There’s something about hydrogen that captures our imagination, attracting many supporters for whom the first element is the solution to innumerable aspects of cleaning up future energy. Recent years have seen huge numbers of announcements of low-carbon hydrogen production projects. But tracking those projects from announcement to investment and into construction shows that only a small fraction are actually making it to production.
The reality is that hydrogen’s primary role in the future will be as a chemical feedstock that’s incorporated into molecules, and not as a fuel or an energy source. Perhaps unsurprisingly, the projects that are making it into construction tend to be those where hydrogen is already being used – for example petrochemical crackers in oil refineries, or ammonia production plants.
One of the big challenges of low-carbon hydrogen, whether ‘blue’ or ‘green’, is that it is almost inevitably more expensive than the ‘grey’ hydrogen produced from fossil fuels. The blue stuff is made from the same fossil sources but then cleaned up by capturing and storing the carbon emissions it generates, and those added costs mean it will always come at a premium. And the high cost of green hydrogen – made by electrolysing water – is also fairly stubborn, partly because electrolyser engineering is complex, which is limiting economies of scale, and partly because the ongoing cost is heavily dependent on the price of renewable electricity.
Physical and thermodynamic limitations in hydrogen production, transport and conversion to either heat or electricity also dampen hydrogen’s potential as an energy carrier. It’s no surprise that the vast majority of hydrogen is currently used as close as possible to where it is produced. There are much better options for decarbonising things like space heating and energy storage.
So the mounting numbers of cancelled and paused hydrogen projects could be an indication of a correction in industry’s over-optimism – a bubble that is now deflating as projects encounter the economic implications of physics and thermodynamics. Another, more cynical, view is that some of these projects were merely commitments of convenience – buying companies a grace period on reducing their current emissions on the promise of big hydrogen gains down the line.
The fact that significant amounts of low-carbon hydrogen production is still making it to construction demonstrates that, in the right circumstances, hydrogen can have a meaningful impact on reducing industrial carbon emissions. But we need to get better at separating hope and hype from reality.
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