Clean Hydrogen – A Trend Built for the Long Haul
Natalie Houghtalen, ClearPath, May 6, 2021
What’s old is new isn’t just true for fashion (and advanced nuclear reactors, for that matter). Hydrogen is making a ferocious comeback with a twist after going out of style nearly a decade ago. Instead of hydrogen-powered passenger cars, the hydrogen hype of today promises a holistic path for power, industrial, and transportation decarbonization.
The American Petroleum Institute was the latest to join the hydrogen bandwagon, identifying the tiny molecule as a big thrust in its new Climate Action Framework. This is the latest of a long line of recent announcements including General Electric’s new hydrogen strategy for its turbine business, Midrex’s direct reduced iron plant in Ohio, and SoCalGas’ demonstration of hydrogen and natural gas blending.
Why Is This Time Different?
The promise of a hydrogen economy has tantalized scientists for decades: a versatile chemical and fuel with no pollution. A technological solution on the level of fusion energy. What makes this recent trend worth paying attention to? The impacts of climate change are becoming tangible, and there has been a sea change in why clean energy technologies are valued. Hydrogen is a unique molecule that has the ability to cross between traditional energy sectors; it intersects electrical, industrial, and transportation applications. Steel plants are already producing low-carbon steel with hydrogen. Amazon and Walmart already use hydrogen at their warehouses to operate around the clock. Hydrogen is already used by data centers as reliable backup power. There are other technologies that can lower the cost of hydrogen that are also on the cusp of commercialization like very efficient, high-temperature hydrogen production being demonstrated at an Xcel Energy nuclear plant.
Hydrogen Is a Unique Molecule That Has the Ability to Cross Between Traditional Energy Sectors
While many companies are preparing for hydrogen to play a significant role in the energy economy, there are still some significant obstacles in the way. These can be removed by implementing a few simple policy recommendations.
Many Production Methods for the Same Molecule
Take a Technology-neutral Approach to Hydrogen R&D Policy. The media often refers to ‘green,’ ‘blue,’ ‘grey,’ ‘white’ and even ‘pink’ hydrogen to describe different hydrogen production methods, but the hydrogen ‘rainbow’ doesn’t capture nuance. Whether created by renewables, nuclear, or an army of hamsters on wheels, the colorless hydrogen molecule produced is the exact same — the only difference that matters is the carbon emissions produced. Policy needs to focus on the emissions of hydrogen production, not the process of how it is made. There should be support for every clean hydrogen production method to account for energy diversity across the country. The Energy Policy Act of 2005 heavily favored production by renewable energy through electrolysis. Moving forward, the U.S. Department of Energy’s (DOE) research, development, and demonstration efforts should be updated to embrace the full suite of clean hydrogen technologies available and take advantage of the expertise across the Offices of Energy Efficiency and Renewable Energy, Nuclear Energy, and Fossil Energy.
Modernize Codes and Standards. Hydrogen is a highly versatile molecule, but it can be difficult to transport. It can be transported by tanker truck, ship, or pipeline, but most infrastructure in the U.S. was not designed to handle hydrogen or its popular carriers (looking at you, ammonia). Since hydrogen is so small and reactive, hydrogen is more likely than natural gas to escape from pipes and valves, so extra care is needed to transport it. There are several solutions being pursued for hydrogen transport, but as they are developed, these solutions need to be synchronized across the electrical, industrial and transportation sectors.
- Anticipate hydrogen-carriers. It is sometimes easier to move something that contains hydrogen rather than moving the hydrogen itself. These hydrogen-carriers include ammonia and materials that hydrogen is dissolved into. As the DOE considers hydrogen transportation infrastructure and hydrogen utilization, they should anticipate hydrogen-carriers and proactively develop codes and standards in partnership with industry.
- Research hydrogen blending. Natural gas pipelines and natural gas power plants were not designed to work on 100 percent hydrogen, but most are able to use a mix of hydrogen and natural gas. This could be a possibility for reducing carbon emissions in the near term.
- Improve international harmonization. The U.S. should strive to lead in hydrogen technologies manufacturing and export those clean technologies to other developing countries. Exporting these U.S.-made technologies would be simpler if they are compatible with the infrastructure that already exists in other countries. That is why as these codes and standards are developed, there should be communication and harmonization with other countries looking to adopt these technologies.
Support Early Movers. We are still in the early days of the hydrogen economy and the ‘chicken or the egg’ problem is real. Today, there are only a few dozen hydrogen fueling stations that exist in the country. High reward, deep decarbonization projects like cleaning up steel, grid scale energy storage, or hydrogen for grid scale power have high financial risk.
- Create regional roadmaps & clusters to address infrastructure. In many cases, hydrogen demand, production, and infrastructure have to be developed simultaneously. Industrial users need a large steady supply of hydrogen, but hydrogen production companies don’t want to build without a secure end user. Additionally, hydrogen distribution, storage, and delivery infrastructure is essential to these activities and connecting the supplier to the end user needs to be permitted and built. Creating regional roadmaps for hydrogen infrastructure development can help derisk early adoption by informing industry actions. The DOE has faced this first mover problem before with carbon sequestration, but the successful CarbonSAFE program, a program that works with industry to create regional clusters to transition infrastructure in a responsible and predictable way, could be a model for hydrogen.
A Roadmap for Simultaneous Development of Production, Demand, and Infrastructure
- Allow access to low-cost financing. The hydrogen technologies covered by the Loan Program Office (LPO), which supplies low-cost financing to innovative energy technologies, should be expanded to include technologies from across the hydrogen value chain that are applicable to multiple end use sectors. Currently, LPO only offers loans for hydrogen fuel cell technologies. The cost of development is higher for early movers, but successful deployment of emerging technologies is an important step down the path of full commercialization.
- Demonstrate first-of-a-kind and early-stage technologies. These deep decarbonization projects are on the verge of making significant changes but need an extra push to get across the “valley of death” — the space between R&D and full commercialization. Public-private partnerships are necessary to prove these technologies work at scale and can be deployed everywhere.
We’re still in the early days of developing the hydrogen ecosystem. This makes the federal government’s role to establish the rules of the road (or to help pave the road) and to seed critical R&D activities that can pay dividends in the future critically important.