Hydrogen – A Sustainable Frontier in Energy

The energy industry is becoming sustainable, with hydrogen gaining traction in global net-zero emissions goals. This blog explores the recent surge of interest and substantial investments in hydrogen, signaling its potential to revolutionize the energy industry.

While using hydrogen for energy production is not new, it has recently become an emerging part of the global net-zero emissions goal, gaining heavy traction in the energy industry. Hydrogen, the most abundant element on earth, is recognized as a clean and versatile energy carrier, offering a promising alternative to traditional fuels. However, hydrogen rarely exists in its pure form in nature, meaning an energy input is required to produce pure hydrogen. There are many ways to produce hydrogen, with steam-methane reforming, electrolysis (water splitting), and fuel cells being the most common. Each of these methods requires an energy input, electricity, and/or fossil fuels to create a reaction that results in pure hydrogen as a byproduct (among others). For example, currently, 95% of current hydrogen production comes from steam-methane reformation (grey hydrogen), in which high-temperature steam (H20), methane (CH4), and a catalyst react to produce hydrogen (H2), carbon monoxide (CO), and a small amount of carbon dioxide (CO2). Because this requires a fossil fuel input, it is not considered 100% clean (green hydrogen).

Significant capital investments and incentives for hydrogen are provided through various programs to improve the economics of H2 production and make it a more viable clean energy resource. In the US, the Inflation Reduction Act provides a tax credit per kg of H2 produced and over $300 billion in loan authority to the Department of Energy to finance clean energy projects like hydrogen production. The Bipartisan Infrastructure Law allocates $1.5 billion to reduce the cost of pure hydrogen through research and development in electrolysis technologies. The Regional Clean Hydrogen Hubs program provides $7 billion to support the creation of clean hydrogen networks across the country, which is expected to draw an additional $40 billion in private investments.

Hydrogen’s application in heavy transportation, agriculture, and the production of chemicals, steel, iron, and cement make it a key player. Additionally, its potential role in grid reliability through energy sources (wind and solar) is the intermittent nature of production. This can often result in overproduction and curtailment of these sources. If production exceeds demand, these sources may be “curtailed” or effectively turned off when they could be producing energy at a marginal cost. This where hydrogen storage can play a role. Energy producers can continue to produce electricity during high production and low demand periods. While some challenges with storing hydrogen need to be addressed to make it more viable, this could help improve the efficiency of renewable energy on our grids.

Today, clean hydrogen production costs exceed the cost of fossil fuels. Still, with significant investments pouring into the industry, the cost of production in some countries is projected to fall 50% or more by 2030 and continue to fall steadily through 2050, according to estimates. This anticipated cost reduction hinges on two key drivers: advancements in hydrogen technologies and the ongoing progress of other renewable energy sources. Breakthroughs in electrolyzers, fuel cells, and related infrastructure are poised to significantly boost efficiency, thereby driving down costs. In line with this trajectory, a noteworthy initiative has been launched in the United States: the Hydrogen Shot. This ambitious endeavor, initiated in 2021, sets an audacious goal of slashing the cost of clean hydrogen from $5 per kilogram to a mere $1 per kilogram within a decade–a remarkable 80% reduction. Backed by governmental bodies and industry stake holders alike, this initiative underscores a concerted push to accelerate the transition toward a hydrogen powered future. If the economics of hydrogen can improve to the point of being equal to or better that fossil fuels we hope to replace, hydrogen could become a significant part of the global carbon emissions reduction efforts.

The future outlook for hydrogen is promising, with potential implications that could reshape the energy industry. as a significant paly in achieving global carbon emissions reductions goals, hydrogen’s economic competitiveness with fossil fuels is crucial to the ongoing energy transition. The Hydrogen Shot initiative promises not to only drive significant job creation throughout the hydrogen value chain but also to catalyze substantial reductions in greenhouse gas emissions. Additionally, by fostering economic growth and innovation, the widespread adoption of clean hydrogen holds the potential to enhance energy security and position the United States as a global leader in the transition to a low-carbon economy.

In conclusion, the potential of hydrogen to revolutionize the energy industry and contribute substantially to global sustainability goals cannot be overstated. The power of hydrogen may fuel the journey towards a cleaner and more sustainable future.