Opinion: Explaining why ‘green hydrogen’ is our best option (perhaps the only one) to achieve net zero carbon by 2050 and halt climate change
Stockholm, Sweden (Project union) âWhile we already have mature technologies capable of replacing fossil fuels in many sectors of our economy, there are areas where eliminating carbon pollution will be much more difficult. Steel, shipping, aviation and trucking, for example, together account for 40% of our global carbon footprint and are on track to consume twice the remaining carbon budget to stay below 1.5 Â° Celsius. Warming.
Fortunately, âgreenâ hydrogen âH2 produced by electrolysis using renewable energies – holds great promise for these sectors. Through various applications, this tiny molecule can provide the heat, reducing properties, fuel, and other services needed to replace fossil fuels.
In fact, given the technical challenge of bringing these âhard to reduceâ sectors to a state of carbon neutrality, achieving the net zero targets for 2050 without it would be virtually impossible.
Benefits of hydrogen
H2 adoption can serve other purposes beyond decarbonization. For example, the ability of hydrogen to replace natural gas in many applications allows for a degree of energy independence and reduced dependence on liquefied natural gas or pipeline imports from Russia.
And while renewables like solar and wind are limited by the extent of power grids, hydrogen can be transported by pipeline or potentially by ship. This means that it could become an exportable renewable energy source, eventually replacing oil as the world’s main energy product.
H2 adoption starts from very different points, depending on the market. In Europe and Southeast Asia, political and trade incentives are already fully aligned for the deployment of H2 Infrastructure. But in large oil and gas exporting economies, the incentives are often conflicting. Notably, there is a significant misalignment in the United States, where natural gas fulfills all the policy priorities that hydrogen can provide for other markets.
As crucial to achieving the 2050 net zero goals, the production, storage and transport of hydrogen represents a multi-trillion dollar opportunity, not only for incumbents but also for investors. While hydrogen is currently more expensive (per unit of energy delivered) than competing options such as fossil fuels, increasing the production of electrolyzers lowers costs. Over the next decade, we can expect H2 to achieve break-even points with fossil fuels in different applications, after which hydrogen uptake will lead to cost savings.
Benefits for rich and developing economies
Green hydrogen is particularly attractive to developing economies. There is a strong geographic overlap between countries and regions with the lowest cost of renewable energy production and those with the lowest GDP per capita. These countries could thus secure a global competitive advantage by becoming producers and exporters of hydrogen. It would also help them attract zero-carbon heavy industry, such as fertilizer manufacturing or hydrogen-based direct reduction steel manufacturing. And, of course, the development of these sectors would lead to significant job creation.
H2 is also attractive to wealthy industrialized countries, which are currently the world leaders in the manufacture of hydrogen electrolyzers. However, if the recent history of the photovoltaic (solar panel) industry is any guide, rich countries may need stronger industrial policies to ensure that production does not migrate to China and other regions.
There is still work to be done before hydrogen can realize its full potential for decarbonization. As it stands, green hydrogen represents a very small part of the existing hydrogen production. Instead, most of the hydrogen is “gray” because it is made from fossil fuels through a steam methane reforming (SMR) process. While it is possible to capture and store some of the associated carbon dioxide emissions to produce slightly cleaner fossil “blue” hydrogen, this option would not be emission free. H2 therefore has a complex CO2 imprint, for now.
In addition, for hydrogen to keep its promises, the decarbonisation of electricity networks must be done in parallel. But as with electric vehicles (EVs), we cannot wait for a 100% clean network to start deploying electrolysers; we have to start now.
An impressive amount of electricity
It’s not as financially risky as it sounds. There will undoubtedly be a threshold where green hydrogen becomes the cheapest source of hydrogen in general. Notably, the recently announced goal by the Department of Energy of reducing the cost of “clean hydrogen” to $ 1 per kilogram is almost impossible to achieve with hydrogen produced by the SMR process at sustainable price levels. for natural gas. This means that US policy is already aligned with green hydrogen.
Nonetheless, using green hydrogen to decarbonize heavy industry will require a truly impressive amount of electricity. Producing the volume of hydrogen needed would almost double the current global electricity production. The only way to meet this demand is to build renewables even faster.
This, in turn, will lead to critical infrastructure design questions, such as whether to prioritize H2 pipelines or power lines. And the growth of this sector will have many regulatory implications. To ensure rapid deployment of hydrogen infrastructure, it will be important to enable monetization, create pricing structures to encourage deferral of capital spending, and provide system-wide planning for all types of development. ‘infrastructure.
Likewise, a change to H2 will accelerate the obsolescence of many fossil fuel-based assets. In order for these large volumes of stranded assets not to produce negative side effects, they will need to be reallocated or assisted in early retirement with various financial incentives.
Stranded fossil fuel assets
One area with great potential for the reallocation of infrastructure is that of gas pipeline networks, which in some cases can be upgraded to allow the transport of hydrogen. Some thermal power plants can also potentially be reused; but, here, the end-to-end efficiency of power-to-hydrogen-to-power is low, so profitable use cases are limited. For the steel industry, the picture is bleaker, as existing blast furnace capacity may need to be replaced by direct reduction. Likewise, the fueling infrastructure for gasoline and diesel will have to be replaced. But the future of such infrastructure is already uncertain, due to the growing battery EV market.
Hydrogen brings enormous opportunities, but also a formidable challenge. Globally, the industry currently only has the capacity to produce about one gigawatt of hydrogen electrolyzers each year, while according to the International Energy Agency’s analysis of the requirements for ‘a trajectory of 1.5 Â° C, the production of green hydrogen will have to be multiplied by 1000 from today. to 2030.
There are actions that can and should be taken to meet this challenge.
First, we need policies to ensure stable demand on a large scale, so that electrolysis manufacturers can switch to industrialized manufacturing. Second, governments must provide grants to cover the initial âgreen premiumâ until the effects of the learning curve take hold. And, finally, we need to resolve the tension between the current asset locations and the locations with the cheapest clean leaf footprint for low-carbon industries.
Supported by direct and indirect political priorities, the hydrogen markets have already grown and passed the point of no return. As such, they quickly bring a cleaner industry and a low-carbon economy within reach.
Thomas Koch Blank is Senior Director of Advanced Technologies at RMI.
This comment was posted with permission from Project Syndicate – The Promise of Green Hydrogen