Hydrogen Takes Center Stage At G-20 Summit Energy Meeting

Hydrogen-powered energy solutions are the new kid on the block in the renewable energy space – promising to, among other things, provide a clean alternative to gasoline cars and lithium-ion batteries. This month, in preparation for this year’s G-20 summit in Japan, the International Energy Agency (IEA) released a report detailing the critical challenges and opportunities facing the ‘green hydrogen’ industry today.

Energy and environment ministers and several global companies, including Hyundai Motor, Toyota and Air Liquide, addressed this topic at the G20 Ministerial Meeting on Energy Transitions and Global Environment for Sustainable Growth in Karuizawa, Japan over the weekend. Participants focused on “the ways in which hydrogen can help to achieve a clean, secure and affordable energy future; and how we can go about realizing its potential.” 

The fuel could soon be expanding beyond its humble beginnings in the chemicals industry to become a real disruptor in the energy sector, as I’ve written about before.

Toyota made the first real entry into hydrogen-powered cars or fuel cell vehicles (FCVs) with its Toyota ‘Mirai’ earlier this year. While the car shows promise, challenges abound. A lack of infrastructure and scale means that the economics still don’t work for FCVs compared to their all electric and internal combustion engine (ICE) competitors. Costs increase when hydrogen is produced in a ‘green’ method via renewables and electrolysis (more on that later).

At 12 cents per kWh — the average cost of electricity in the U.S. — the energy it takes to produce 200 kg of clean hydrogen fuel for an FCV like the Mirai for a year would cost you about four times that of the energy required to power a Tesla, and almost twice that required to fuel a gasoline-powered car. Not to mention the MSRP of a Mirai is about $60,000 (lower depending on tax credits). Like electric vehicles, however, those costs will come down over time as infrastructure is developed and scale is achieved. But as of today, FCVs are far from economic.

Still, the potential for this type of fuel is exciting investors and world governments, especially because hydrogen fuel-based applications go beyond the transportation sector. The technology offers ways to decarbonize processes like utility-scale energy storage, iron and steel making, and the chemical industry. Improved air quality and bolstered energy security are additional benefits.

According to the Hydrogen Council, a global CEO initiative aimed at fostering hydrogen as a transition energy source, the hydrogen market could reach $150 billion by 2030.  

The Hubbub around Hydrogen

The idea of using hydrogen for energy is not new: NASA has used liquid hydrogen fuel to launch rockets into orbit since the 1970s. Highly flammable and roughly 3x the energy density of gasoline, the element contributed to the Challenger shuttle explosion. Aside from its use as a liquid fuel, hydrogen powered the electrical systems of the space shuttle fleet through rudimentary fuel cells (their only byproduct – water – is pure enough for the crew members to drink). Advances in fuel cell technology over the past decade are the main driver behind this new wave of enthusiasm for clean hydrogen power.

A fuel cell combines hydrogen and oxygen to produce electricity, heat, and water. Like batteries, fuel cells convert the energy produced by a chemical reaction into usable electric power. However, the fuel cell will produce electricity as long as fuel (hydrogen) is supplied, never losing its charge. This is a massive advantage over today’s lithium-ion battery technology, which degrades down with every charge cycle.

The hydrogen we use today – primarily for industrial purposes like petroleum refining and ammonia production – is extracted from coal and natural gas. It can also be taken from water in an energy-intensive process known as electrolysis. This energy intensive method uses electricity to separate water into gaseous hydrogen (H2) and oxygen (O2), thereby converting electrical energy into chemical energy. If the electricity used for the process comes from renewable sources, the process is entirely emissions-free (so-called green hydrogen), with water and oxygen as the only byproducts.

Hydrogen can be transported as a gas by pipeline or in supercooled liquid form by ships, much like liquefied natural gas (LNG). From there it can be transformed into electricity via fuel cells or methane via the Sabatier reaction – both of which can be used to power homes and industries, and energize transport systems. With appropriate safety measures provided, these energy storage characteristics make hydrogen an excellent candidate for managing variability in electric grids with high wind and solar power penetration.

Report Findings

For all its promise, hydrogen technology still has a number of challenges to overcome. As outlined in the IEA report:

• Hydrogen production today is a highly carbon-intensive process. Almost all hydrogen used today is derived from natural gas and coal. Production of hydrogen is responsible for CO2 emissions of some 830 million tons of carbon dioxide per year, equivalent to the CO2 emissions of the United Kingdom and Indonesia combined. Without carbon capture or more affordable way to produce clean hydrogen (electrolysis) from renewable sources, the environmental cost of producing more hydrogen may be too high.
• Hydrogen infrastructure is virtually nonexistent worldwide beyond that used in industrial applications. Fuel cells are still not a mainstream technology, meaning they have not yet achieved scale and prices remain uneconomical. Electric vehicles, which are overcoming their own infrastructure challenges, have about 77,000 charging stations in the U.S. Hydrogen fueling stations on the other hand total 39 in the entire nation.

For green hydrogen tech to break through, government and industry must work together to ensure existing regulations foster investment rather than deter it. Trade in hydrogen will benefit from common international standards. International co-operation is vital to accelerate the growth of versatile, clean hydrogen around the world. If governments work to scale up hydrogen in a coordinated way, it can help to spur investments in factories and infrastructure that will bring down costs and enable the sharing of knowledge and best practices.

With assistance from James Grant and David Pasmanik