Is hydrogen worth the hype? | WWF
Is hydrogen worth the hype?

Posted on 17 December 2020

What’s all the buzz about hydrogen? Green hydrogen could harness the power of renewables to solve difficult energy problems, but more development is needed for its potential to be realized, writes Jesse Fahnestock.

I was recently in discussions with someone who has been working for years at the highest levels of the renewable energy sector. I mentioned the exciting developments in hydrogen, and she said, “Yes, that’s where all the buzz is right now. Four years ago, everyone wanted to talk about Blockchain. Now, nobody wants to talk about Blockchain. Everyone wants to talk about hydrogen.”

She’s not wrong. But this time it really might be different. The talk might be justified.

Why? 

Unlike blockchain, hydrogen might help answer several, very large, and very difficult energy problems at once. 

The potential of hydrogen 

Look at any of the trickiest problems when it comes to lowering CO2 emissions – replacing ‘process carbon’ in metals and chemicals production; powering large vehicles on land, sea, and in the air; generating high-temperature zero-carbon heat; storing the energy from renewable electricity for longer periods; and even reducing emissions from agriculture – and hydrogen is arguably the most promising solution on the horizon. 

Hydrogen can be used to reduce iron ore, to make synthetic fuels or refine biofuels, to produce ammonia for the engines of large ships or the production of fertilizer, or burnt directly as a fuel or to produce electricity (process emissions from cement production, unfortunately, remain mostly impervious to hydrogen’s charms). 

Of course, to address the climate crisis, hydrogen has to be green. Hydrogen can already be produced via electrolysis, which uses nothing but (ideally renewable) electricity to split water molecules, generating only hydrogen and oxygen as a ‘waste’ product. But doing so is today several times more expensive than producing hydrogen by stripping it from natural gas, a process that releases large amounts of CO2. 

So at today’s costs making green hydrogen is generally not affordable – and therefore developing the industrial processes, engines, and storage and transport systems to make use of has not been worth it. 

But readers may remember a time – 10 or 15 years ago – when the very same things were being said about generating electricity from the sun and wind, or powering cars using batteries. 

Just as those technologies have become affordable without any major technological breakthrough, so might green hydrogen production. A major scale-up in the manufacturing of electrolysers will likely bring their costs down, and producing hydrogen in ever-larger plants will do the same for the end product. 

Cheap hydrogen will need lots of cheap electricity

The biggest part of the high cost of hydrogen, however, is the cost of the electricity needed to make it. There is simply no way to produce large amounts of green hydrogen without using very large amounts of electricity. Even where electricity is reasonably cheap, the sheer volume of power needed may keep green hydrogen from being affordable. So for tomorrow’s green hydrogen producers, electricity will need to be unusually cheap. 

Luckily, there are times when the electricity from renewable energy is unusually cheap – when an excess of wind or sun leads to more generation than is needed by the electricity grid. Taking advantage of this situation is tricky – if the excess power cannot be exported, some renewable generation actually gets “curtailed” or shut down when this happens.

But some industrial companies have been able to optimize their electricity needs by ramping production in their plants up and down to respond to the supply of electricity, saving money in the process. Tomorrow’s green hydrogen producers may be able to do the same. And since hydrogen can be stored and potentially burnt to generate electricity, these producers could even potentially sell electricity back to the grid when the wind isn’t blowing and the sun isn’t shining.

At this point, such dynamic, grid-integrated green hydrogen production is mostly an idea. To run such an operation at a large enough scale to be economically efficient, and still be able to deliver hydrogen to fuel-making or refining processes when they need it, will be a big challenge. 

A movement begins

Regardless of where the technology is headed, there are many things that need to be done at the same time to advance the prospects of hydrogen as a key solution for the climate and energy transition. In order to begin the scaling up of electrolyser manufacturing and hydrogen production, first movers are needed. These are companies on both the demand and supply side that are willing to invest in green hydrogen’s production and use before the market is fully formed. 

On the policy side, these companies can be encouraged via policies that subsidize green hydrogen in markets where hydrogen is used today. So-called ‘Hydrogen Contracts for Difference’ are a key element in Europe’s hydrogen strategies. 

On the industry side, several coalitions of first movers are already emerging. One area where early action looks promising is in fertilizer, since hydrogen is already required in large quantities to make ammonia, and the global fertilizer company Yara is involved in green hydrogen projects from Australia to Norway. In Sweden, a major public-private partnership to shift the iron and steel sectors from coal to hydrogen is already underway and gaining momentum. And the need to solve the challenge of zero-emission shipping has inspired the development of a ‘First Wave’ blueprint from the Getting to Zero Coalition. The UNFCCC’s Race to Zero recently announced the formation of the Green Hydrogen Catapult Initiative, aiming to scale up green hydrogen production 50-fold in six years.

All of this movement is extremely promising. Risks remain, however. ‘Grey’ hydrogen from natural gas exists today, and first movers may be tempted to make use of the dirtier option. There is some concern, particularly in continental Europe, that it will not be possible to build enough renewable power generation to match hydrogen’s demand. 

This concern is legitimate, and like so much else in the energy transition, it underlines how crucial it is for governments to continue to support renewable energy, economically where necessary but also through long-term system planning, permitting and smart strategies for managing land-use risks and ensuring community benefits from the energy transition. 

The way through these challenges is not entirely clear, and that may be contributing to the buzz around green hydrogen, as many voices try to advance their preferred approach. Nonetheless, the smallest molecule looks like it is going to have a big impact on the energy transition.

Jesse Fahnestock is WWF’s global energy transition lead. 

Learn more about WWF’s work to change energy use. 

 
A Hydrogen filling station in Reykjavík, Iceland.
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