Renewable Energy & Hydrogen Notes
Renewable Energy & Hydrogen Notes
A brief industry insight on hydrogen & the renewable energy sector
While deep-diving into the realms of industrial gas, the catalyst or next growth spurt after going through some reports points towards the direction of green hydrogen.
It is interesting as hydrogen is a colourless gas, but has been categorized into colours.
I thought it was worthwhile to spend a bit more time on this, also as notes for the future me.
Colours of Hydrogen
Now hydrogen is colourless. The colour scheme merely depicts how it is being obtained, which mainly ties back to the carbon footprint.
There are many colours now, but the key categories will be brown, grey, blue and green.
Brown and black hydrogen, as the colour implies, derives from coal gasification. Since hydrogen seldom occurs naturally in its true form, it is often found bound to carbon (thus hydrocarbon = hydrogen + carbon) or water (hydrogen + oxygen)
Due to the abundance of hydrocarbons around us, be it in oil or coal, hydrogen can be easily obtained at a meagre cost, but with a high carbon footprint.
Grey hydrogen derives from steam reformation without carbon capture, while blue hydrogen is the exact same process but with carbon capture and storage.
So long as the carbon byproducts are not released into the atmosphere, it thus qualifies the produced hydrogen to be categorized as blue hydrogen.
Blue hydrogen has its fair share of detractors as the steam reformation process would still involve using fossil fuels or carbon-intensive fuels. The holy grail of carbon-neutral hydrogen would be green hydrogen.
Green hydrogen
Green hydrogen on paper is ingenious
Since water, one of the most abundant resources is derived from 2 hydrogen molecules and 1 oxygen molecule, stripping the hydrogen and oxygen would yield 2 valuable materials.
The process of stripping these 2 types of molecules involves the electrolysis process.
Of course, energy is required to run the electrolysis process. The theory is that so long renewable green energy is used to run the electrolysis process, the hydrogen produced will be green, and with no carbon byproduct!
The downside? Using green energy to produce green hydrogen is notoriously expensive. It is one of the most expensive ways to produce hydrogen.
Green comes with a price. A study published by BloombergNEF shows that green hydrogen’s cost in 2023 is almost 2x more than blue hydrogen.
The bright side? Costs are coming down, and in some markets, green hydrogen will even undercut grey hydrogen from existing plants.
With economies of scale and supportive policies, what used to be impossible from a cost perspective could come true.
The new and existing beneficiaries
A host of existing and new players will be beneficiaries should hydrogen become mainstream.
Some names include FCEL 0.00%↑, BE 0.00%↑, PLUG 0.00%↑, Adani Green Energy, APD 0.00%↑, Sinopec, Air Liquide, LIND 0.00%↑, Shell Plc, Reliance Industries Limited and many more.
Pure players, existing industrial gas players and traditional carbon fuel companies are looking at hydrogen as the next renewable energy initiative.
The scientific challenge of hydrogen as a fuel
Hydrogen as a renewable energy comes with its sceptics and challenges. Cost as highlighted earlier, plays a major hindrance to accelerated adoption.
There are also other renewable energy sources making headway starts, for example, solar, where converting energy from the sun into electricity and stored in lithium-ion batteries is more straightforward.
Hydrogen exists in gaseous form in atmospheric and normal temperatures. To efficiently store hydrogen, it has to be either stored in high-pressure tanks or liquified form.
Both storage forms consume energy and require infrastructure which can be heavy, especially large scale.
Not to also mention, hydrogen is also highly flammable. Any leaks or mishaps will be catastrophic.
Lastly, clean water as an input to obtain hydrogen could further use up a scarce resource required for our daily lives.
My opinion
I think hydrogen as a renewable energy source will play some of its part in the future. When economies of scale turn in favour, hydrogen as a fuel source will play a part in our daily lives.
It wouldn’t replace or dethrone any existing energy source, due to the constraints mentioned, at least for the next 50-100 years.
The quantum of how much it would contribute to the total renewable energy market share is still uncertain. In fact, according to the International Energy Agency, hydrogen will play just a fiddle role compared to wind and solar.
Barring any significant changes in the breakdown, I would be hesitant to enter into a pure-play hydrogen company.