrial gas producers are expecting meaningful revenues from blue hydrogen within about five years. We also expect to see demand for particular chemicals like polysilicon jump: it’s a critical component in solar cells, and demand could grow to fuel hydrogen production and the production of low-carbon electricity.”
The greatest transport potential is thought to be in areas that are hard to electrify
In transport, the greatest potential is thought to be in areas that are hard to electrify, including long-distance freight, trains and shipping. (Conversely, battery electric vehicles are cheaper and look likely to be adopted faster in the small car market.) With heating, there is potential to increase hydrogen in the fuel blend and some future-facing manufacturers already have hydrogen-ready boilers to hand. In both instances, there are select infrastructure issues to address.
“From where we are today, you can gain exposure to the hydrogen theme through a combination of renewable energy companies, pure play fuel cell and electrolyser producers,” says Stathers.
Another indirect route is through the companies that will allow an energy carrier like hydrogen to be integrated into the wider system. “Managing the grid is going to be a big challenge for the future,” says Richard Howard, research director at the energy analytics group, Aurora Energy. “If you wind the clock back to 1990 or so, we had a really strong system with about 50 power plants on it. Now we have millions of individual power-generating units and power is moving in multiple directions. It becomes very complicated. The whole spectrum of technologies that help to run a stable system safely will become increasingly important, surprisingly quickly.”
Realising a different future
Hydrogen was dismissed as an energy option a little over ten years ago, when then US energy secretary Steve Chu said it would take ‘four miracles’ to make it a contender.13 Cost, the inadequacy of fuel cell technology, lack of high-density storage and distribution infrastructure were all obstacles in his view.
Energy consultants are asking what happens in the future when excess renewables take the cost of energy to almost nil
A decade later, there has been progress in all areas, some more than others. Most striking of all, perhaps, is that energy consultants are asking what happens in the future when excess renewables take the cost of energy to almost nil. This scenario is someway off, but the suggestion that hydrogen electrolysers could be set to ‘go’ is worth contemplating for those keenly awaiting cheaper green hydrogen.
A larger role for hydrogen implies a world of change. “We need to remember that when it comes to making big, strategic decisions, it is not just about science and technology,” says Wijayantha. “It’s about politics, it’s about power, it’s about the environment and jobs and people’s welfare. It’s about everything. It is a seismic shift from where we are.”
Hydrogen and deep decarbonisation: The potential for change
The arrival of net zero targets has focused minds in sectors that have historically used fossil fuels and generated significant carbon emissions. Some are now contemplating different pathways:
Steel is an iron alloy, a vital material used in engineering and construction, and highly valued for its strength and malleability. Over 1.3 billion tons are manufactured every year.
The most commonly used production process is energy intensive; it involves heating iron ore to over 1000 degrees Celcius in a blast furnace, using coking coal as fuel. The process removes water and other impurities before specific elements like nickel, chromium or molybdenum are added. CO2 is an inevitable output.
Swedish steel group SSAB is testing a different process that would allow steel manufacturing without using fossil fuels.14 It plans to replace coking coal with green hydrogen produced by electrolysis, reducing iron ore into sponge iron, then convert that into steel in an electric arc furnace. The resulting steel has a carbon footprint of almost zero but the processes are costly and not expected to reach industrial scale until around 2035.
Some modes of transport are hard to decarbonise, including aviation. A number of organisations, including Airbus15, are actively exploring using hydrogen as fuel, particularly for short-haul flights.
For longer distances, synthetic fuels (synfuels) are seen to be more likely.16 They are technically proven, made with renewable energy. The process involves using hydrogen produced from splitting water, then adding carbon captured from industrial processes or directly from the air to produce fuel.17
Synfuels are already being used in some fossil fuel blends, at a scale so small they barely register. Scaling up is likely to depend on the availability of sustainable electricity to produce low-carbon hydrogen, and therefore most likely in countries with an abundance of renewables. Costs are markedly higher than for conventional jet fuel; some analyses suggest these could be absorbed by business and wealthier travellers.
Ethylene has been described as one of the world’s most important chemicals, used in the production of plastics. Using oil or natural gas as a feedstock, petrochemical plants use steam to crack molecular bonds and extract ethylene gas. This can be used to make everything from polyethylene pipes to polyester for textiles and vinyl.
There are two main routes being considered to decarbonise; the first is carbon capture and storage (CCS), to ensure that the waste gases are stored or used in other industrial applications. The Royal Society states there are no plants using CCS in this area.18 The other is a switch to low-carbon energy, including green hydrogen from electrolysis or blue hydrogen (steam methane reformation plus CCS).