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With each passing week, another company joins the race to commercialise hydrogen as an energy source. With no “tailpipe” emissions of greenhouse gases, the fuel could play a significant part in the energy transition – provided it’s produced in a low-carbon way.
At present, the vast majority of the world’s hydrogen is made from fossil fuels, largely through the steam reforming of methane gas, which results in what is known as “grey” hydrogen. The process produces carbon dioxide, meaning it isn’t suitable for making hydrogen as the world economy moves towards carbon neutrality. This is why interest in “blue” hydrogen (in which the carbon is captured and stored) and “green” hydrogen (in which the production process is powered by renewables) is growing. However, less than 1% of the world’s hydrogen supply can currently be deemed green.
Brazil plant
In the past 12 months, several companies have claimed to be developing the world’s largest production facility for green hydrogen. First, the Australian firm Enegix Energy announced that it had reached an agreement with the Brazilian state of Ceará to construct a $5.4bn green hydrogen plant. The facility will use 3.4GW of wind and solar energy to make up to 600,000 tonnes a year of the fuel when operation begins around 2025.
Three years later, construction is scheduled to start on an even larger plant in Oman – the combined effort of a consortium that includes renewable hydrogen developer InterContinental Energy, investment firm EnerTech and government-owned oil company OQ. It’s going to take a decade for the project to reach its maximum output: a projected 1.8 million tonnes of green hydrogen a year, made using wind and solar energy.
Engineers have long recognised hydrogen’s potential as an energy carrier. In fact, the first-ever internal combustion engine – designed in 1806 by Swiss inventor François Isaac de Rivaz – was powered by a hydrogen/oxygen mixture. But the fuel would quickly be replaced by cheap and abundant oil. The issue of cost is what holds back green hydrogen in the present day, although some analysts believe that costs will begin to fall rapidly as renewables become ubiquitous. It would seem that a key inflection point is approaching – although it’s still down to policymakers to pick green over blue.
According to analysis from the research group BloombergNEF, green hydrogen will be cheaper than its blue counterpart in all major markets by 2030. Even the grey variety – presently the least costly – could be more expensive by 2030 in 16 of 28 countries that the group modelled. Other factors influencing the cost of green hydrogen include the cost of electrolysers (the machines used to break water down into hydrogen and oxygen), as well as the cost of capital needed to finance projects.
Blue v green
Following the August release of its hydrogen strategy, the UK government was criticised by environmental groups for its perceived over-reliance on blue hydrogen. The country is aiming to set up 5GW of low-carbon hydrogen production by 2030 to replace natural gas in homes, as well as in sections of transport and industry. The government has said it will take a twin-track approach – manufacturing both the green and blue versions of the fuel. But, if it commits too significantly to blue hydrogen, it could ultimately place its climate goals out of reach.
Research in the US by universities Cornell and Stanford found that using blue hydrogen could actually be 20% worse for the environment than using natural gas in homes and industry because of the emissions that can escape in the production process.
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