"Clean" brown coal hydrogen project a dud

From RenewEconomy

A proposed expansion of a controversial brown coal-to-hydrogen project in Victoria is under increasing pressure, with a new report from the Institute for Energy Economics and Financial Analysis finding that it’s likely an economic dud.

The Hydrogen Energy Supply Chain (HESC) is a project jointly run by the Australian and Japanese governments to take brown coal from the Latrobe Valley and produce liquid hydrogen to then ship to Japan.

The pilot project was completed last year, with just 2.6 tonnes of liquefied hydrogen delivered to Japan. Now HESC is moving towards commercialisation with a Green Innovation Fund grant from Japan of ¥220 billion (approximately AU$2.35 billion) to upscale to 30,000 to 40,000 tonnes of hydrogen a year.

Using coal to produce hydrogen is the most emissions-intensive way to do it, creating 18 to 20 times more CO2 than the amount of hydrogen produced.

If this isn’t sounding very ‘green’ to you, you’d be right. The project is classed as “clean” blue hydrogen only due to carbon capture and storage, which so far hasn’t worked in any meaningful way around the world. It is also not yet operational at the HESC site.

The report by the Institute for Energy Economics and Financial Analysis notes that currently coal-based hydrogen is cheaper than renewable hydrogen. However, this won’t be the case for long.

“As renewable energy scales up, its costs are expected to fall, as are the costs of electrolysers used to produce the renewable hydrogen; so much so that by 2030, just when the HESC reaches full-scale production, it will be based on a more expensive technology,” Coal Sector Energy Finance Analyst Andrew Gorringe wrote in the report.

“HESC will struggle to prove commercially viable in the medium term as it competes with other suppliers of hydrogen beyond the initial short-term off-take agreement with Japan.”

The other problem the report highlights is just how far the hydrogen has to go to get from Victoria to Japan. Hydrogen – being the smallest element – is prone to large losses even in liquid form. The liquification process, where the hydrogen is cooled to -253 degrees, takes up over 30% of the energy of the hydrogen itself.

Plus the long shipping journey from Victoria to Japan also causes a large loss of hydrogen in the form of ‘boil off’.

“The hydrogen lost for boil-off and fuel use for propulsion for the 9,000km journey could be up to 40% of the cargo, and boil-off could be as high as 9 times that of the equivalent loss experienced in LNG shipping,” says the report.

See this, too : The Hydrogen Furphy 

The hydrogen furphy

I've been suspicious about the hydrogen mania for a while now.   Michael Liebreich does a much better demolition job than I could.   But his recommendation to use green ammonia, made from green hydrogen, for long-term storage in electricity generation is very interesting.   And I don't share his doubts about using e-fuels for jets.  If e-fuels cost twice as much as jetfuel, so be it.  We survived without intercontinental jet flights before, and we could again.

[From BNEF]

By Michael Liebreich

Senior Contributor
BloombergNEF

Injecting some reality

Two years ago, BloombergNEF published my two-part primer on hydrogen, Separating Hype from Hydrogen. On the supply side, I was optimistic: green hydrogen (produced from renewable energy) would over time become cheaper than blue hydrogen (produced from natural gas but with carbon captured) and eventually cheaper than gray hydrogen (produced form natural gas without carbon capture).

On the demand side I was more skeptical. While clean hydrogen will be needed to decarbonize a number of use cases in industry, and perhaps for long-duration storage, I found it hard to identify any role for it in applications like land transportation or space heating. Since then, as I have done more work on industrial heat, I have even come to believe it has a limited role even there.

If my intention at the time was to inject some reality into discussions about hydrogen, I clearly failed. Rhetoric around hydrogen has become ever more overblown.

According to lobbying group the Hydrogen Council, citing a series of reports commissioned from McKinsey over the past three years, hydrogen can be expected to contribute more than 20 percent of emissions reductions needed for the world to reach net-zero emissions – a figure repeated by politicians and journalists seemingly without the slightest critical examination.

German Chancellor Olaf Scholz has called hydrogen “the gas of the future” and promised “a huge boom.” Japan’s Prime Minister Fumio Kishida has declared that “shifting to and developing a hydrogen society is critical for achieving decarbonization.” Frans Timmermans, the EU Executive Vice-President for the European Green Deal believes that “hydrogen rocks.” Jacob Rees Mogg, briefly UK Secretary of State for Energy this year, called hydrogen “the silver bullet”.

Public money is starting to flow. The EU has approved the first 13 billion euros ($13.7 billion) of the 430 billion euros ($450 billion) promised under its 2020 Hydrogen Strategy and is now working to launch a “Hydrogen Bank”. The US Inflation Reduction Act (IRA) provides a ten-year tax rebate per kilogram of green hydrogen worth $3, which will soon be more than the production cost itself. Free hydrogen anyone?

Of supreme import

In October this year the Hydrogen Council and McKinsey released another report entitled Global Hydrogen Flows, predicting long-distance transport of 400 million tonnes of clean hydrogen and its derivatives (calculated on a hydrogen-content basis) by 2050, out of total global production of 660 million tonnes of hydrogen. It is worth bearing in mind that today, 94 million tonnes of hydrogen are used annually, virtually all of it made from fossil fuels, creating 2.3% of global emissions. The vast bulk of today’s hydrogen never leaves the compound on which it is made, let alone cross an international border.

The idea of hydrogen imports as a way of decarbonizing major industrialized economies is enormously seductive – so much so that Germany and Japan have made it central to their decarbonization strategies. Here’s Japanese PM Kishida again: “Japan aims to commercialize an international hydrogen supply chain by producing hydrogen in bulk at low cost in countries blessed with bountiful renewable energy resources coupled with marine transport infrastructure.”

Chancellor Scholz is promoting hydrogen imports not just as a way of decarbonizing the German economy, but as a replacement for Russian gas. In August he and Canadian Prime Minister Justin Trudeau flew to Newfoundland and Labrador to sign an agreement to “create a transatlantic supply chain for hydrogen well before 2030, with first deliveries aiming for 2025”. As I write this, German Economy Minister Robert Habeck is on a five-day trip to Namibia and South Africa to secure hydrogen supplies.

The problem with this vision of large-scale imports of hydrogen is that the physics of hydrogen is unlikely to play ball.

The unbearable lightness of hydrogen

In February this year, Kawasaki Heavy Industries’ Suiso Frontier arrived in Kobe, Japan carrying the world’s first ever cargo of liquid hydrogen from Australia. Did this momentous occasion herald the start of a brave new world of trade in liquid hydrogen, as the press coverage suggested? In a word, no.

Set aside the A$500 million ($334 million) cost of the project; set aside the fact that most of the hydrogen on board the Suiso Frontier was made from coal; and set aside the fire that broke out on board while loading. The 1,250 cubic metres of hydrogen carried by the Suiso Frontier contained just 0.2% of the energy content of a single large LNG carrier. Okay, the first ever LNG cargo, carried 63 years ago from the Calcasieu River on the Louisiana Gulf to the UK, consisted of a similarly picayune 2,475 tonnes. Surely liquid hydrogen can be scaled up in the same way as LNG has been? Kawasaki Heavy Industries, builder of the Suiso Frontier claims it has already lined up the first order for a much larger, 160,000 m3 carrier from Nippon Kaiji Kyokai.

This is where the physics of liquid hydrogen step in. Although the scaled-up vessel would carry 60% of the volume of an LNG Q-Max, it would carry only 22% of the energy.

Hydrogen has very good gravimetric energy density – the amount of energy carried per unit weight. On this measure, hydrogen beats diesel, petrol and jetfuel by a factor of around three, and LNG by a factor of 2.7 – which is why it makes a great rocket fuel. However, it has very poor volumetric energy density – the amount of energy carried per unit volume. It’s worth remembering that while a cubic meter of water weighs 1,000 kilograms; a cubic meter of hydrogen weighs only 71 kilograms.

On a volumetric basis, hydrogen’s energy density is a quarter that of jet fuel, and only 40% of that of LNG. Since ships are volume constrained (think Suez Canal, Panama Canal, etc.), this inevitably means more trips. Even if Kawasaki Heavy Industries was to scale its hydrogen carrier to the same size as a Q-Max, it would need to make 2.5 deliveries to carry the same amount of energy as one cargo of LNG. You don’t need to know anything at all about shipping to know that 2.5 times the trips are going to cost you 2.5 times as much.

But this is only the start. A liquid hydrogen carrier will inevitably be more expensive than an LNG carrier. Its load will be at -253C instead of -162C, and all pipes, valves, pumps and tanks have to resist hydrogen embrittlement. And because liquid hydrogen is both colder and lighter than LNG, the liquid hydrogen ship would have up to nine times more boil-off en route (these ships let some of the load boil off as heat enters the tanks, and then use that as fuel for their engines), unless you add either much more insulation or a complex cryogenic recycling system.

Overall, you would be wise to assume that the seaborne segment of your hydrogen trade will cost around four times the cost of LNG per unit energy.

It’s the physics, stupid

But that only deals with the seaborne segment. We still have to talk about liquefaction and regasification.

Liquefying hydrogen is a is a hugely energy-hungry process, made complex by the quirks of hydrogen physics – things like its negative Joule-Thomson Effect (unlike most gases, hydrogen gets warm when it expands and cold when compressed) and ortho-para isomer conversion (without which liquid hydrogen re-evaporates, irrespective of insulation). Liquefaction of hydrogen currently consumes 30-40% of its energy content, versus no more than 10% for LNG. Ways to improve this are being researched, but nothing can change the fact that liquefying hydrogen is, quite simply, a bear.

As for regasification, again the plants will be more expensive than for LNG. They need to operate at lower temperatures; all valves, pumps, pipes and tanks have to resist embrittlement; and compressors have to be of larger capacity because pressurizing hydrogen gas requires more work than pressurizing natural gas. European politicians, scrambling to build new terminals to receive LNG in replacement of Russian gas, are suggesting that these terminals will be repurposed to receive hydrogen or its derivatives. This is nonsense. You can re-use the docks and infrastructure, and any distribution pipelines can be upgraded, but 70% of everything else has to be scrapped.

In summary, while LNG approximately doubles the cost of gas delivered by pipeline, shipping liquid hydrogen will cost four to six times more than LNG. In other words, you can’t power an economy on imported liquid hydrogen, and that is not because of things that can be fixed – scale, technology, cost of capital and so on – but because of the underlying physics: volumetric density, liquefaction temperature and interactions with other materials.

It’s a gas, gas, gas!

If importing hydrogen in liquid form is out, what about importing hydrogen as a gas?

Here, things look much better. Gaseous hydrogen is already transported by pipeline – all the pipes, pumps, valves and tanks need to be appropriately engineered, but the economics are not terrible. Just as well, given the volume of hydrogen we are going to need at industrial “hydrogen hubs” for industrial uses and to provide long-duration back-up power.

Just replacing the current production of gray and black hydrogen would create demand for 94 million tonnes of clean hydrogen. Pipeline imports are well-placed to meet a decent proportion of this.

There is, however, a caveat. The longest natural gas pipeline in the world (excluding side branches) is Brazil’s National Unification Gas Pipeline (GASUN), just under 5,000 kilometers long. In their report on hydrogen trade, McKinsey and the Hydrogen Council predict 40 hydrogen “trade routes” connecting the globe. Those serving Europe by pipeline from Norway, North Africa and the Gulf are certainly feasible (the one from Russia is clearly off the cards for decades). However, none of the longer trade routes linking the US West Coast with Asia, the US East Coast with Europe, or the Gulf, Africa or Australia with Asia are likely to carry a single cubic meter of gaseous hydrogen.

There are a few companies proposing to carry compressed hydrogen gas by ship. This would allow them to avoid the cost and complexity of liquefaction but would expose them to the same problems of lower volumetric energy density, only more so. Provaris Energy has designed a ship carrying hydrogen gas at 250 bar. But this translates to just 25 kilograms of hydrogen per cubic meter – just over a third of the very poor volumetric density of liquid hydrogen. Scaled up to the size of a Q-Max, their ship would carry around one seventh of the energy. Seven ships to do the work of one, you can imagine what that does to costs.

There may be some niche applications for shipping gaseous hydrogen, for instance moving stranded supplies between islands, but it is not going to happen in more than homeopathic quantities.

The exotics

There are other ways of transporting hydrogen beyond liquid and gas. We’ll get on to derivatives of hydrogen in a moment, but first I want to deal with the exotics – liquid organic hydrogen carriers (LOHCs) and metal hydrides. Here the goal is to load hydrogen into a chemical or metal carrier, which allows it to be transported at ambient temperatures and pressures. On arrival the hydrogen is released and the carrier returned to the point of origin.

One promising LOHC is benzyl toluene, being marketed as a solution for hydrogen shipping by a company called Hydrogenious. But again it has a volumetric density problem. One cubic meter of benzyl toluene can only be loaded with 54 kilograms of hydrogen – which means four times as many trips for each energy cargo as you would have with LNG. In addition, loading hydrogen into the organic solvent is an exothermic process, generating heat where you don’t need it, and then you need to add energy at 300C at the arrival location to extract it – using up around 30% of the delivered energy.

That’s not to say LOHCs are not interesting: they could perhaps find a role in long-duration stationary storage – not everywhere has the salt caverns or depleted gas fields required to store gaseous hydrogen, but any tanker farm would be able to handle benzyl toluene and there may be options to store and reapply the process heat between cycles. There may even be a modest import market for LOHCs, to replenish long-duration storage tanks.

Metal hydrides offer the hope of transporting up to twice as much fuel per cubic meter as liquid hydrogen – but each family of hydrides studied so far has shown disadvantages: cost, gravimetric density, time to charge, absorptive capacity, heat required to release the hydrogen and so on. It would be a brave investor who thought we were going to move hydrogen at scale this way, when 50 years of research has not yielded as single commercial application.

First derivatives

Next up, hydrogen derivatives – e-methane, e-methanol. These are certainly easier to transport – drop-in replacements for their fossil equivalents. Their problem is high production cost. For each of them you need a source of clean hydrogen – whether blue, green, pink or red (from nuclear power, whichever color code you use) or whatever – plus a source of carbon nearby, and then you need to combine them into molecules of varying degrees of complexity.

The cheapest source of carbon would be captured from the combustion of fossil fuels – but that would make no sense as it would not be compatible with net zero. The only thing that could possibly make sense would be to use direct air capture (DAC) or secure carbon from a bio-based source, so that when it is burned it just returns to the atmosphere.

A bit of systems thinking, however, shows that even this makes no sense. Take e-methane. By the time you have gone to the cost of securing your carbon, why not just sequester it, instead of incurring further costs in producing hydrogen and combining them into your derivative. You could then just deliver plain old fossil gas to the importing country – along with a carbon credit if needed. That would be identical from a climate perspective and vastly cheaper.

Methanol can and must be made in future using clean hydrogen. Some of it will be made where hydrogen is cheap and exported, but only for use cases where it will be consumed as methanol. In 2022, global production of methanol was 110 million tonnes – but adjusting for molar weights, that is equivalent to just 14 million tonnes of hydrogen. Should demand double and a third of that get traded internationally, only a 9 million-tonne import market by hydrogen mass would be created. That barely scratches the surface of the Hydrogen Council’s 400 million tonnes.

E-methanol also represents a potential pathway to decarbonize shipping – but ammonia and waste-based biofuels both look like being cheaper. Even using nuclear power for the world’s largest ships would most likely be cheaper than e-methanol. Global shipping fuel demand today is around 300 million tonnes per year; let’s suppose, optimistically, that demand increases by 50% by 2050, that 20% is replaced by methanol, and a third of that methanol is traded internationally. Once you adjust for the molar mass and energy content of methanol, that would only create annual demand for another 8 million tonnes of hydrogen imports.

e-Fuels

Some continue to promote e-fuels as the solution for land transportation, particularly in Germany and Japan. They point to the fact such fuels require no changes in consumer behavior, highlight the millions of jobs that depend on the internal combustion engine and claim that scrapping 1.4 billion internal combustion vehicles on the world’s roads would be unaffordable.

Their arguments have no merit. First, those 1.4 billion vehicles will be scrapped anyway before whichever year countries select for net zero. In most cases, electric vehicles are already competitive on a total-cost-of-ownership basis with petrol and diesel. E-fuels, by contrast, will still be three to five times as expensive in 2050, driven by their production complexity and the efficiency losses at each production stage. Yes, Porsche is building a pilot project in Chile to produce e-fuels, but theirs is not exactly a cost-conscious customer base.

The fact is that those jobs associated with internal combustion engine manufacturing will be disappearing anyway, the only question is whether they are lost to other technologies or to China. As for behavioral change, most EV users like the fact that they can charge anywhere, rather than having to visit a gas station every week.

Flights of fancy

Time for a deep dive into hydrogen’s potential use in aviation. Airbus has said that it “considers hydrogen to be an important technology pathway to achieve our ambition of bringing a zero-emission commercial aircraft to market by 2035,” and this month, Rolls-Royce and EasyJet made the news by testing a turboprop engine on pure hydrogen.

It turns out that running an aircraft engine on hydrogen is not the difficult bit – the Soviet Union did it back in 1988, not on a test bench but in the air. The real problems are caused, once again, by the physics of hydrogen.

With just 25% of the energy density of kerosene, replacing the maximum take-off fuel load for a long-haul aircraft would require more space than the entire swept volume of its fuselage – a non-starter. For short-haul flights, the focus of Easyjet’s interest, the fuel tank would take up around a third of the fuselage. That means ticket prices 50% higher than now, even before paying for the higher costs of the plane, the cost of the liquid hydrogen, and cost of its ground handling equipment. In total, expect a doubling or tripling of prices.

The real show-stopper, however, is getting the fuel to the airport. Liquid hydrogen transfer lines exist, but there is no way to keep miles of pipeline at -253C and handle the safety issues of any potential leaks. That leaves road tankers or gas pipelines.

Let’s do a thought experiment: try to replace all 20,000 tonnes of jet fuel delivered daily to Heathrow airport with 7,200 tonnes of liquid hydrogen. By tanker truck, that would mean 2,300 daily movements of liquid hydrogen in West London. The safety and traffic implications don’t bear thinking about. Now the only option is to bring the hydrogen in by gas pipeline, and liquefy it on site. But that would require 2.7GW of electrical power, according to engineer and Oxford University ammonia expert Dr. Mike Mason – approximately the output of a new nuclear power station the size of Hinkley C, plus a lot of pylons. And then you need to dump enough heat to raise the temperature of the Thames by 18 degrees C.

The bottom line is that liquid hydrogen could perhaps end up powering a few executive jets – startup ZeroAvia certainly hopes so – but not aviation as we know it. The only substantial role for hydrogen in aviation would be through the production of e-fuels. These are certainly technically feasible – UK company Zero Petroleum has already made some – but they look like being at least twice as expensive as sustainable aviation fuels (SAF) based on agricultural or forestry waste.

If potential volumes of SAF are limited by feedstock availability, then there is a market opportunity for hydrogen in aviation fuels, if not, there isn’t. Global aviation fuel demand was around 300 million tonnes in 2019, which translates to 46 million tonnes on a hydrogen mass basis. If demand grows by 50%, 25% is met by e-jetfuel and one third of that is shipped internationally, that only generates 6 million tonnes of traded hydrogen.

Moan, moan, ammonia

That brings us, finally, to ammonia – the last option for those hoping to develop substantial long-distance hydrogen imports.

Around 190 million tonnes of ammonia are produced each year, mainly for fertilizer and as a chemical feedstock, almost all of it from fossil feedstock. Around 10 percent of current production is already traded internationally but this only comes to around three million tonnes by hydrogen mass.

Switching to clean ammonia for fertilizer production will without doubt drive a big increase in traded hydrogen. Where there are pipelines, hydrogen can be made where renewable power is cheap and imported in place of natural gas and used to make ammonia at the destination. Where there are no pipelines, green ammonia or finished fertilizer will be produced and shipped instead.

Supposing the fertilizer market grows by half by 2050, all of it goes low-carbon and a third of it ends up being shipped internationally, that would increase ammonia trading from 18 to 95 million tonnes per year – a lot of ammonia. This will be a relief for those investing in ammonia projects in Chile, Canada, Namibia and South Africa: their output may not find much use in the energy sector, but at least they should have access to a very substantial market. It is, however, only 17 million tonnes on a hydrogen mass basis.

Back to shipping fuels. Since ammonia will be cheaper than methanol, as discussed, let’s be optimistic and say half of the volumes described above are replaced with ammonia, and a third of it is traded internationally. That would drive an additional 25 million tonnes of demand by hydrogen mass.

Japan’s big bet

Japan is betting that imported ammonia will be used to generate power. Its national decarbonization plan is based on retaining its coal-fired power stations, but fueling them with increasing proportions of ammonia – first 20%, then 50%, then 100% by 2050. So confident is it – and so keen to keep selling its technology internationally – that it is encouraging Vietnam and other South-East Asian countries to keep building coal-fired power stations. Will the bet pay off?

Let’s look first at ammonia made from green hydrogen. That means generating wind and solar power; using it to produce hydrogen (80% efficiency); making ammonia via the Haber-Bosch process (70% efficiency); liquefying it (90% efficiency); shipping it (90% efficiency); and burning it to generate power (45% efficiency). Your end-to-end efficiency will be an astonishingly poor 20%. Although it might be possible to improve the efficiency of each of stage, the tyranny of multiple process steps means your end-to-end efficiency is hard to budge.

What 20% end-to-end efficiency means is that the resulting power will cost five times as much as the original power – and that is before accounting for capital invested in all those process stages and maintenance. In addition, combustion of ammonia produces nitrous oxides – hazardous to health and powerful greenhouse gases in their own right.

Now, ammonia from blue hydrogen. You eliminate the electrolysis stage, so your end-to-end efficiency is a little higher at 26%, but you have the extra cost of carbon capture and sequestration, so the resulting power cost is going to be about the same. The real question, however, is why bother? Why not just ship the natural gas to Japan instead of ammonia – LNG has 1.7 times the volumetric energy density of ammonia, so you need fewer cargoes. Then you capture the CO2 at the other end, and either sequester or send it back to the point of origin on the same ships. You have the same climate impact, approximately the same cost of carbon capture and sequestration, but significantly greater efficiency and lower shipping costs.

The bottom line for ammonia as a fuel for power generation, whether co-fired or pure, is that no economy can be internationally competitive based on the resulting power prices. My estimates are in line with the more detailed modelling work undertaken by BloombergNEF: BloombergNEF found that 100% ammonia-fired power in Japan would cost around $260 per megawatt-hour in 2030 and $200 by 2050 – around double the cost of renewable energy.

The fact that Japan could generate large amounts of renewable energy – in particular, offshore wind – at much lower cost points to the role that clean ammonia could in fact play in the country’s power system: providing back-up. Bill Gates likes to quote Vaclav Smil on the three-day cyclones that hit Tokyo almost every year – which would shut down renewable generation and leave it short of 22GW of power. He laughs at the idea that batteries could fill the resulting gap, and he is correct to do so. However, the gap is only 1,600 GWh, which could be generated from a million cubic meters of ammonia – an amount that could be brought in on just four Q-Max-sized carriers.

So, while basing Japan’s economy on electricity generated from imported ammonia is an economic non-starter, storing a few million tonnes of ammonia and using it for long-duration storage looks a lot more realistic.

Conclusions and implications

This has been a long journey and we have covered a lot of ground. I want to leave you with a few conclusions by way of summary.

The only way to move hydrogen economically is as a gas, by pipeline. Forget liquid hydrogen: it will struggle to find any role in the future energy or transport systems because of its poor volumetric energy density and difficulties with handling. It will have no role at all as a traded commodity.

Ammonia will be traded and transported, primarily for use in fertilizer production, plus as a shipping fuel. It will not be imported to power bulk power generation, but will be imported and stored to deliver long-duration storage. Some LOHC might also be imported, but only where it is stored for resilience purposes.

Clean methanol will be made near to sources of cheap clean hydrogen and some of it will be shipped around the world for use as a chemical feedstock. E-fuels – whether methanol, petrol, diesel or kerosene equivalents – will not be shipped around the world in meaningful volumes because their cost will severely limit their uptake, with the possible exception of aviation.

Totting up the various future hydrogen trade flows covered here, it is clear that the Hydrogen Council/McKinsey figures of 660 million tonnes of clean hydrogen production and 400 million tonnes of long-distance transportation are out by a factor of at least three. In addition, given that China and India have only pledged net zero by 2060 and 2070 respectively, such flows that do materialize will take decades beyond 2050.

The implications reach far beyond the question of international trade in hydrogen and its derivatives. The prohibitive cost of long-distance imports means that energy-intensive industries will inevitably migrate to regions with cheap clean energy. It is inconceivable for any country to import iron ore from Australia or Brazil, hydrogen from Australia, the Gulf, Canada or Africa, and make steel at a globally competitive cost. Magical thinking will be no defense against de-industrialization.

Finally, it is worth noting that none of this calls into question the fact that clean hydrogen will be required to decarbonize certain sectors, which will eventually create more than 100 million tonnes per year of demand. Just as railway mania left the world with railways, electricity mania left the world with power networks, and the dot-com bubble left the world with broadband fiber, so hydrogen mania will leave the world with a lot of clean hydrogen.

The worry is that, along the way, we are going to waste huge amounts of money on the wrong use cases for hydrogen and the wrong infrastructure in the wrong places. Worse than wasting money, we will also be wasting time – and that is the one thing we don’t have. Let’s be smart.

Selah.

Michael Liebreich is the founder and senior contributor to BloombergNEF. He is also the CEO and chair of Liebreich Associates, founding managing partner of EcoPragma Capital and an advisor to the U.K. Board of Trade.

Source: BNEF

 

Oil's blue hydrogen push

 From Climate Change News

The oil and gas industry is promoting the use of “low-carbon” hydrogen derived from methane that is potentially dirtier than burning fossil gas for energy, scientists and analysts have told Climate Home News.

Observers say the European Commission’s decision to classify gas as a transition fuel in its green investment list leaves the door open to “blue hydrogen” projects with exaggerated climate credentials.

“Blue hydrogen is basically nothing but a smokescreen for more air pollution, mining, and fossil fuel use with hardly any CO2 benefit,” said Mark Jacobson, professor of civil and environmental engineering and director of the Atmosphere/Energy Program at Stanford University.

Unlike green hydrogen, which is derived from water in a process powered exclusively by renewable energy, blue hydrogen comes from methane, with the carbon dioxide emitted during production captured and stored.

The International Energy Agency reported last week that there are at least 50 blue hydrogen projects under development globally, and capacity is set to increase more than tenfold by 2030.

In a delegated act last year, the EU Commission set an emissions threshold of just over 3 tonnes of CO2e per tonne of H2 for hydrogen projects to comply with the green taxonomy.

“Which is not low enough to guarantee that it would be only renewable energy-powered hydrogen,” said Eleonora Moro, a hydrogen analyst at the E3G climate think tank. “It could include some types of high efficiency blue hydrogen projects.”

One such project is a joint venture announced by Equinor and Engie in December to produce “low-carbon hydrogen… at large scale and at competitive cost levels”. The companies claim that they will use a process known as autothermal reforming (ATR), which “allows for decarbonization rates above 95%”.

The project sponsors some editions of POLITICO’s Brussels Playbook newsletter, telling readers: “Hydrogen can accelerate the energy transition but we need to develop well-functioning markets and infrastructure. The H2BE project will help kick-start the Belgian low-carbon hydrogen market.”

ATR involves heating methane gas with a catalyst, then adding water to get hydrogen and CO2 that is then captured. Equinor says it will bury the captured CO2 beneath the North Sea.

The EU’s hydrogen strategy, published in 2020, says that “renewable and low-carbon hydrogen can contribute to reduce greenhouse gas emissions ahead of 2030”.

Jacobson disputed Equinor and Engie’s claim that blue hydrogen can be classified as “low-carbon”.

“Carbon capture equipment is never 95% effective,” he told Climate Home. Blue hydrogen capture technology currently available is at best 78.8% effective, “but that ignores the fact that more energy is needed to run carbon capture equipment, so it is 78.8% of a much larger emission stream”.

Jacobson co-wrote a study last year which found, due to the increased amount of fossil gas needed to power the carbon capture and storage (CCS) process, blue hydrogen likely had a 20% higher carbon footprint than burning methane alone.

A paper by different researchers last month noted that developers’ promises of a 90-95% CCS success rate were based on theory, not practice.

“While these high capture rates are assumed in many national strategies and major reports, they have not yet been achieved in a large-scale commercial plant,” said the paper, published in the journal Applied Energy.

Another issue with blue hydrogen projects is that the methane feedstock can leak, with a short-term warming impact more than 80 times that of CO2.

Countries agreed at the last UN climate summit in November to reduce methane emissions by 30% this decade, and an EU Commission proposal seeks a ban on routine gas flaring and venting as well as penalties on leaks.

Yet the draft legislation doesn’t set specific emissions reduction targets, and E3G’s Moro said leakages – which may be as much as 4% in some countries – could only be penalised if effectively observed.

Researchers also questioned if burying CO2 beneath the sea bed was a durable solution to the climate crisis.

Caitlin Swalec, research analyst and hydrogen specialist at the Global Energy Monitor watchdog, said that no matter how well it is stored, buried CO2 will “eventually leak and make its way back to the atmosphere”.

“This may happen over several hundred years, or a few decades. We don’t really know because we haven’t tested it,” she said.

The Intergovernmental Panel on Climate Change, in its 2005 special report on CCS, suggested that CO2 stored below 3,000 metres would be less likely to leak. At this depth, the gas becomes denser than water.

Equinor says it stores its captured CO2 “1,000-2,000 metres below the seabed” and Swalec said it was not clear how viable the storage was at such depths.

“In order to store CO2 long term under the sea floor, it needs to go very deep which means that it will require a lot of energy to store it,” she told Climate Home. “If it takes more energy (i.e. emissions) to store the CO2 than we remove, the project will cause more problems than it solves.”

Silje Ask Lunberg, a senior campaigner and Norway expert at Oil Change International, said Equinor – previously Statoil – had a history of failed CCS attempts.

These include problems at its Snohvit field in the Barents Sea, which saw one attempt at CCS aborted as the reservoir was at risk of collapsing, and a second paused as the injected CO2 was polluting the methane extracted from the site.


Statoil also mothballed its Mongstad CCS plant after less than a year of operations.

“Mongstad was meant to demonstrate that it was completely feasible to have carbon capture at gas-fired power plants and it was supposed to be 100% from 2014,” said Lundberg. “They ended up failing at their own project.”

Construction of the Nordstream 2 gas pipeline, which analysts say may transport hydrogen gas in future (Image: Paul Langrock/Greenpeace)

The blue hydrogen scam

 As concern and even panic builds about global heating among hoi polloi, fossil fuel companies are inventing new ways to bamboozle the public.  Subsidies for coal, but called instead "capacity payments"; touchy-feely advertising to distract from what they're actually still doing, i.e., ramping up production of oil, gas and coal; and glitzy new initiatives which sound green as, but are really just extensions to their business model, and will allow/encourage emissions decades into the future.  

One of these is the fabled "hydrogen economy" which starts out by being about green hydrogen (hydrogen made by the electrolysis of water using electricity from renewables) but morphs into "grey hydrogen" which is about hydrogen made from natural gas, with the CO2 produced being released into the atmosphere, because "grey hydrogen" is much cheaper than green hydrogen.  To make this more palatable, the fossil fuel companies have concocted the idea of "blue hydrogen", which is grey hydrogen with the CO2 being pumped into underground storage.  Of course, this ignores the cost (and energy cost!) of compressing the CO2 and then transporting it to where it is to be buried.  

One Ozzie fossil fuel company shamefacedly admitted that their hydrogen breakthrough is really about grey hydrogen, which they call blue hydrogen because at some unspecified point in the future they'll start carbon capture and storage (CCS).  

The video below, from Just Have A Think, shreds the case for grey and blue hydrogen.

A carbon tax would put paid to all these subterfuges, which is why, of course, fossil fuel companies are so adamantly opposed to it.  

The other carbon boondoggle is the ammonia euphoria.  I'll talk about that in another piece.

Oil companies know hydrogen is a dead end

 From CleanTechnica

Reasonable minds may differ on the question of whether hydrogen fuel cells have a place in the clean-energy future. However, it’s a fact that the fossil fuel giants have been heavily hyping hydrogen, and it’s not hard to see why, as the vast majority of hydrogen is currently produced from natural gas.

Oil companies (which now want to be known as “energy companies”) are keen to be seen as green these days. Shell, BP, and Total are investing large sums in EV infrastructure, at all levels of the charging value chain. They also present their hydrogen business as a tool to reduce carbon emissions. However, recent comments by an oil industry lobbyist concerning the industry’s efforts to undermine climate regulations indicate that Big Oil’s double-dealing strategy — butterflies and grandchildren for the press, lobbyists and campaign cash for policymakers — hasn’t changed.

Michael Liebreich, the founder of BloombergNEF (originally named New Energy Financing before it was purchased by Bloomberg), presents some new thoughts about the issue in a recent interview published in Recharge.

Liebreich (who is no tree-hugging liberal, but a pro-business supporter of the UK Conservative Party, and an advisor to Norwegian oil giant Equinor) isn’t against hydrogen per se, but he believes (as do many in the clean energy field) that it makes sense only in certain use cases.

“In an attempt to guide governments and industry players away from the [oil industry-sponsored] spin, Liebreich has created what he calls his Hydrogen Ladder, a simple chart showing which use cases for H2 are uncompetitive, which are unavoidable for decarbonization, and which sit somewhere in the middle,” writes Recharge’s Leigh Collins.

Green represents areas where H2 is essential, red where it's pointless, i.e.,
 where alternatives are cheaper and more efficient.  Source: @MLiebreich

At the top of Liebreich’s ladder lie applications such as ammonia-based fertilizer and oil refining, which currently use highly polluting grey hydrogen produced from fossil fuels, and are responsible for 3–4% of all global carbon emissions. In the middle are use cases in which hydrogen might make sense, such as seasonal power storage, steel, chemicals, shipping and long-haul aviation. At the bottom “uncompetitive” end of the ladder are light-duty vehicles and domestic heating, applications in which hydrogen fuel cells clearly make no sense (battery-electric vehicles and heat pumps are far more efficient, and already well established in the market).

In Liebreich’s view, the logical course would be to replace polluting grey[/blue] hydrogen with green hydrogen produced by electrolysis in the applications at the hydrogen-friendly top of the ladder, and to cease futile attempts to make hydrogen work for cars and other applications at the bottom of the ladder.

However, that’s not the approach that the oil companies are taking. They’re pouring money and lobbying efforts into convincing politicians to direct public investment to building a “hydrogen economy,” with considerable success, notable in Canada, Germany, and the UK.

This is not because oil company execs are ignorant of the science — you can bet they’re as well informed as you and I, if not more so. Liebreich believes that leaders of fossil fuel firms know that hydrogen is a poor choice for cars and home heating, but are pushing it as a solution in order to slow the pace of electrification.

“If you’re an oil and gas company, in a way, talking about hydrogen is kind of a two-way bet because if it works, then you’re embedded in the hydrogen industry — but if it doesn’t work, you’ve delayed the transition to the thing you don’t make, which is electricity,” he tells Recharge. “So why wouldn’t you promote hydrogen for inappropriate use? For the things that are not at the top of the ladder, that are fairly down — local trains, local buses, cars, delivery vehicles — why not promote it? Because at worst it creates confusion, which is great [for them]. And these companies have an interest in this [electric] stuff not moving too fast, I’m afraid — for all their good words.”

A hydrogen-powered plane

From TriplePundit

The clean energy revolution means more than simply replacing fossil fuels with low-carbon alternatives. Clean technology can also provide extra benefits for companies in terms of productivity, comfort and convenience. A case in point is the hydrogen plane startup ZeroAvia. The company has just emerged from “stealth” mode to offer the world’s first commercial aircraft with a hydrogen fuel cell powertrain as its exclusive means of locomotion.

ZeroAvia’s business model is based on the premise that its hydrogen fuel cell powertrain will reduce the cost of flight on small, 10-20 seat aircraft, targeting short-haul journeys of up to 500 miles.

With the ability of the company's hydrogen plane to compete on cost for passengers against large conventional jets, ZeroAvia is anticipating that business travelers will be attracted by the opportunity to fly into smaller regional airports.

Ideally, the increased flexibility in choice of destinations will reduce the potential for delayed flights and long security lines that often bedevil larger airports.

Hydrogen fuel cell passenger cars have been slow to take off, partly due to their relatively high cost and lack of a mature fuel distribution network for motorists.

Those two issues are not significant barriers for ZeroAvia’s hydrogen fuel cell aircraft, however.

The company is anticipating a per-flight cost savings of about 50 percent for its powertrain compared to conventional jet aircraft. Higher power train efficiency is one key difference. Lower fuel and maintenance costs will also factor in.

To help reduce costs farther, ZeroAvia has adopted a “power-by-the-hour” engine lease model commonly used in the aircraft industry, in which customers pay only for the hours that they use the powertrain. The cost of fuel and maintenance will be picked up by ZeroAvia as part of the lease.

Hydrogen fuel cells produce no airborne pollutants. The only emission is water, resulting from the interaction of hydrogen with oxygen in the fuel cell.

Still, the supply chain for hydrogen is front-loaded with pollutants and environmental impacts because the primary source for hydrogen today is natural gas.

Air Liquide has committed to decarbonizing hydrogen production for energy-related applications through its Blue Hydrogen initiative.

For its short-term goal, the company has pledged carbon-free production for at least 50 percent of hydrogen in the energy category by 2020 -- in other words, by next year. Biogas, water-splitting (using electricity sourced from renewables) and carbon recycling are the three main pathways identified by the company.

Air Liquide’s timetable for renewable hydrogen improves the prospects for ZeroAvia to reduce its supply chain emissions.

ZeroAvia is looking at the year 2022 to introduce its new fuel cell aircraft to the market, and earlier this year Air Liquide announced it would ramp up carbon-free hydrogen production at an existing facility just across the border from the U.S. in Canada.

[Read more here]

Brown hydrogen is made from coal, blue hydrogen from natural gas and green hydrogen via electrolysis using green electricity.  The supporters of a hydrogen economy say that supporting blue hydrogen will lead to economies of scale which will then allow the introduction of green hydrogen.  For example, this page from Oz gas producer Woodside. 

I'm not altogether convinced.  The problem with blue hydrogen is not economies of scale.  It's cost, because the chemical bonds between oxygen and hydrogen in the form of water are so strong it requires lots of energy to break them apart during electrolysis.   ZeroAvia's relative cheapness, I suspect, depends on blue hydrogen, not green. 

That's doesn't mean ZeroAvia's project is completely pointless.  Green hydrogen produced by renewable electricity that would otherwise be curtailed because there is surplus electricity in the grid is cheap.  Curtailment will increase rapidly as we increase the percentage of renewables in the grid.  And it may be possible that the CO₂ produced as a by-product of the production of blue hydrogen could be dissolved in water and pumped into basalt where it turns into rock.  On the other hand, compressing and delivering the CO₂ to far-off locations increases the cost and energy usage.

For now, blue hydrogen is more efficient and much less polluting than petroleum or jet-fuel, so it is half a step forward.  Air Liquide's commitment to producing 50% green hydrogen as part of its total hydrogen production is good news.  Progress comes from small steps, as long as they're all in the same direction.