There is clear that Hydrogen will play a big role in the Energy scene, and there are good reasons to be in that way. Hydrogen is mostly available, if it used as fuel for thermal machines does not produce Green House Gases emissions (GHGs) and most importantly, can re-shape the form of the current energy geopolitical picture. So let’s take a look.
In terms of availability, most of the world is talking about Green Hydrogen (the one produced by Electrolyzers splitting H2O while feed by Renewable Energy) because could be the most promising new energy vector of the last 100 years. Then we have some alternatives like the Blue Hydrogen (the one produced by splitting the CH4 aka Methane Gas but capturing or using the CO2 produced, otherwise will be the old knew Grey brother). Some variations are popping up like yellow or violet depending on the specific source of renewable energy, but the main difference lies in the environmental impact, meaning, if the production of Hydrogen reduce or not the CO2 emissions. On that subject, some of the most promising discussion in Europe these days gravitate around the different kind of Hydrogen, how are they produced and the associated emissions. And make sense, as any other form of energy, it is evolving and creating its own taxonomy and definitions, its own validation and certifications processes, and maybe wanted or not, its own taxation category.
In terms of energy independency and geopolitical rearrangements, the topic worth a paragraph, because we consider it is important and not touched so often. Today’s Energy world is basically divided between the Countries that have and can produce energy (Crude Oil, Coal, Gas and LNG, Renewable Energy) and the ones that mostly import different forms of energy. The wider adoption of renewable energy and all the incentives that mostly Europe was delivering during the past 20 years kind of laid the foundations to this geopolitical realignment, but renewable energy alone is not enough due the intrinsic characteristics of its roots (unavailability, intermittence, higher costs, availability of resources, etc). Now with the Hydrogen, some countries are looking at the independency 2.0, because in a nutshell, if you have or can produce cheap renewable energy, and you also have access to water, you have the potential to produce Green Hydrogen in some point of the near future, and replace LNG imports by in-country Green H2. These make sense for most of the LNG importer countries (like Japan, Germany, Italy, Spain, and many others) because the price of the gas (in USD/MMBTU) it is quite much higher that the gas that producer countries (like USA, Qatar, Australia, Peru, etc) use internally.
So the advantages of having Hydrogen as energy vector are clear, availability, clean energy, no GHGs emissions, and this is one of the most important drivers that are generating so much talks about the topic, meetings, legislation, events, and so on. But, in order to be fare, we also need to consider the challenges of an Hydrogen based future, because will impact each player of the value chain in a different way.
Blue Hydrogen on the way
First of all, we must address the fact that methane producers and LNG exporters will take the long hunting fruit, that means covering the first demand of Hydrogen with blue one, produce by splitting the same molecules that they export today in form of LNG, but keeping the Carbon at home. This is attractive for gas producers like Australia, Qatar and USA, but there are still some bottle necks in terms of the Capture of the CO2 (or CCUS solutions). This is because capturing the CO2 and storing it in underground reservoirs it is something proven but there are not enough available and safe reservoirs to make it happen, and therefore just few projects will actually do blue hydrogen by combining CH4 splitting (like Steam Methane Reforming or SMR and CCS technologies). Then, new technologies are almost at TRL 9 ro similar in order to use the Carbon separated from the Hydrogen instead of store it, what is known as CCU, but there is still a big gap on that area, and more technologies must need to be developed in order to make CCU really trendy and spread. Still, in the near 10-20 years, Blue Hydrogen will play a critical role in the decarbonization of the world.
The new line-up of the Technology Companies
There are some Original Equipment Manufacturers (aka OEMs) that has a pretty descent line-up for a decarbonization path, including some solutions related to Hydrogen. Some of these front runners are Siemens, General Electric, Baker Hughes, Holder Topsoe, MAN Energy Solutions and few other big names. Still, most of the solutions are conditioned to several boundary situations, and not applicable widely. Most of the solutions came from the utilization of Hydrogen as fuel in thermal machines like Gas Turbines and Engines and this is a big step forward, still is not clear how the hydrogen will feed all these machines. Some other OEMs, MAN and Siemens included, are betting on Electrolyzers (mostly PEM) and this also make a lot of sense as this simple equipment will take the hotspot of any scene very quickly. There is an issue with Electrolyzers, as most of the current producers are using mature (and must said also proven to be fare) that does not fulfill current needs in terms of production rates and efficiency. There is also a big issue with the power electronics and grid interconnection of such electrolyzers hat were never designed or even manufacturer to attend needs in the Gigawatts legue. Other frontier technologies like Solid Oxide Fuel Cells (SOFCs) used as Electrolyzers and Plasma Catalyzers are in an incipient stage of development and looking very promising, still to reach (expect for very few cases like Bloom Energy) TRL 9 will need 5-10 years and hundreds of millions to sit at the adult table. This also apply to mobility, as some big names like BMW and Toyota are playing hard on Hydrogen for mobility.
The Energy Energy Companies, reshaping their future or just greenwashing?
Most of the top energy producers in the world are betting on renewable energy, energy transition and decarbonization. This include major public companies like Shell, Equinor, ENI, Repsol and the recently joined Chevron. But renewable energy is not the paradise, as these big corporations realized that a greener world might mean less profit, and therefore can only happen with the endorsement of the stakeholders. Notwithstanding, this change is happening, and shareholders or at least a portion of them, are putting pressure over these public companies to make a change for real, and carry on the actions that are advertised in the shareholders meetings, in order to avoid greenwashing and fooled ESGs. Still, and here are plenty fo proof of this, profit still rules, and the CEOs of these companies are facing the horns of a dilemma. The time will dictate, but everything indicates that greener solutions, less GHGs emissions and a solid carbon neutral future arise in the horizon and they know it.
One clear sign of these changes are all the activities and most importably investments, that these Energy Companies are doing though their Corporate Venture Capitals (CVCs) their high tech open innovation arm. It pretty common to see some of these CVCs co-investing in promising Startups around the world together with traditional Venture Capitals (VCs) in order to speed up and shorten the path to these TRLs. And this is great we must said!
What about the transportation?
This is a big big question mark! We touched briefly and superficially the production side as well as the technology side (we should and can go much much deeper in any single topic) but one of the biggest concerns is the transport of Hydrogen. So let’s start from the easiest way, that will be a blend between Natural Gas and Hydrogen, preferably Blue or Green. This means injecting up to 9% of H2 in the current Natural Gas pipelines, in order to reduce in a similar amount the emissions of such current Natural Gas burned. You might wonder why 9%? This is because most of the steel used in traditional Natural Gas pipelines has a limit around 9% in order to avoid that Hydrogen molecules produce hydrides that embrittles the metallographic structures and can produce cracks and blasts. There are different solutions under study, like inner cover these old pipelines with isolating materials, or installing dedicated Hydrogen pipelines, or transfer the Hydrogen in other sub products to facilitate the handling and transportation. In this subject, the main discussion these days its around methanol and other synthetic fuels versus green ammonia. We understand that will be enough space for everyone and there is no need of a clear winner between these groups of sub-products, but as should be, some players are already taking positions. Green ammonia has several advantages, as it is relatively cheap to produce, can be easily transported, can be used as fertilizer and fuel for sea vessels, and many other advantages. Methanol and synthetic fuels in the other hand can cover a more close to earth uses and could be easier for current society to adopt. Then we still have some Startups and Corporations working in new materials to adsorb and absorb Hydrogen to facilitate its transportation, will see.
Then how this Hydrogen future looks like?
Well, we might say complex but doable. Of course will take several decades, such tectonic shift is not something that happens overnight. Most big players like technology companies, equipment suppliers, energy corporations, Governments and consumers are looking into and putting everything together to make it happen. Still, our recommendation is to think about it, evaluate options alternatives and scenarios, and execute according the best options today.