Hydrogen could be the next big energy source

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On February 3, 2022, the Japanese energy agency NEDO decided to organize a webinar on hydrogen and the prospect of fuel cells in Japan. It was one of the first attempts by a country to publicly discuss the future importance of hydrogen in the world. This topic could play an important role even at Expo 2025 in Osaka. The theme of the Expo is “Designing the future society for our lives”. It will be held from April 13 to October 13, 2025.

While the discussions are generally calm and the ideas exchanged rather calmly, a fierce hydrogen rivalry is emerging around the world, especially in India. But more on that later.

Basics

Hydrogen is the simplest element. As the EIA says, “Each hydrogen atom has only one proton. Hydrogen is also the most abundant element in the universe. Stars such as the sun are mostly made of hydrogen. The sun is basically a giant ball of hydrogen and helium gas.

It is respected for offering the highest energy content of any common fuel by weight. It contains three times more energy than gasoline, explains the IEA, but it has the lowest energy content by volume (about four times less than gasoline). But when compressed and liquefied, it becomes heavier and can release immense amounts of energy. This also explains why almost all rocket fuels use compressed hydrogen.

It was first produced artificially in the early 16th century by the reaction of acids with metals. During the latter part of the 18and century, Henry Cavendish discovered that it produces water when burned. This in turn gave him the name based on the Greek word meaning “ancient of water”. The symbol for hydrogen is H, for is water H2O, and for ammonia it is NH3. It is used by refineries, steel mills, fertilizer plants and even power plants.

Screenings

It was important enough that it was brought up as a topic at COP23 in Bonn – in November 2017 – where 18 key leaders in their verticals united in the Hydrogen Council coalition. They launched the first-ever globally quantified view of the role of hydrogen, developed with support from McKinsey. Deliberations showed that in addition to being a key solution to global warming, it had the potential to grow $2.5 billion in business and create more than 30 million jobs by 2050.

But five years later, in 2022, the deadlines seem to have been shortened. Immediately after the COP23 meetings, Japan was one of the first nations to set a timetable. In December 2017, Japan’s former Prime Minister Shinzo Abe pushed for a “basic hydrogen strategy”. At that time, the 2050 vision was to position hydrogen as a new energy option alongside other renewable energies. It has also set itself the goal of making this gas affordable at $3/kg by 2030 and then at 2/kg by 2050.

But planners hadn’t anticipated that solar costs would continue to fall, as would battery costs. Conventionally, hydrogen is created either by reforming methane or hydrocarbons, or by electrolysis. The former allows carbon to be generated, so it’s not the best solution for reducing emissions. The latter was too expensive. But with solar costs falling even now, making it cheaper than thermal power, using solar power for electrolysis might become the likeliest route. Another route could be wind or wave energy. The latter has the potential to become immensely popular. Hydrogen is mainly used in refineries, explosives, fertilizers and rockets.

Adani, Ambani and others

But now large facilities are being created for large-scale hydrogen production. In November 2021, Gautam Adani, speaking at the Bloomberg India Economic Forum, said his group would invest $70 billion over the next decade to become “the world’s largest renewable energy producer”. energy company and produce the cheapest hydrogen on the planet.

Not to be outdone, in mid-January 2022, Reliance Industries, headed by Mukesh Ambani, announced that it will invest INR 5 lakh crore ($67.6 billion) over 10-15 years to set up a renewable energy of 100 GW. power plant and green hydrogen ecosystem. It would also invest additional sums in related projects, which would increase investment in renewable energy to $75 billion. Reliance also said it would lower the price of hydrogen to less than $1 per kg. This would be less than the projection of 2 dollars per kg by 2050 envisioned by Japan.

Around the same time, POSCO – the South Korean steel giant – announced that it had signed a tripartite memorandum of understanding on January 18 to strengthen collaboration on the green hydrogen project during the Forum d Saudi Arabia-Korea Investment for Smart Innovation and Growth. The event took place at the Ritz-Carlton Hotel in Riyadh, Saudi Arabia, in the presence of President Moon Jae-in. He said an economically ideal business site will be selected and a feasibility review of the project will be completed during this year.

“Saudi Arabia, which can produce new and renewable energy at the lowest prices in the world, is an important region for POSCO, which plans to produce large quantities of hydrogen,” said Byeong-og Yoo, responsible for the industrial gases and hydrogen activity. Unit to POSCO. “We will succeed in establishing a hydrogen production model in Saudi Arabia and quickly take the lead in the hydrogen industry,” he added, expressing his hopes for the project.

Meanwhile, POSCO is promoting hydrogen projects with the vision of jumping into the ranks of the world’s top 10 hydrogen production players by producing a total of 7 million tons of hydrogen in 2050. In the medium term, POSCO will invest KRW 10 trillion ($8.3 billion) to establish a 500,000 ton hydrogen production system by 2030. To this end, it is stimulating the internalization of core technologies needed to establish a chain of global hydrogen supply and ensure a competitive advantage in the 7 main strategic countries.

New numbers

Suddenly, big corporations are talking about producing the cheapest hydrogen in the world and putting in place capacities that no one considered in 2017. Expect the share of hydrogen in electricity production to skyrockets. No estimate is currently available. Even the IEA website has nothing to say about these developments as of this writing.

BloombergNEF also states that hydrogen demand could skyrocket immensely. It indicated this in its July 2021 report (see graph) but had (obviously) not taken into account the capabilities we talked about above.

However, in its January 2022 report, it said the number of countries with a hydrogen strategy had doubled in the past year to 26, and the plans expected from the United States, Brazil, India and of China could reshape the global market.

Little is known about China’s plans. However, according to Japanese NEDO sources, China has agreed to share its hydrogen plans soon. This should be interesting because China is the biggest player in solar energy and is itself a big consumer of hydrogen (especially for its steel and fertilizer units). In addition, it wishes to reduce its dependence on hydrocarbons for strategic and environmental concerns.

Clearly, therefore, one would expect hydrogen to play a larger role than the previously estimated 18%.

New prices

Clearly, reaching a price of $1 will require a dramatic drop in the cost of electrolyzers, the equipment needed to make green hydrogen, according to Debasish Mishra, a Mumbai-based partner at Deloitte Touche Tohmatsu. But if you look back and think about the plummeting costs of solar panels when China stepped in, and the plummeting costs of batteries and electricity storage, such price drops don’t are not impossible.

Eiji Ohira, spokesperson for the Japan New Energy and Technology Development Organization, or NEDO, adds: “I recognize that large-scale hydrogen projects are about to start around the world. Japan is also considering various international cooperation projects. I guess you will be able to see it soon.

That’s why Expo 2025 in Japan will arouse great interest. After all, its theme calls on each individual “to reflect on their own ambitious life, to empower them to realize their full potential, and to move the world forward.” effort to create a shared vision of a sustainable society.

As for India, the race to become the largest producer of hydrogen will be closely watched. But as of now, Gautam Adani seems to have the advantage.

According to Mercom India, regarding solar power installations (not paper plans), “Reliance currently has 146 MW of solar projects in operation and Adani has 5,250 MW.” Solar is essential if hydrogen production costs are to be brought down to $1. Another factor will be access to shorelines. Adani has ports and coastal power stations. This creates hydrogen by breaking down seawater into hydrogen and oxygen and capturing the former. However, both groups have immense access to technology and can be innovative.

And it’s worth remembering that of all the countries in the world, Japan has an advantage in fuel cell technologies, given that Toyota has been using hydrogen-powered Mirai cars for nearly a decade. The Mirai was unveiled in November 2014 at the Los Angeles Auto Show. As of December 2019, global sales totaled 10,250 Mirais. This author drove a Mirai in Tokyo and saw the hydrogen filling stations in operation.

In 2018, the top-selling markets were the United States with 6,200 units, Japan with 3,500 and Europe with 640. As of December 2021, sales in the United States and Canada totaled 9,263 and 221 units, respectively. . Markets have not grown as quickly as expected, mainly because costs are high. Each Mirai costs around $50,000, although Japan plans to subsidize the commercialization of fuel cell vehicles (FCVs) by around 2 million yen (~$19,600).

Today, Japan has FCV technologies for forklifts, hydrogen fueling stations and hydrogen trains.

Also, with the cost of hydrogen and fuel cells falling, expect this technology to compete with electric vehicles.

Expect a lot of churn in the market very soon.

The author is a consulting editor at the FPJ

Posted: Monday, February 07, 2022, 11:29 a.m. IST

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