Hydrogen is often touted as a green and nearly inexhaustible source of clean energy. The first element of the periodic table burns completely clean, leaving nothing behind but water vapor. This makes it extremely enticing and sellable as a fuel source option for a decarbonized future economy. However, the reality is much more complex and much less green. Hydrogen power is nothing new, and is already used in industrial processes such as ammonia production, in refineries and as a feedstock for chemicals. This hydrogen, however, like most hydrogen currently in production, is created through the use of fossil fuels, primarily coal and natural gas. This hydrogen is known as “grey hydrogen” and is useless when it comes to reducing greenhouse gas emissions.

The fossil-fuel-free production of “green hydrogen” is not only possible, it’s already being produced as well, just not at the same scale or as cheaply as conventional fossil-fuel-produced hydrogen. As Recharge News reports, system costs of green hydrogen are certainly the biggest hurdle for green hydrogen at present, but likely not for long. “Everybody is predicting that the cost curve will come down, just as it has with solar and wind power,” they write. “Though, to get the price point right, you have to reach economies of scale. Then it’s just a matter of when, and industry is primed to take the next step.”

A new study released by the Hydrogen Council, however, doesn’t see the issue with the same rosy glasses and broad rhetorical optimism. The study, called “Path To Hydrogen Competitiveness: A Cost Perspective,” was based on 25,000 data points from 30 companies and their complete hydrogen value chains ranging between the United States, Europe, Japan, South Korea and China, among other major world economies. The study, conducted by McKinsey & Company, found that in order for the hydrogen economy to continue advancing, it will need an injection of investment dollars to the tune of $70 billion by 2030--a pretty quick turnaround for such a considerable amount of money. Promisingly, however, the same report projects the cost of producing and distributing green hydrogen will also fall dramatically within the same timeline, decreasing by as much as half in the next ten years. Related: The “Black Swan” Event That Could Unravel OPEC’s Efforts

“2020 marks the beginning of a new era for energy: as the potential for hydrogen to become part of our global energy system becomes a reality, we can expect fewer emissions and improved security and flexibility,” co-chair of the Hydrogen Council (and chief executive of Air Liquide) Benoît Potier was quoted by Forbes. “A clean energy future with hydrogen is closer than we think because the industry has been working hard on addressing key technology challenges.”

In the meantime, the green hydrogen industry is already moving forward with some interesting innovations. As reported by Recharge, “we're already seeing new pathways emerge in some of the projects we’re working on, including installing 36GW of electrolyser capacity on an artificial island off the Netherlands and injecting hydrogen into high-pressure natural-gas pipelines in Canada.”

Despite these developments and the positive prognosis from McKinsey and the Hydrogen Council, however, there are still some valid concerns about lackluster conversion efficiency, and energy is lost at each step of the process from transforming electricity into green hydrogen. Recharge goes on to say, however, that these worries are overblown and will soon be a problem of the past. “In a system that is going to be increasingly reliant on abundant, low-cost renewable energy,” the report continues, “the efficiency is not the main worry. It’s going to become less of an issue as more renewable energy is generated.”

One of the dirtiest industries in the world, the shipping industry--which if represented as a nation would be the sixth-largest polluter on a global scale--has already turned to hydrogen fuel cells as the answer to their problematic putrescence. In fact, Maersk, the world’s largest shipping company, has already pledged to completely clean up their act and go zero-carbon by 2050. If more key global industries get behind green carbon as their fuel of the future, it will be scaled up even faster than the Council could predict or even hope for.

By Haley Zaremba for Oilprice.com

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