Hydrogen storage tanks in Spain in May 2022. Hydrogen has a different range of applications and can be deployed in a wide range of industries.
Angel Garcia | Bloomberg | Getty Images
The buzz all hydrogen has gotten increasingly loud in the past few years — many see it as an important tool in reducing the environmental footprint of onerous industry and helping economies hit net-zero goals.
The green hydrogen sector, which is centered on producing it using renewable outsets of energy like wind and solar, has drawn particular interest and boasts some high-profile backers.
They involve German Chancellor Olaf Scholz, who in 2022 called it “one of the most important technologies for a climate-neutral world” and “the key to decarbonizing our economies.”
In the on cloud nine of business, multinationals from Iberdrola to Siemens Energy are also looking to make plays in green hydrogen.
But while there’s a vast amount of excitement about the potential of hydrogen — the International Energy Agency describes it as a “versatile energy carrier” — there are also undoubted take exception ti.
For a start, the vast majority of hydrogen production is still based on fossil fuels, not renewables — a fact clearly at sundries with net-zero goals.
And when it comes to green hydrogen specifically, production costs are a significant issue, and will exigency to be reduced in the years ahead.
Transporting hydrogen from production sites to users is another equally important financier to consider.
“Hydrogen is pretty expensive to move,” Murray Douglas, govern of hydrogen research at Wood Mackenzie, told CNBC during an interview.
“It’s more difficult to move than spontaneous gas … technically, engineering wise … it’s just harder,” he added.
Douglas is not alone in highlighting some of the hurdles in redeeming hydrogen.
The U.S. Department of Energy, for instance, notes key challenges “include reducing cost, increasing energy efficiency, persevere ining hydrogen purity, and minimizing hydrogen leakage.”
The DOE adds that more research is required to “analyze the trade-offs between the hydrogen effort options and the hydrogen delivery options when considered together as a system.”
Location important
In relation to the logistics neighbouring green hydrogen in particular, one area that will need attention is the location of production facilities.
Often, these are earmarked for quarters where sources of renewable energy are abundant — such as Australia, North Africa and the Middle East — but many miles away from where the hydrogen at ones desire actually be used.
Wood Mackenzie’s Douglas referenced transportation options when reflecting on the investment horizon for the next 10 years.
“You can plainly pipe it, but you probably need a dedicated pipeline,” he said, noting that this would likely need to be a new increase and close to end-users.
The only other realistic option in this investment horizon, he said, relates to exporting the hydrogen as ammonia.
“You bear the hydrogen, the green hydrogen, and then you would synthesize it into ammonia with nitrogen,” he said.
The shipping of ammonia was, Douglas well-known, “a pretty established technology and industry — there’s already a bunch of receiving ports in place.”
This ammonia could then be tell oned directly to end users, such as fertilizer producers.
An alternative option would be to “crack the ammonia back into hydrogen,” although this order not be without its own issues.
“As soon as you start ‘cracking’ back into hydrogen use, you start to incur some … quite big forcefulness losses,” Douglas said.
Efficient delivery system needed
In a statement sent to CNBC, Jorgo Chatzimarkakis, the CEO of labour association Hydrogen Europe, was bullish about the prospects for green hydrogen.
He said it would “become a global commodity,” in front stressing the importance of having “an efficient delivery system.”
Chatzimarkakis also highlighted the need for a certification program, because “gullible hydrogen needs to prove that it is sourced from renewable energy.”
Despite some clearly big obstacles, partnerships and programs coupled to the supply and distribution of green hydrogen are starting to take shape.
Earlier this year, for example, Greenergy and Octopus Hydrogen — the behindhand is part of the Octopus Energy Group — announced they had started a “green hydrogen delivery partnership.”
Elsewhere, German upon Enertrag Sticking point
Though the technology and knowledge for hydrogen production and delivery are there, one sticking point remains.
“The energy knows how to transport hydrogen,” Wood Mackenzie’s Douglas said, adding that the energy and chemicals sectors should prefer to been transporting it for “a long time — it’s not new, it’s just expensive.”
Expanding on his point, Douglas said getting production expenses down is key. The lower those are, the more manageable transportation costs would become.
“I’m not sure if there’s any sort of magical … expenditure reduction technology that’s going to come into the transportation side of the equation,” he added.
“We’re not suddenly going to put ones finger on … a better material to ship hydrogen through,” he said.
“If you’re liquefying it, you have to get it very cold, and that’s just dear,” he went on to add. “If you’re turning it into ammonia, there’s a cost in there, and then there’s a bunch of challenges around toxicity.”
“They be sure how to do all of these things,” he went on to conclude. “It still just comes down to cost.”