Hydrogen is back—but will it break through?


Hydrogen is the fuel for a zero-emissions world. We’ve heard that before and it hasn’t happened. For a breakthrough, innovative and sustainable forms of hydrogen supply, in targeted end-uses, must lead the way.

Hydrogen is revolutionary. It fueled our journey to the moon. But for energy applications on Earth, the hydrogen story has been one of broken promises. Since the ‘70s, it’s been positioned as the panacean fuel that will lead to oil independence and the end of global warming—but we’re still waiting. Its potential remains undeniable, but sustainable supply has been its Achilles’ heel.

Hydrogen has been produced in small amounts—using electricity to split water into its constituent parts, via electrolysers—for over 200 years. Historically, the cost at commercial scale has been prohibitive. With rapid wind and solar penetration in electricity grids, and their costs falling by as much as 70 per cent in the last decade, many expect the current decade to herald a “green” hydrogen transformation. Not quite. Scale and efficiency remain challenges.

Hydrogen isn’t found freely in nature. It has to be produced from a primary source.

A 500-megawatt wind farm used for electrolytic hydrogen production would produce roughly 25,000 tonnes of green hydrogen annually. According to the International Energy Agency, global hydrogen consumption was about 70 million tonnes in 2018. This would require 1,400 gigawatts of wind. That’s more than double the global installed capacity in 2018.

At the scale required, there are no easy zero-emissions supply solutions. Non-intermittent green hydrogen can be produced using hydropower. However, because of socio-environmental issues, prospects for new large hydropower plants are limited in advanced economies like Canada. Nuclear energy is also an option. Small modular nuclear reactors (SMRs) hold promise since hydrogen can be produced through thermal or electrolytic routes. SMRs are still emerging; dealing with costs and radioactive waste management will be crucial.

Hydrogen isn’t found freely in nature. It has to be produced from a primary source. This production consumes energy. Hence, an embedded inefficiency is associated with hydrogen use. Rather than converting zero-emissions electricity to hydrogen, it would be more efficient to use the electricity directly in applications like heating buildings and energy storage.

Over 95 per cent of the world’s hydrogen is produced from fossil fuels, called “grey” hydrogen. Natural gas is the dominant source. But there’s also “blue” hydrogen. This is produced from fossil fuels using chemical reactions and decarbonized through carbon capture and storage (CCS). It has the scale the world needs, and it’s at least half the cost of green hydrogen on average.

CCS has its challenges, and has had a few false starts. Typically, 10 per cent of the carbon emissions from CCS-enabled plants are released into the atmosphere. Compared with grey hydrogen, costs are not always competitive and frequently dependent on carbon pricing. Additionally, CCS can be location-specific. Carbon storage requires the right geology. It lacks social acceptance in some regions due to concerns about environmental risks below ground. Blue hydrogen is not a silver bullet. But it does have value as a transition fuel.

A hydrogen breakthrough is a question of supply. Zero-emission, cost-effective, and large-scale production are the attributes of a winning solution.

Hydrogen has significant promise in targeted applications. These include heavy-duty, long-distance transportation (e.g., freight trucks, trains, and ships) and high-temperature industrial processes (e.g., steel, cement, and chemicals production). However, the remarkable attribute of hydrogen is its versatility. Apart from being a fuel, hydrogen is vital feedstock for industrial products consumed at considerable scale. These include ammonia, methanol, refined petroleum products, and steel.

The hydrogen industry needs to integrate fuel and feedstock uses in a complementary manner and connect them to centres of production. Integration and connectivity will build much-needed scale. It could lower system-wide costs. For instance, unlike blue hydrogen, the production of green hydrogen is usually dislocated from where it’s consumed, due to renewables being a stranded resource. This increases costs for additional infrastructure, such as pipelines, needed to deliver green hydrogen to market.

In the long term, hydrogen needs a green grid. This would allow the production of green hydrogen directly from the grid, at the location of consumption, using existing transmission-line infrastructure. But that’s only a partial solution. The sheer magnitude of electricity required challenges green hydrogen’s ability to meet growing global demand alone. Other zero-emissions options are needed.

Innovation efforts on the supply-side cannot rest. Canada’s technology expertise, globally competitive firms, and resource wealth in the hydrogen sphere bode well for innovation leadership against competing nations. A hydrogen breakthrough is a question of supply. Zero-emission, cost-effective, and large-scale production are the attributes of a winning solution.