Generating electricity from clean hydrogen has always been elusive. But that may change in the not-so-distant future: the technological, political and environmental factors — the variables to create the hydrogen economy — are aligning. What remains a sticking point, though, is the cost factor.
But the cost of wind and solar power has dramatically dropped, making the associated technologies and fuels affordable. Notably, the price of the underlying technology is falling: the electrolyzer, which splits apart the hydrogen and oxygen from the water where it is found.
“We expect to see commercial scale in the nearer term,” says Bruce Hallbert, a director for the Idaho National Laboratory, at a web conference sponsored by the United States Energy Association on Friday. “We move with purpose. We address all the issues: economics and safety. The scale will follow relatively soon.” He adds that the lab is testing hydrogen produced from nuclear energy, which does not result in added CO2 emissions and among the utilities it is partnering with are Exelon Corp., First Energy Corp. and Xcel Energy.
To be clear, more than 99% of the world’s hydrogen production so far has been from fossil fuels. That’s called grey hydrogen. Hydrogen produced from natural gas in which the CO2 is captured and stored is considered “blue.” The objective is to get to green hydrogen, whereby solar panels or wind could produce electricity that is put through an electrolyzer to create pure hydrogen gas.
Until that point arrives, battery storage that can displace peaker plants must suffice. That can relieve grid pressures during periods of high demand, which means that utilities do not have to procure expensive power or build new generation units. But batteries have a critical shortfall, which is that they cannot provide long-term storage. That is, they can charge and discharge, keeping the electrons flowing for limited periods.
Enter hydrogen. Using a fuel cell, that hydrogen will produce electricity for sustained periods. Solar panels and wind turbines may be producing excess electricity that must be stored in a battery and used in an electrolyzer to create pure hydrogen gas. That gas is stored in a tank before it is piped to a fuel cell, which uses hydrogen to create electricity. Some say a mix of green and blue hydrogen is a faster and more optimal solution.
The goal is to decarbonize natural gas, says Michael Green, general manager for nuclear policy at the Arizona Public Service, who also spoke at the webinar and whose company is also working with the Idaho National Lab. “We can introduce hydrogen into the natural gas fleet.” Right now, green hydrogen can be blended with natural gas at a rate of 15% while getting to 30% is doable.
“Our work in Europe is focused on green hydrogen,” adds Mark Eisenhower, partner for energy, sustainability and infrastructure with Guidehouse. “We are utilizing this work and applying it to North America. So how do we accelerate the market and what are the catalysts? Industrial clusters will drive scale. What is the right combo of blue hydrogen and green hydrogen? The upstream community would endorse a blue hydrogen complement.”
The Real Power
Take the Los Angeles Department of Water and Power, which has agreed with authorities in Utah to buy much of the output from the so-called Intermountain Power Project that will generate green hydrogen from wind and solar: the plant will convert from a coal to a natural-gas combined-cycle facility that can also burn hydrogen as a fuel. By 2025, 30% of the electricity will come from green hydrogen and by 2045, all of it will. That comports with LA’s green energy goals.
Moreover, a salt dome located on-site will store the hydrogen. When that fuel is needed, it can be accessed while the electricity is transported to Los Angeles via the existing transmission infrastructure.
“By 2045, we have to have a carbon-free energy source,” says Paul Schultz, with the Los Angeles Department of Water and Power at the webinar. “This is the first contract that requires performance guarantees.”
In its Hydrogen Economy Outlook, Bloomberg New Energy Finance says that green hydrogen would cut global greenhouse gases by 34% by 2050. To achieve that, however, it underscores that major policy revisions are necessary. Hydrogen produced from wind and solar could get generated for between $0.8 and $1.6 a kilogram. That is roughly the cost of natural gas.
That will require, however, $150 billion in subsidies over the next decade — less than what fossil fuels now receive. The money would go to creating a supply chain and expanding the necessary infrastructure. Without such progressive policies, the research firm says that reaching a favorable pricing point will remain off-limits.
“Hydrogen has potential to become the fuel that powers a clean economy,” writes Kobad Bhavnagri, lead author of the report and head of its industrial decarbonization effort. “In the years ahead, it will be possible to produce it at low cost using wind and solar power, to store it underground for months, and then to pipe it on-demand to power everything from ships to steel mills.
“If the clean hydrogen industry can scale up, many of the hard-to-abate sectors could be decarbonized using hydrogen, at surprisingly low costs,” Bhavnagri says.
Internationally, the political powers want to see the clean hydrogen economy move forward and they are therefore willing to invest in it. Here, the incoming Biden administration is also focused on a net-zero future. Hydrogen is a critical component of that, all enabled because the technologies are getting better and cheaper. Getting to scale is the chief hurdle. If projects like the Intermountain Power Project work as advertised, hydrogen’s outlook will be a lot brighter.