The Inflation Discount Act (IRA), together with Canadian, EU, and different jurisdictional insurance policies, are incenting a transition to inexperienced hydrogen, albeit in numerous methods and with usually silly use instances. If governmental cash is a thumb on the size, they need to be insuring that the hydrogen really is inexperienced. From that perspective, three phrases turn out to be essential: additionality, temporality, and locality. They aren’t within the debate for warmth pumps or EVs, however are within the debate for hydrogen.
First, a reminder. Above is my up to date projection for hydrogen demand by 2100. I’ve been iterating this angle for a few years, including a time perspective to Michael Liebreich’s hydrogen ladder, together with some judgments about what’s extra more likely to be the end result. A number of issues are apparent and contrarian. The primary is that complete hydrogen demand goes to say no by this century, in my view. That’s as a result of hydrogen as manufactured and used right this moment is a worldwide warming downside on the size of all of aviation globally, so it should be addressed.
Present consumption is about 120 million tons a 12 months, together with about 30 million tons of syngas used as a feedstock for varied industrial processes, together with direct discount of iron (DRI) steel-making processes. The most important shopper by far of hydrogen right this moment is the oil business, which makes use of about 38 million tons per 12 months in refineries to desulphurize crude oil. As peak oil demand arrives this decade most probably, the best sulphur crudes will probably be off the market first, together with Alberta’s and Venezuela’s merchandise, as they’re costlier to course of and refine in comparison with the lighter, sweeter crude that’s near water that the world nonetheless has a number of. With a lot much less high-sulphur crude being refined, hydrogen demand plummets.
The subsequent largest level of consumption is for manufacturing ammonia, virtually totally for fertilizer. That’s about 30 million tons a 12 months, and it’s a serious supply of greenhouse fuel emissions when manufactured and when utilized to fields, the place it turns into N20, a greenhouse fuel with a worldwide warming potential 265 instances that of CO2 and one which persists within the ambiance for a really very long time. As we transfer ahead, options in hand — continued motion of subsistence and small maintain farmers to higher livings in cities, precision agriculture together with with drones, agrigenetics to maximise nature-based nitrogen fixing within the soil, and low-tillage agriculture to maximise soil carbon seize — will considerably scale back the necessity for ammonia-based fertilizers.
The one vital progress space I undertaking for hydrogen is in metal manufacturing, the place my projection by 2100 solely sees a 30 million tons per 12 months requirement for DRI processes, together with HYBRIT’s pure hydrogen technique.
Whereas the oil and fuel industries and fuel utilities try to make hydrogen for heating, hydrogen for transportation, and hydrogen derived e-fuels a factor to exchange the present pure fuel and petroleum derivatives used for power in these instances, my projection doesn’t embrace these. Heating will probably be electrified, with warmth pumps doing the heavy lifting. All floor transportation will electrify, brief haul aviation will electrify quickly with growing vary each decade, and all inland and two-thirds of close to shore transport will electrify, with solely the longest marine and air journeys requiring burnable fuels. And people fuels will probably be biofuels, not e-fuels.
The job is to repair the black and grey hydrogen demand we now have right this moment, not invent new makes use of for hydrogen the place it’s a nasty match, however with no large demand enhance in demand for hydrogen, there will probably be no want for blue hydrogen from fossil gasoline reserves, in order that they’ll turn out to be worthless, therefore the extreme efforts to push the sq. peg of hydrogen into so many spherical holes.
However as we shift to manufacturing the already large quantities of low-carbon hydrogen we’ll require, we now have to verify it really is decrease carbon, and right here’s the place a head-scratcher enters the equation. Why do we now have to think about it in a different way than we consider EVs and warmth pumps, that are two major wedges for decarbonization?
The primary level to consider is the place the hydrogen will probably be manufactured. Proper now, about 85% of all hydrogen is manufactured on the level of consumption. Ammonia crops have steam reformation models fed by a pure fuel pipeline on the power, in order that the hydrogen will be moved immediately into the Haber-Bosch course of with out having to retailer, compress, or distribute the hydrogen. Oil refineries do steam reformation of pure fuel within the refinery grounds for essentially the most half to keep away from having to retailer, compress, or distribute it. These processes flip pure fuel (or coal) into hydrogen within the quantities required for his or her industrial makes use of on the instances when the hydrogen is required. That’s as a result of hydrogen could be very costly to retailer, compress, and distribute. The market has clearly spoken on this topic, and hydrogen changing into inexperienced doesn’t change these dynamics.
Consequently, sooner or later we’ll see a high-power electrical energy distribution line and water pipe operating to ammonia-manufacturing crops, the place electrolyzers will flip the water and electrical energy into hydrogen within the quantity required when it’s required for manufacturing ammonia. Hydrogen gained’t be manufactured 1,000 km away and trucked or piped to the power.
And that implies that typically, hydrogen will probably be manufactured with electrical energy from our shared grid, not in some off-grid location within the wilds someplace. That makes it similar to EVs and warmth pumps, however we largely don’t argue about additionality, temporality, or locality once we speak about these electrification use instances, and it’s price teasing out why not.
Paul Martin, of the Hydrogen Science Coalition, and I mentioned these ideas this week within the context of my new podcast channel, Redefining Power – Tech, a sub-channel of the nice Redefining Power podcast run by two European cleantech funding bankers. Should you’ve loved my occasional internet hosting on CleanTechnica’s CleanTech Talks podcast, please observe my new podcast.
What’s additionality, and why is it essential? Additionality is an idea that touches on a number of elements of decarbonization, together with offsets and electrification. I used to be launched to the subject by Mark Trexler, a worldwide offsets knowledgeable. The premise is straightforward: if you happen to aren’t including new clear options or power, however as an alternative are simply claiming that one thing that already exists ought to offer you credit for greenness, you aren’t doing a lot. In offsets, it’s like claiming that an present forest that you simply aren’t chopping down is a brand new optimistic factor, versus one thing present that you’re rebranding. And in inexperienced hydrogen, it’s guaranteeing that the inexperienced electrical energy required comes from a brand new wind or photo voltaic farm as an alternative of simply diverting inexperienced electrical energy from one finish level to a different finish level.
Temporality is completely different. As I’ve identified, hydrogen will be inexperienced, however it may well’t be low cost with out large subsidies from governments. That’s as a result of you possibly can’t simply construct a wind or photo voltaic farm and run electrolyzers a part of the time. Electrolyzers stay very costly, are solely considered one of about 28 elements in a serious electrolysis facility, and storage and compression and distribution prices add up rapidly. If a facility is shopping for wind power and operating the electrolyzer solely when the wind is blowing at that wind farm, then it’s adhering to temporality necessities, however the price of hydrogen skyrockets because the capital price of the electrolysis plant shouldn’t be being unfold throughout adequate kilograms of hydrogen, so every turns into costlier. Given the capital price, house owners of the plant will wish to run it as near 24/7/365 as attainable, which implies that they require firmed electrical energy, which usually will imply shopping for wind and photo voltaic electrical energy, and having behind-the-meter storage. And which means grid prices for electrical energy, not wind or photo voltaic PPA prices. As I famous when analyzing the just lately deserted Norwegian liquid hydrogen for transport gasoline facility, even on the common $58 per MWh industrial price of electrical energy, the hydrogen would probably have price $9.30 per kg undelivered.
Locality is the final idea. What it means is that purchasing electrical energy from a distant wind or photo voltaic farm whereas operating electrolyzers on a grid the place all further energy will come from coal or pure fuel is a shell sport. You probably have an electrolysis facility in coal-heavy Indiana with its 748 kg CO2 per MWh, then it doesn’t a lot matter in case you are shopping for wind from a wind farm in Montana. All of the electrical energy the power consumes will probably be further to Indiana’s demand load, and can most probably be met by burning extra coal, for a web detrimental final result.
So why is inexperienced hydrogen completely different than warmth pumps or EVs? The primary purpose is that EVs and warmth pumps present large emissions reductions over the options that they displace, besides on the filthiest of grids. EVs are as much as 80% environment friendly from electrical technology to wheel, and warmth pumps are 2-5 instances as environment friendly at delivering warmth as fuel furnaces, so it’s laborious to discover a grid within the developed world the place both is worse than burning gasoline, diesel, or pure fuel. And all grids have gotten decrease carbon over time, so grids that had been out of the operating on warmth pumps, resembling Alberta’s when it was at 790 kg CO2 per MWh, at the moment are decrease carbon for warmth pumps, as shutting down coal has put them underneath 600 kg CO2 per MWh.
The second is that EVs and warmth pumps are used so much much less usually than the very costly electrolysis facility could be. Private autos usually sit parked for 95% of the 12 months, and lots of fleet autos don’t have far more utilization. Warmth pumps in hotter climates are barely used within the winter, and in colder climates are hardly ever used in the summertime, with each sometimes experiencing spring and fall low utilization. By comparability, the capital price of electrolysis services require them to be run as near 24/7/365 as attainable.
Personally, I’m a bit torn on this. I’ve been advocating that constructing electrical energy demand on this century with EVs and warmth pumps inevitably results in extra wind, photo voltaic, transmission, and storage being added to the grid, which advantages everybody. And the additions are low and diffuse, so demanding placing inexperienced electrical energy earlier than electrification doesn’t make sense. Why is electrolysis completely different?
Properly, if it’s displacing a pure fuel feed for steam reformation of hydrogen in entrance of the Haber-Bosch course of for ammonia on a clear grid the place wind, photo voltaic, and hydro are at present being curtailed on account of lack of demand, it in all probability doesn’t. There simply aren’t that many locations the place that’s true. And if it’s on a grid like Washington state or the province of Quebec, the place the electrical energy is plentiful and really low carbon, it in all probability doesn’t matter.
And if an organization is paying for the electrolysis out of their very own pocket as a result of it makes enterprise sense, and the grid will decarbonize round it, that’s additionally nice, though the agency must be cautious about overstating their inexperienced credentials.
The place it turns into problematic is that if inexperienced hydrogen is being backed or incentivized by governmental cash. In that case, the federal government shouldn’t be rewarding corporations for emitting extra CO2 when they’re coloring exterior of the traces of additionality, temporality, and locality. And governments actually shouldn’t be subsidizing silly makes use of of hydrogen, which is to say all those that anticipate it to exchange fossil fuels as an power supply. That latter ship has sailed within the US, it appears, however the newest information out of Europe makes it clear that they’re beginning to concentrate to the fantasy of hydrogen for power in a helpful versus starstruck manner.
The latest instance of that was the information this week that Germany has known as the bluff of the pure fuel utilities which had been pretending that they will have totally hydrogen pipelines and no pure fuel pipelines for heating in time for the nation to fulfill its emissions targets. How did Germany name their bluff? They launched a invoice that might permit fuel utilities to advertise and set up hydrogen-ready boilers and home equipment if the utilities would decide to offering a agency plan in 2024 that might arrive at 100% hydrogen in all buildings and houses by 2035. The fuel utilities, after all, stated that this was utterly unattainable, exposing their busted flush for all to see.
The place, when, and the way electrical energy is generated for hydrogen issues if we really wish to deal with local weather change. Inventing new makes use of for hydrogen earlier than changing present ones is generally a nasty thought. Governments shouldn’t be rewarding corporations which are really emitting extra CO2e simply because they’re making hydrogen.
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