Hydrogen storage tanks in Spain in May 2022. Hydrogen has a variety of uses and will be utilized in many industries.
Garcia’s Angel | Bloomberg | Getty Images
The hype around hydrogen has been getting louder over the previous few years – many see it as a crucial tool in reducing the environmental footprint of heavy industry and helping economies meet their net-zero emission goals.
The green hydrogen sector, which focuses on producing it using renewable energy sources similar to wind and solar, has attracted particular interest and boasts several well-known supporters.
Amongst them is German Chancellor Olaf Scholz, who in 2022 called it “one of an important technologies for a climate-neutral world” and “the important thing to decarbonizing our economies.”
Within the business world, international corporations with Iberdrola Down Siemens energy additionally they have the desire to make art in green hydrogen.
But while hydrogen’s potential could be very exciting – the International Energy Agency describes it as a “versatile energy carrier” – there are also unmistakable challenges.
For starters, the overwhelming majority hydrogen production still relies on fossil fuels slightly than renewables – clearly at odds with net-zero emissions targets.
And on the subject of green hydrogen specifically, production costs are a crucial issue and can have to be brought down in the approaching years.
The transport of hydrogen from production sites to users is one other equally vital factor to contemplate.
“Hydrogen transfer is kind of expensive,” said Murray Douglas, head of hydrogen research at Wood Mackenzie, during an interview with CNBC.
“It’s harder to maneuver than natural gas… technically, engineering-wise… it’s just tougher,” he added.
Douglas just isn’t alone in highlighting some of the obstacles to hydrogen delivery.
U.S. Department of Energy, for instance, highlights key challenges “include lowering costs, increasing energy efficiency, keeping hydrogen clean and minimizing hydrogen leakage.”
The DOE adds that more research is required to “examine the trade-offs between hydrogen production options and hydrogen delivery options when considered together as a system.”
Location vital
With regard to logistics surrounding green hydrogen, one area specifically that may require attention is the placement of the production facilities.
They are often intended for areas where renewable energy sources are abundant – similar to Australia, North Africa and the Middle East – but miles away from where the hydrogen will actually be used.
Douglas Wood Mackenzie referred to move options as he reflected on the investment horizon for the following 10 years.
“In fact you may try this, but you most likely need a dedicated pipeline,” he said, noting that it could probably must be a latest construct and shut to finish users.
He said the one other realistic option inside this investment horizon is to export hydrogen in the shape of ammonia.
“You produce hydrogen, green hydrogen, and you then synthesize it into ammonia with nitrogen,” he said.
Douglas noted that ammonia shipping was “a fairly established technology and industry – there are already several receiving ports.”
This ammonia could then be sold on to end users similar to fertilizer producers.
Another option can be to “break the ammonia back into hydrogen”, although that will not be without its own problems.
“As soon as you begin ‘cracking’ back to using hydrogen, you are going to start incurring … quite a lot of energy loss,” Douglas said.
Efficient delivery system needed
In a statement sent to CNBC, Jorgo Chatzimarkakis, CEO of the industry association Hydrogen Europe, was optimistic in regards to the prospects for green hydrogen.
He said it could “develop into a global commodity” before emphasizing the importance of having an “efficient delivery system”.
Chatzimarkakis also stressed the necessity for a certification program because “green hydrogen has to prove that it comes from renewable energy.”
Despite evidently large obstacles, partnerships and programs related to the provision and distribution of green hydrogen are starting to take shape.
For instance, earlier this 12 months Greenergy and Octopus Hydrogen – the latter being part of the Octopus Energy Group – announced launched a “green hydrogen supply partnership”.
Elsewhere, the German company Enertrag says as of 2021, “operates a tank truck and a transport trailer to deliver large amounts of green hydrogen to customers.”
In 2022, Madrid-based energy company Cepsa said it could work with the Port of Rotterdam to develop “the primary green hydrogen corridor between southern and northern Europe.”
Attachment point
While there may be technology and knowledge to supply and deliver hydrogen, one point of contention stays.
“The industry knows the best way to transport hydrogen,” said Douglas of Wood Mackenzie, adding that the energy and chemical sectors have been transporting it “for a very long time – it isn’t latest, it’s just expensive.”
Elaborating on his point, Douglas said reducing production costs was key. The lower they are, the better the transport costs are to regulate.
“I’m undecided if there’s some magic… cost-cutting technology that is going to come back into the transportation equation,” he added.
“We’re not going to suddenly find … a higher hydrogen-transport material,” he said.
“In case you liquefy it, you might have to chill it down a lot, and that is just expensive,” he added. “In case you turn it into ammonia, there’s a cost, after which there are a lot of toxicity challenges.”
“They know the best way to do all these items,” he concluded. “It still just comes all the way down to cost.”