Hydrogen as a store of energy has been explored for a long time. Given its abundance (in the form of water), and given its potential to be a clean source of power (the only by-product of the hydrogen-oxygen reaction for power generation is pure water), hydrogen presents significant potential as a clean source of energy.
Until 2020, there were insignificant capacities of hydrogen power plants worldwide. But estimates suggest that these could be as high as 25 GW by 2025 and much higher by 2030. Global capacity of electrolysers, which are needed to produce hydrogen from electricity, doubled over the last five years to reach just over 300 MW by mid-2021.
Around 350 projects currently under development could bring global capacity. up to 54 GW by 2030. Another 40 projects accounting for more than 35 GW of capacity are in early stages of development. If all those projects are realised, global hydrogen supply from electrolysers could reach more than 8 million tons by 2030. While significant, this is still well below the 80 Mt required by that timeline in the pathway to net zero CO2 emissions by 2050 set out in the IEA Roadmap for the Global Energy Sector. A net-zero world would need 306 million tonnes of green hydrogen per year by 2050, almost four times the current total hydrogen production from fossil sources.
There are two key aspects in the green hydrogen value chain that need significant innovation and evolution. One is the cost of electrolyzers and the other is the cost of green electricity needed for electrolysis. The cost of electrolyzers could decrease owing to economies of scale in their production and the costs of green power (solar or wind power, to a large extent) have already decreased significantly in the last decade and has potential for further reduction.
It is expected that new and cheaper materials will significantly reduce electrolyser costs - for instance, research suggests that the overall capital cost of PEM electrolyser equipment per kilowatt (kW), currently between $800 and $1,400, could fall to about $200/kW by 2050.
Green hydrogen production costs have fallen by 40% since 2015 and are expected to fall by a further 40% through 2025. Green hydrogen produced with renewable resources costs between about $3/kg and $6.55/kg. Fossil-based hydrogen costs about $1.80/kg. Recent analysis suggests $2/kg is a potential tipping point that will make green hydrogen and its derivative fuels competitive multiple sectors
Hydrogen, owing to its versatility to be used as a fuel for power generation on its own, or as a feedstock for chemicals and liquid transport fuels, presents a very high potential to result in dramatic decarbonization of the global economy over the next 50-75 years.
Almost any country can benefit from the hydrogen economy, as all that are needed for green hydrogen production are water and renewable electricity.
Hydrogen is a versatile fuel with high calorific value. Liquified hydrogen could even be used to power aircraft, something that batteries find very challenging owing to their low energy densities. Hydrogen is also a feedstock with a significant potential to propel the Power2X economy.
The main challenges with green hydrogen are its high cost (currently almost three times that of fossil generated hydrogen) and also the lack of infrastructure for logistics (storing and distribution) and end use equipment (engines, heating equipment and power generation equipment).
Hydrogen demand stood at 90 million tons in 2020, practically all for petroleum refining and fertilizer production. Produced by the conventional SMR process, this alone releases about 800 million tons of CO2. If even 10% of hydrogen production just for the current applications come from zero carbon sources, that alone has an abatement potential of 80 million tons.
But the real decarbonization potential of green hydrogen is in the emerging applications of hydrogen.
If green hydrogen were further used to decarbonize hard-to-decarbonize sectors such as steel and cement (which together release 5 billion tons of CO2 per year), and if it were further used to produce chemicals and fuels through the power-to-X construct, its decarbonization potential increases multifold.
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