$64 Million For Renewable Hydrogen, Not Natural Gas

February 1st, 2020 by Tina Casey

Just a few years ago, a chorus of hee-haws would be expected to erupt whenever the topic turned to the hydrogen economy of the sparkling green future. Well, money talks. The US Department of Energy has been plowing research dollars into hydrogen and fuel cell technology, and the latest development is all about leveraging wind and solar energy to bring the cost of renewable hydrogen down, down, down.

Bringing The Cost Of Renewable Hydrogen Down

The primary source of hydrogen today is natural gas, and the market is huge. The US produces 10 million tons of hydrogen annually under the current scheme of things. New applications — including transportation and energy storage among others — could bump up demand even more in the coming years.

With that in mind, check out the Energy Department’s new $64 million round of funding for projects related to the H2@Scale initiative of the Fuel Cell Technologies Office.

The funding is devoted to a soup-to-nuts effort to reduce the cost of hydrogen all through the supply chain. It also involves shifting the hydrogen field out of its near-total dependence on natural gas.

“While much of the hydrogen used in the United States today comes from low‐cost natural gas, adding other production sources can make industries more resilient to potential price volatility,” explains FCTO.

Gas Stakeholders, Beware

That statement may sound somewhat mild, but it amounts to a stab in the heart of the US fossil gas industry.

Gas stakeholders are already reeling under threat from the building electrification movement along with signs that their grip on the power generation sector is loosening. The ground is beginning to shake under the market for fossil-sourced plastics and other chemicals as well.

With that in mind, the new round of funding puts a priority on slashing the cost of electrolyzers, the devices that deploy an electrical current to “split” hydrogen from water.

The use of water as a source doesn’t necessarily lead to renewable hydrogen. Electrolyzers are source neutral, so the electricity could come from fossil fuels or nuclear energy.

Now that the cost of renewable energy has fallen off a cliff, FCTO gives the edge to wind and solar over other fuels — but only if the cost of electrolyzers can also come down.

How Low Can Renewable Hydrogen Go?

The way FCTO sees it, electrolyzer manufacturers could learn a thing or two from fuel cell manufacturers about cutting costs.

The strategy for the new round of funding involves building economies of scale into the electrolyzer supply chain, and adopting some of the the high volume, high throughput techniques used for making fuel calls.

Integrating fuel cell technology, standardizing systems and components, and reducing the complexity of membrane-based electrolyzers can also contribute to the cost-cutting effort.

So, how low can hydrogen go? FCTO is not shy about waving its track record on that score. They take credit for supporting R&D programs that have already reduced the cost of electrolyzers by 80% since 2002.

There is still a long row to hoe. The electrolyzers of today are low-volume (less than 5-megawatt) devices that can cost more than $1000 per kilowatt.

In contrast, FCTO is envisioning a scenario in which the cost of large-scale electrolyzers drops down to the range of $400/kW or less, making it possible to achieve a target cost for hydrogen of less than $2.00 per kilogram.

Renewable Energy Hearts Renewable Hydrogen

That target cost of $2.00 per kilogram dovetails neatly with the renewable energy revolution, and FCTO makes a point of explaining that wind and solar are the engines driving low-cost, renewable hydrogen:

“A recent analysis using DOE’s H2A model16 shows that H2 production costs of <$2/kg can potentially be achieved at electricity prices of 3¢/kWh (which is becoming increasingly common with wind and solar installations), when the electrolyzer system capital cost is less than $400/kW.”

Now, combine the impact of low-cost wind and solar with manufacturing efficiencies and system improvements, and the renewable hydrogen picture comes into sharper focus (emphasis added):

“Manufacturing cost analysis supports the concept that these capital costs can be achieved by increasing manufacturing volumes. For example, one study, which assumes technological advances beyond current commercial electrolyzers, shows that increasing the annual production volume from 10 MW to 1,000 MW could potentially decrease PEM electrolyzer system costs down to ~$250/kW.“

In support of that effort, a $15 million chunk of the new round of funding will go to electrolyzer projects that involve improving fabrication techniques and reducing system complexity, with an eye toward cutting follow-on costs for service and maintenance.

The Wind, Solar, Hydrogen Question

So, why not simply use the electricity from wind and solar farms to charge batteries and do whatever?

That’s fine as far as it goes, but transmission lines and other bottlenecks are already stymieing growth in the wind and solar sectors. Renewable hydrogen provides additional opportunities to deploy energy storage and existing infrastructure — namely, roads and pipelines — to put more renewable energy in the hands of energy consumers.

“The overall vision of H2@Scale recognizes hydrogen’s versatility as a flexible energy carrier,” the offices explains. “H2@Scale enables—rather than competes with—energy pathways across many industrial sectors. Hydrogen can be produced from a variety of domestic sources and used in numerous industrial and consumer applications.”

In another development along those lines, last fall several midwestern states launched a new consortium in support of hydrogen. That’s a significant move, considering that so far the regional collaborations have been clustered on the east and west coasts. CleanTechnica is reaching out to the new consortium for its insights on the renewable angle, so stay tuned.

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Photo: US Department of Energy, Fuel Cell Technologies Office.









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