Green hydrogen has been the talk of the town in 2021, although the proof of concept for large-scale, commercially viable projects has yet to come through. Even if they eventually prove feasible, hydrogen’s widespread adoption is still a long way off. Much like 3D printing, which was invented in the early 1980s and is only now coming into full bloom, hydrogen has been around for decades – the first scientific reference to hydrogen fuel cells dates from 1838! – and will likely need several more decades and a lot of brainpower, technology and money to get to the point of revolutionising our world.
Hydrogen’s main perk is straightforward. It would allow us to decouple energy production and energy usage in a temporal as well as geographic sense. In an age of renewables, this can indeed be a game-changer. Take solar, wind or hydro-electric, and it becomes apparent that renewables are highly location-bound and weather-dependent, producing an excess of energy often when there is no corresponding demand. Storing and transporting renewable energy in the form of electricity is difficult and often inefficient. By allowing us to convert green power into liquid energy carriers, hydrogen is offering a pathway to solving this problem – one which is often referred to as power-to-x, in public discourse.
That is not to say that the vision of a hydrogen-based economy is easy or by any means around the corner. Hydrogen is highly flammable and can, combined with oxygen, be highly explosive. As a medium, it is corrosive in the sense that it embrittles metal, and its most practical application as synthetic fuel requires a number of highly complex production stages. Plus, it is not competitive at the moment compared with other energy alternatives. Nonetheless it allows for the decoupling of renewable energy production and usage, which arguably is one of the key ingredients to make the departure from fossil fuels a realistic possibility.
So far, hydrogen has been on the margin of the debate around the future of mobility, with just a handful of hydrogen models available on the market. That debate has lacked nuance, however. Smaller inner-city cars will firmly be the prerogative of battery-powered vehicles no matter what. On the other hand, heavy-load and long-range vehicles will probably opt for hydrogen-powered fuel cell electric vehicles. The size, weight and cost of batteries needed to power long-distance trucks or coaches far outweighs the economically viable. International shipping – be that big container vessels or cruise ships (both having a significantly worse environmental impact than tens of millions of cars) – is an ideal application for hydrogen too, as well as aviation.
Another topic that requires more nuance is the question of hydrogen’s impact on the fortunes of entire nations. Hydrogen has indeed the potential to cause major geopolitical ruptures. Countries increasingly have the ability to become consumers and producers at the same time, while breaking loose from oil and gas along the way. New players with abundant renewable energy resources such as Morocco or Chile are already betting on hydrogen. But big oil and gas producers of the likes of Saudi Arabia and Russia also happen to have great renewable energy potential – solar the former, offshore wind the latter – and also boast great know-how of gasification processes built into their hydrocarbon industries. No wonder then that Saudi Arabia is among the most ambitious countries in terms of strategic planning of a hydrogen-based economy and is rapidly building electrolysis capabilities, much as Russia is actively exploring hydrogen technologies.
The cost of hydrogen is still significantly above current conventional fuels, but there is the expectation that costs can be brought down to significantly less than 50% of current levels. Depending on the type of hydrogen and one’s location, predictions put cost parity at some point between 2030 and 2050. Less interesting than predictions about a point in time is the route to achieving affordability. This could be through advances in electrolyser technology or the development of alternative production methods, but most crucially through cost effects in the production of renewable electricity. If there is one key driver for the success or failure of hydrogen, it is renewable energy production – not least owing to the vast increase in electricity consumption on account of e-mobility, as well as the predicted 500GW of additional demand for hydrogen production.
While hydrogen currently enjoys an enormous momentum in public discourse (critics would call this a hype), there are still significant hurdles to overcome. The most important is the economic viability of hydrogen-based products. Second, paradigm shifts which result in the creation of entirely new industries constitute a disproportionate investment risk for first movers. In order to develop hydrogen technologies quickly enough, to meaningfully support the drive to decarbonise mobility, and to maximise the economic potential of the underlying technologies, nation states will need to support the investment in hydrogen network and storage infrastructure and commercially high-risk basic research with research grants and public facilities. It is time to add substance to the hype.
Martin Kaspar is head of business development at a German mittelstand company in the automotive industry.