Is hydrogen perhaps just an invention to allow the oil and gas sector to keep up their current business models? Would it not be more efficient to consume green electricity directly, instead of using it for the production of hydrogen? These and other questions I got following a recent post about hydrogen business models, discussed in a recent seminar organized by ABNAmro at Circl in Amsterdam. To complement my earlier post I add some insights below.
· To start with, hydrogen offers an interesting possibility to carry and store energy, andit may be produced in various ways. Traditional (grey) hydrogen is produced from natural gas, which causes CO2 emissions. During the production of so-called blue hydrogen this CO2 is stored underground. Green hydrogen is produced from renewable sources, such as offshore wind capacity or large-scale solar PV. Blue and green hydrogen could play important roles in the transition to an emissions-free society.
· Including hydrogen in the energy mix will help to reduce overall costs of the energy transition. It may seem more efficient to use green electricity directly in buildings, industry or transport, instead of producing hydrogen with it first. However, using hydrogen allows to maintain infrastructure that is currently used for carrying natural gas. It would therefore avoid extensive and costly reinforcements of the electricity grid.
· The supply of hydrogen from renewable sources is still limited, however. Large scale production of green hydrogen will require that large capacities of wind or solar PV become operational. Therefore, green hydrogen that will become available in the next decade will be used where alternatives are absent, notably feedstocks and high temperature applications in industry, and in heavy transport. In contrast, various alternatives are available in the built environment. In the Netherlands, 1,5 million homes will be disconnected from the natural gas infrastructure in the next decade. Many of these are preferably connected to heat networks or become fully electrified, relying on thermal insulation and heat pumps. Wherever gas pipelines cannot be replaced they may also be used to carry e.g. biomethane as an alternative to natural gas.
Considering the considerable task to meet the Paris objectives in an affordable way hydrogen will need to play a role in the energy transition. Pilots and small-scale commercial applications in buildings and transport promote learning and awareness, and improve business cases for production and distribution. Nevertheless, the climate impact of most hydrogen used is still negative, and a lot of work remains to turn its colour from grey to blue and green. The announcement last week by Shell, Gasunie and Groningen Seaports to realize a 10GW (!) hydrogen wind park offshore clearly illustrates this.
2 March 2020