The million-dollar question is whether and when the emerging technologies would move from the nascent stage to widespread commercial adoption by facilitating scale economies in manufacturing and enhancing their performance for cost-effective clean hydrogen.
by N.S.Venkataraman
Ever since 1995, Global Climate Meets have taken place several times, with COP 28 having been held in Dubai recently.
Careful scrutiny of the proceedings and resolutions passed by several global climate meetings would highlight the fact that there have been conflicts of interest between countries in arriving at strategies to overcome the steadily increasing global warming threat and the consequent grim climate challenges that have been unfolding.
 |
| Iceland [Khamkéo Vilaysing/ Unsplash] |
One consensus view appears to be that the use of fossil fuels (predominantly coal and crude oil) has to be somehow stopped once and for all to prevent the emission of carbon dioxide, sulfur dioxide, nitrous oxide, which are contributing to the steady increase in global temperature. Apart from these, methane emissions from livestock and during transportation and storage of natural gas as well as the use of fluorinated gas have also been cited as contributors to global warming.
As coal, crude oil, and natural gas are now extensively used as fuel and feedstock, and economically and technically viable alternative fuel sources are still in the planning stage with uncertain outcomes, several leaders participating in global climate meetings seem to be of the view, in their hearts of hearts, that totally eliminating the use of fossil fuels is a utopian expectation. The same view is held in the case of methane emissions from livestock as well.
Hope for Green Hydrogen:
There appears to be unanimous agreement that green hydrogen is one of the best options for use as an energy source and as a feedstock source to some extent, as green hydrogen is an eco-friendly fuel, the use of which would cause no emissions. It is recognized that in the process of achieving a global energy revolution in an eco-friendly way by eliminating the use of fossil fuels, green hydrogen energy is one of the clean energies with the brightest application prospects and highest practical values and utilization.
Of course, green hydrogen is pure and clean hydrogen, produced from renewable energy sources like solar, wind, hydro power as well as nuclear energy. The use of green hydrogen would help to decarbonize a range of sectors, including long-haul transport, industrial sectors such as chemicals, and iron and steel where it has proven difficult to reduce emissions. Green hydrogen-powered vehicles would improve air quality and promote energy security.
Issues in Green Hydrogen – Will it end up as hype?
The fact is that green hydrogen can be a good enough substitute as an energy source for brown/grey hydrogen produced from fossil fuel (steam reforming of fossil fuel) that has a hefty carbon footprint. However, to be an effective substitute to ensure that fossil fuel-based hydrogen would be totally eliminated, it is necessary that the production of green hydrogen should be adequately large to replace brown/grey hydrogen.
Global Production of Hydrogen (All Types) vis-Ã -vis Green Hydrogen
Global production and use of hydrogen (all types) are estimated to be around 95 million tons per year in 2022, with the hydrogen almost entirely being produced based on fossil fuel. Global demand for hydrogen has been increasing at around 3% year on year. (Source: International Energy Agency (IEA))
As against this, in the year 2022, the production of green hydrogen produced from renewable energy or from nuclear plants is estimated to be less than one hundred thousand (0.1 million) tons per annum, with the global green hydrogen production capacity being around 109,000 tons per annum only. Obviously, the production of green hydrogen represents a very small fraction of the total hydrogen production/demand in the world as of now.
To entirely replace fossil fuel-based hydrogen production whose demand is increasing at 3% every year, more than 95 million tons per year of green hydrogen have to be produced in the world. This appears to be an uphill task or perhaps, an impossible task as of now.
Issues relating to technology and cost of green hydrogen production:
The key technology for producing green hydrogen involves electrolysis, where an electrolyzer utilizes electricity from renewable sources to split water into hydrogen and oxygen.
Globally, alkaline electrolyzers are most widely deployed for green hydrogen production. The alkaline electrolyzer technology accounted for the highest global green hydrogen market share in 2023.
Electrolyzer technology is power-intensive. The minimum power requirement for green hydrogen production using electrolyzer technology is about 40 kWh/kg of hydrogen, which relates to an efficiency of almost 85%.
The cost of production of green hydrogen produced by water electrolysis process is much higher than that of grey or brown hydrogen. A number of research agencies have estimated that the levelized production cost of traditional grey hydrogen could be around €1.6/kg and €2/kg for blue hydrogen and €3.2/kg for green hydrogen.
However, green hydrogen produced using electrolyzer technology currently costs €3 to €8/kg in some regions including in Europe.
The most attractive production region for green hydrogen is those with abundant, low-cost renewable resources. Such regions include parts of the Middle East, Africa, US, and Australia. It is claimed that in such regions green hydrogen can be produced at the cost of €3 to €5/kg.
The optimistic view is that green hydrogen production cost will decrease when the market would mature due to the emergence of cost-effective and advanced technologies.
It is claimed that reducing the cost of electrolyzers will play a pivotal role in making the production cost of green hydrogen more economically viable. The expectation is that with continuous technological advancements, the efficiency of electrolysis processes will improve, resulting in higher production yields and further contributing to cost-effectiveness.
PEM electrolyzers are the second most preferred technology worldwide for green hydrogen production. Their extended lifespan and superior efficiency distinguish them from alkaline electrolyzers. Alkaline electrolyzers stand out for their cost-effectiveness in terms of installation, while PEM electrolyzers account for a significantly smaller physical footprint. Additionally, PEM electrolyzers boast higher production rates and output pressures.
There are also emerging technologies, such as Solid Oxide Electrolysis Cells (SOEC) and Anion Exchange Membranes (AEM), and they are in their early development stages.
Several research agencies hold the view that the most significant near-term reduction in the cost of production of green hydrogen will come from large-scale, vertically integrated projects encompassing the entire supply chain. These projects will include giga-scale manufacturing of solar modules and their ancillaries, wind turbines, electrolyzers, in-house engineering, procurement, and construction capabilities and the production of green hydrogen and its derivatives – all in a single location.
Another view is that the production cost of green hydrogen can be brought down by starting to have a certain level of demand mandates in certain sectors over the next five years.
Will there be adequate renewable power?
The power for green hydrogen has to be necessarily sourced from renewable energy such as wind, solar, hydro, and nuclear power.
Considering the fact that renewable energy generation from solar, wind, and hydro sources is based on seasonal and climate factors and capacity utilization does not exceed 25%, and the climatic conditions in several regions are not at an adequate level to produce a massive quantity of renewable power, it appears to be impossible to produce a massive quantity of green hydrogen to the level of 95 million tons per annum at present and with the demand increasing at 3% per annum in the future.
Government’s Proactive Strategies and Industry Response
Several governments have initiated a number of proactive strategies to promote green hydrogen.
For example, in the USA, 30 green hydrogen projects are proposed to be implemented during the next five years.
In India, the interim budget for the year 2024-25 provides for an allocation of Rs. 600 crore for the National Green Hydrogen Mission, over and above Rs. 297 crore earmarked in the expenditure budget for 2023-24.
In India, with the country’s first auction for green hydrogen production and electrolyzer manufacturing subsidies sometime back, many big and small companies have entered or are planning to enter the green hydrogen sector in the immediate future.
In the UK, BP is currently working on HyGreen Teesside, a large-scale green hydrogen production facility project, which could deliver 15% of the UK’s 2030 target for low-carbon hydrogen production.
The enthusiastic strategies of the government and industries to promote green hydrogen are very impressive.
China’s Target for Energy Era Not Eco-Friendly – A Case Study
According to the long-term program for the development of hydrogen energy formulated by the Chinese government, it is targeted that China should see the arrival of the hydrogen energy era in the year 2050. So far, so good.
However, China’s target about moving on to the hydrogen energy era in 2050 will not help in negating the climate change to any significant extent, since China would be largely producing hydrogen from coal and it would be brown hydrogen, and the overall share of green hydrogen would not be large.
While China remains in the forefront for investing in and promoting the generation of renewable power including onshore and offshore wind power and solar power, the hydrogen era targeted by China in the year 2050 will unlikely to be based fully on green hydrogen. In other words, China’s hydrogen era could only move part of the way.
Prospects for Green Hydrogen – Views of Adani Group
The following statement released by the Adani group is of interest and appropriate:
Green hydrogen may be the last mile in the net-zero journey for many sectors. However, the cost of green hydrogen must significantly decrease from the current $3 to $5 per kilogram for widespread adoption at $1 per kg when it would be economically viable to decarbonize even the most challenging sectors without a burdensome carbon price.
Power tariffs from wind and solar have dropped steeply in little over a decade, but their intermittent nature required energy storage solutions. About 60 to 70 per cent of green hydrogen’s cost is from electricity, and therefore the renewables cost of production must fall faster than that of green hydrogen,
Storage and transportation of hydrogen are key challenges. Hydrogen hubs, where the production, use, and export of green hydrogen and its derivatives are co-located, can be a strategy. This approach would be capital-intensive.
Is Green Hydrogen a Distant Dream?
To sum up, the future production cost of green hydrogen now remains as a matter of speculation. It is now a matter of hope that the emerging technologies/research efforts would gain traction and would be integrated into the market, to establish dominance in the future electrolysis landscape to boost green hydrogen production to a significant level.
The million-dollar question is whether and when the emerging technologies would move from the nascent stage to widespread commercial adoption by facilitating scale economies in manufacturing and enhancing their performance for cost-effective clean hydrogen.
A cautionary view is that such emerging technologies are still in the research and development stage, and it is unpredictable at this stage as to whether they would be good enough to produce green hydrogen, at a cost comparable to that of the brown or grey hydrogen produced from fossil fuel.
While the entire world community is looking forward to massive production of green hydrogen to overcome the climate crisis, there is also a genuine fear that this expectation should not end up as wishful thinking.
N. S. Venkataraman is a trustee with the "Nandini Voice for the Deprived," a not-for-profit organization that aims to highlight the problems of downtrodden and deprived people and support their cause and to promote probity and ethical values in private and public life and to deliberate on socio-economic issues in a dispassionate and objective manner.
Post a Comment