The Economist - USA (2021-10-09)

TheEconomistOctober9th 2021 BriefingThehydrogeneconomy 19

The Hydrogen Council, an industry
consortium,reckonssome 350 bigprojects
areunderwaygloballytodevelopclean­
hydrogenproduction,hydrogen­distribu­
tionfacilitiesandindustrialplantswhich
willusehydrogenforprocesseswhichnow
usefossilfuels(seemap).Theywillhave
electricitydemandsinthetensandhun­
dredsofgigawatts,ona parwiththoseof
largecountries,andareslatedtoreceive
$500bnofpublicandprivateinvestment
betweennowand2030.Thatexpenditure
couldendupembarrassinggovernments
andenragingshareholdersiftoday’shigh
expectationsdonotpanout.
Hydrogenhaditsenthusiastslongbe­
foreclimatechangebecameanissue.Its
appeal wasthreefold. It is very energy­
dense:burningakilogramofitprovides
2.6timesmoreenergythanburninga kilo­
gramofnaturalgas.Whenburnedinairit
producesnoneofthesulphatesorcarbon
monoxidethroughwhichfossilfuelsdam­
age air quality both outdoors and in,
thoughitdoesproducesomeoxidesofni­
trogen;whenusedina fuelcell,a device
thatusesthereactionbetweenhydrogen
andoxygentoproduceelectricitywithout
combustion,itproducesnothingbutwa­
ter.Andbecauseit canbemadebyelectrol­
ysis,orfromcoal,itwasheldtofreeits
consumersfromthetyrannyofoilproduc­
ers—an advantage which, after the oil
shocksofthe1970s,accountedforthefirst
seriousspurtofinterestinhydrogenon
thepart ofgovernments, asopposedto
maverickvisionaries.
Thefactthattheenthusiasmdatesback
sofar,though,hasbecomeanenergyin­
dustryjoke:“Hydrogenisthefuelofthefu­
ture—andit alwayswillbe.”Theproblemis
thatthereisnonaturalsourceofhydrogen;
onEarth,mostofitisboundupwithother
moleculeslikethoseoffossilfuels,orbio­
mass,orwater.Thelawsofthermodynam­

icsdictatethatmakinghydrogenfromone

of these precursors will always require

puttingmoreenergyinthanyouwillget

outwhenyouusethehydrogen.That is

whyhydrogenistodayusedforprocesses

wherechemicallyaddinghydrogenatoms

to things isoftheessence,suchas the

manufacture of ammonia for fertilisers

andexplosives.Onlyinverynicheapplica­

tions, such as the highest­performance

rocketmotors,isit burnedasa fuel.

Twopathsyoucangoby

Thereasonthattheoldjokenowlooksset

toloseitspunchlineisthatevenwithlots

ofcleanelectricity—ahugechallengeinit­

self,butalsoasinequanonfordeepdecar­

bonisation—thereareparts oftheecon­

omywhichcurrentlylooklikelytoresist

electrification.WindmillsandTeslasalone

arenotenoughtosavetheworld.

Energypunditshavetakentodescrib­

ingtheemissions­freehydrogenindustry

theyimaginemeetingthesevery­hard­to­

electrifyneedswiththehelpofa conceptu­

alpantonechart.Today’shigh­emissions

hydrogenisknownasgrey,ifmadewith

naturalgas,orblack,if madewithcoal.The

same technologies with added ccs are

knownasblue.Theproductofelectrolys­

ers running off renewable energy is

deemedgreen;thatofelectrolyserswhich

usenuclearpowerispink.Hydrogenpro­

ducedbypyrolysis—simplyheatingmeth­

aneuntil thehydrogen departs, leaving

solidcarbonbehind—isturquoise.

Atpresent,greyhydrogencostsabout$

akilogram—thecostdependslargelyon

thenatural­gasprice.Addcolour,andyou

adda premium.Nooneisyetmakingblue

hydrogenatscale,butwhentheystartdo­

ingsothecostswillprobablybedouble

thoseforthegrey. Greenhydrogen,mean­

while,costsover$5/kgintheWest.InChi­

na,whichtypicallyusesalkalineelectro­

lysers,cheaperbutlesscapablethanthose

preferredintheWest,pricescanbelower.

InJuneAmerica’sDepartmentofEner­

gyunveileda“HydrogenShot”initiative

thataimstoslashthecostofgreen,pink,

turquoise or blue hydrogen by roughly

four­fifthsto$1/kgby2030—adeclinesim­

ilartothoseseeninthesolarpanelandbat­

terybusinesses.It willbenefitfroma num­

beroffollowingwinds.

Thefirst isthecontinuingdeclinein

thecostofrenewableelectricity.Thismat­

tersbecauseelectricitytypicallymakesup

mostofthecostofelectrolysedhydrogen.

Thesecondisthatelectrolysersaregetting

betterandcheaper.

BloomEnergy,anAmericancompany

which first came to prominence inthe

abortivehydrogenboomofthe2000s,re­

centlyunveileda solid­oxideelectrolyser

whichitreckonscouldbe15­45%moreef­

ficientthanrivalproducts,inpartbecause

it operates at a very high temperature.

Technology based on proton­exchange

membranes(pems)isalsogettingbetter.

Thepromiseofbighydrogenprojectshas

alsomadeitplausibletodesignandbuild

muchlargerelectrolysersthanhavebeen

seenbefore,whichbringsdownthecost

perkilogram.

Priceswillfallasa resultofgrowingex­

(^) perience,justastheyhaveinthesolarsec­
Integrated
Heconomy
Hinfrastructure
projects
Large-scale
industrialuse
Fuelling
infrastructure
Gigawatt-scale
production
Source:Hydrogen
Council/McKinsey
Theworldtocome
Announcedlarge-scalehydrogenprojects,bytype,October 2021
The long ramp
Global hydrogen demand forecast, million tonnes of H
Source:GoldmanSachsGlobalInvestmentResearch
1
600
500
400
300
200
100
0
2020 25 30 35 40 45 50
Heating buildings
Industrial feedstock
Industrial energy
Transport (heavy-duty vehicles, long-haul rail, etc.)
Power generation (energy storage, buering)
Base hydrogen demand