Many analysts argue that hydrogen-powered cars, also known as fuel-cell electric vehicles (FCEVs), make little economic sense compared to battery-powered electric vehicles (BEVs) — that the latter will always be cheaper to buy and run, as well as being two to three times more energy-efficient. And consumers are certainly embracing BEVs, with three million sales worldwide last year, compared to just a few thousand FCEVs.
But according to Daryl Wilson, executive director of the Hydrogen Council, a global CEO-led industry body, the electricity system may struggle to cope with so many BEVs, and FCEVs will have to be part of the picture.
“The discussion today tends to focus much too strongly on the vehicle and not sufficiently on the total system of energy behind that… [which] involves the vehicles, the methods to fuel those vehicles and the back energy system to deliver energy into that whole transportation complex.
“But I think when you pull the lens back and look at the total system and the total transport system, you start to see a different picture than people can see on the street today. And, even from the standpoint of efficiency and effectiveness, and multiple measures, a blended system [of battery and hydrogen-powered vehicles] is probably the right approach in the end.”
Wilson tells Recharge that when there are multiple BEVs trying to charge on a single residential street, problems will begin to arise.
“There’s lots of room for [BEVs], but if we scale that solution up and now every one of your neighbours has one of those cars, and you start to look at the cost and the practicalities of running the electrical system, and you want to run the electrical system on renewable energy that fluctuates very substantially second to second — when you stand back and look at that whole system deployed at scale, new issues and problems come in.
We haven't gone through the cycle of enlarging the transformer at the end of the street.
“They're not apparent today because everything's fine. But we haven't gone through the cycle of enlarging the transformer at the end of the street, enlarging the power generation on the renewables side, adding all of the necessary storage that goes with that.
Analyst Michael Liebreich dismisses such views as “nonsense” (see separate story here).
Wilson adds: “And eventually in Europe, there just isn't enough places to put wind turbines and solar farms to give all that energy for transport. So now we have to look at importing large amounts [of energy].”
The Canadian argues that it would make more sense to import clean hydrogen than electricity.
“Electrons have to go somewhere in seconds on an electrical system. And we’re never going to get perfect matching between the use of electricity and the generation of electricity. So there needs to be large-scale storage as part of the equation. And this is where hydrogen makes a very big contribution.”
Here he is talking about diverting excess wind and solar power to produce hydrogen from electrolysers that use an electric current to split water into hydrogen and oxygen.
“An all-electrical world without any means of chemical storage is not going to be successful. There needs to be substantial molecular storage capability, which buffers energy in time and space.”
'Molecules and power in harmony'
And Wilson — a former CEO of electrolyser maker Hydrogenics (now owned by Cummins) — believes that it will be more efficient to use that hydrogen directly, for instance, in vehicles or for industrial heat, than convert it back into grid electricity.
“Today, 85% of our [energy] systems are based on molecules — natural gas and oil, with 15% electricity,” he explains. “We’re starting to consider how we change that, but if we talk about the practicality of doubling or tripling our electrical system to suddenly go all-electric, that’s not fully realistic.
“We’re going to need a system that contains molecules and electricity, and that system needs to work somewhat in harmony.
“The critical issue is to understand the whole thing as a comprehensive system and not an either/or battle [between electricity and hydrogen].”
Wilson compares the future energy system with the human body.
“We have a circulatory system that has a certain characteristic to get blood around, to get the molecules of oxygen to our brain and our heart and our muscles. And meanwhile, we also have an electrical system in our body, which is operating at a much different speed, and the two work together in harmony.
“And what we need to do is get a harmonious function between molecules and electrons going without carbon. And this is where hydrogen plays a very significant role. And this change in thinking is just as important as a change in policy and economics.”
One of the biggest debates in hydrogen circles has long been whether blue hydrogen — derived from fossil gas with carbon capture and storage (CCS) — should play a major role in the energy transition.
Opponents argue that wide-scale adoption of blue H2 would mean relying on fossil fuels for decades to come, that methane is a powerful greenhouse gas that often leaks, and that CCS cannot capture all the carbon emissions from the methane reforming process, meaning that blue H2 cannot help countries reach their 2050 net-zero targets.
It has also been argued that green hydrogen will be cheaper than blue by the end of this decade — when the first commercial-scale blue H2 facilities are expected on line — therefore negating any need for the fossil-derived fuel.
A cynic might argue that with oil & gas companies such as Shell, BP, Saudi Aramco, Equinor and Sinopec among the Hydrogen Council’s steering members, it would be inevitable that Wilson would argue in favour of the continued use of fossil fuels in the energy transition.
But Wilson makes a powerful argument for blue hydrogen.
“The amount of decarbonisation that can happen with blue hydrogen is very substantial,” he tells Recharge.
“If we want to follow our objectives that we want to get as much carbon out of the atmosphere as quickly as possible, the scale of these blue hydrogen projects far outstrips the scale of any green hydrogen projects today. So I can make the case with very strong evidence that we can be cleaner, cheaper, faster with a blend of blue and green hydrogen.”
Wilson points to a Hydrogen Council forecast showing that global H2 demand will grow fast in the coming decades, with blue hydrogen gradually displacing the unabated grey variety that makes up almost all of the 70 million tonnes of H2 produced today, and green hydrogen volumes overtaking blue around 2040. And he argues that if you remove blue from the equation, it wouldn’t be replaced by green, it would simply mean a lot less low-carbon hydrogen being used and far higher CO2 emissions. In other words, blue and green hydrogen should not be considered as competitors.
“In this chart, we’re making green [hydrogen] go as fast and as big and as soon as possible. If you want to take the blue out of this picture, what have you just done? You’ve taken a massive decarbonisation contribution out of the story?
“If the house is on fire, are you going to start discussing which firetrucks you want from which stations? No, you want all the contributions you can, as fast as you can, to put the fire out. And so I think the sense of urgency and a pragmatic approach says that those [blue] solutions are going to be welcome.”
Wilson explains that arguments against blue hydrogen on cost grounds do not add up, at least not in countries such as the US, UK and Canada that can store large amounts of CO2 in disused offshore oil fields.
“In those regions, there are decisions being made in favor of blue hydrogen projects. These are decisions made by intelligent industrial players who understand this picture and, and they're making their investment decisions accordingly.”
Equinor and Shell are among those companies developing commercial-scale blue — and green — hydrogen projects.
Cost-competitiveness vs grey hydrogen
Perhaps the biggest question in the clean hydrogen space is how to make green and blue H2 cost-competitive with cheap, highly polluting grey hydrogen produced from unabated natural gas or coal.
The Hydrogen Council believes that both green and blue hydrogen will be cost-competitive with grey by 2030, with blue a little cheaper than green.
For blue H2 — which is basically grey hydrogen with the added expense of CCS — this would require grey hydrogen producers to pay a carbon price of $50 per tonne of CO2. The price of carbon in the EU’s Emission Trading System was about €55 ($63) when this article was published.
And a carbon price of $150 per tonne by 2040 would push grey out of the market completely.
Green hydrogen will be cheapest in countries with strong winds and high insolation, combining solar power during the day with wind energy that is often more plentiful at night — such as Chile, Spain, Saudi Arabia and Australia, according to the Hydrogen Council. This is because not only will the levelised cost of this renewable energy be low, but electrolysers are more cost-effective the more hours per day they are in operation — resulting in a low cost of green hydrogen.
Wilson tells Recharge that the Hydrogen Council is “now in discussions around the design of policy”.
“I think multiple policy instruments are needed — a carbon tax or some disincentive around carbon is one contribution. But we also need funding incentives… to [close] the gaps [between grey and green/blue].
“We also have to change the way we think about our energy system… about how we make progress in integrating molecules and electricity… to start viewing the energy system in a holistic way — and that’s not just a matter of policy.”