Summary
Highlights
Hydrogen's versatility could disrupt energy production, storage, transportation, and industrials. Analysts project clean hydrogen could meet 22% of global energy needs by 2050, up from 4% today. This transition would require massive additional renewable electricity generation—more than the world currently produces—and an investment of $11 trillion in production, storage, and transportation infrastructure. While costs are declining for electrolyzers and renewable energy, government policy and investment are crucial to accelerating these advancements. Experts believe hydrogen will become an integral part of life for serious decarbonization efforts.
To avert the worst effects of climate change, global carbon emissions need to drop to zero by 2050. Green hydrogen, produced exclusively from renewable power, is emerging as a critical solution. It's a clean-burning molecule that can decarbonize hard-to-abate sectors like chemical, iron, and steel industries, as well as long-haul transportation. Hydrogen can also heat homes and store renewable electricity that would otherwise be wasted. This makes it indispensable for achieving a zero-carbon emission future, addressing industrial emissions not covered by renewable energy.
Hydrogen is not found freely in nature and must be extracted from compounds like water, an energy-intensive process. Currently, most hydrogen is produced from fossil fuels, contributing significantly to CO2 emissions (843 metric tons annually). While green hydrogen is appealing due to its clean production, it's expensive to produce. Other challenges include a lack of infrastructure for transport and storage, and the high cost of fuel cells. However, solutions are emerging, with predictions of the hydrogen market reaching $2.5 trillion by 2050.
Hydrogen production methods are categorized by colors. Brown hydrogen is made from coal, and gray hydrogen, accounting for three-quarters of global production, is extracted from natural gas, both emitting large amounts of CO2. Blue hydrogen also uses fossil fuels but incorporates carbon capture technology. Green hydrogen is produced through electrolysis, splitting water into hydrogen and oxygen using electricity from renewable sources like wind and solar. Currently, hydrogen is primarily used in industries like oil refining, ammonia, methanol, and steel production.
Recent advancements and a global push for sustainability are making green hydrogen appealing. Europe is a leader, directing nearly half a trillion euros towards hydrogen within its Green Deal. China aims to dramatically increase hydrogen production and transition its automotive fleet. South Korea and Japan are focusing on fuel cells and the automotive market. In the US, President-elect Joe Biden pledged significant investment in clean energy, and the Department of Energy announced $100 million for hydrogen and fuel cell research.
Hydrogen has the potential to transform transportation as a direct replacement for gas and diesel, offering advantages over electric vehicles. A fuel cell converts hydrogen into electricity to power a car, with water vapor as the only byproduct. Compared to battery-powered cars, hydrogen fuel cell vehicles offer much faster refueling times (5 minutes vs. 45 minutes) and five times better energy storage per unit volume, allowing for longer ranges. This makes them particularly effective for long-haul trucking, freight shipping, and air travel, where heavy batteries are inefficient.
Despite its advantages, hydrogen fuel cell vehicle adoption has been slow, with only 18,000 on the road globally by 2019, compared to 7.2 million electric cars. Only three car companies (Honda, Hyundai, Toyota) offer hydrogen passenger vehicles, which are significantly more expensive than entry-level EVs. A major barrier is the lack of fueling infrastructure, with only 407 operational hydrogen stations worldwide, mostly in Europe and Asia. The US has just over 40 stations, with California hosting almost all of them. The inefficiency of hydrogen fuel, losing 70% of its energy during production, transport, and conversion, is another concern, though hydrogen's high energy density mitigates this.
The high cost of fuel cell components and hydrogen storage tanks remains a hurdle, with fuel cells costing up to $50,000 per unit without subsidies. However, new developments, like Kubogen's storage material, promise to increase hydrogen storage capacity four to five times in the same space, at a significantly lower cost. This could make the fuel cell itself the only major cost factor compared to battery vehicles. Experts predict a substantial drop in hydrogen production costs due to decreasing electrolyzer and renewable energy prices, making green hydrogen more competitive with fossil fuels.
Hydrogen is gaining excitement for its ability to store otherwise wasted renewable energy. The abundance of renewable power on grids in places like California and Texas leads to curtailments, highlighting the need for storage. Hydrogen is seen as an ideal way to store renewable power for long periods. Mitsubishi Power and Magnum Development are working on a project in Utah to build a 1,000-megawatt clean power storage facility using hydrogen in salt caverns. This facility, operational by 2025, will repower the Intermountain Power Project, aiming for 100% green hydrogen use by 2045. Hydrogen storage in salt domes offers a low-cost, long-term solution compared to battery storage for extended periods.