Decarbonization efforts driving low-carbon hydrogen solutions in US, globally

Despite challenges such as transportation costs, hydrogen markets are expected to grow over the next couple of decades for power generation and transportation applications, experts said Nov. 10.

"Interest in hydrogen has skyrocketed this year," Andrew Moore, managing editor of the hydrogen desk at S&P Global Platts and conference chairman, said during the Hydrogen Markets Americas Virtual Conference.

"Hydrogen has a rich history as an industrial gas, but as the world races to decarbonize to meet its emissions targets, hydrogen's potential as a zero- or low-emissions replacement for fossil fuels is transitioning hydrogen from conceptual technology to steel in the ground," Moore said.

The energy transition is likely to impact all sectors, with transportation likely an early mover followed by expansion into power generation, materials production, heating and eventually even aviation, he said.

Hydrogen can be produced with energy from wind, hydropower, tidal power, solar, natural gas, nuclear and the list goes on, said Sandra Safro, partner at law firm K&L Gates and moderator of a panel on hydrogen market development.

Applications for hydrogen are "impressive and growing," including power generation, energy storage, a replacement for coke in steel manufacturing, road vehicles, rail, marine vessels and even aircraft and aerospace applications, Safro said.

Developing new markets

While there have been long-standing markets for hydrogen where demand for it has been dominated by its input for ammonia production and refining, and hydrogen has been mostly produced from natural gas, the decarbonization push is creating space for new low-carbon markets, said Zane McDonald, lead hydrogen analyst at S&P Global Platts Analytics.

In 2019, roughly 74 million tons of pure hydrogen were consumed globally, he said, and 25% of the pure hydrogen produced in 2018 was from coal with about 75% sourced from natural gas, which spurred just over 200 Bcm/year of gas demand.

"We believe the role of natural gas in hydrogen is going to exceed past the fossil hydrogen markets we see today and into the integrated global low-carbon markets of the future," McDonald said, citing a need to commercialize carbon capture and storage technology.

Another primary hydrogen production pathway is electrolysis or using power to split water molecules into their constituent hydrogen and oxygen.

Over the past nine months there has been an explosion of proposed projects using electrolytic capacity primarily in Europe and driven by national capacity targets, McDonald said.

Over the past nine months, France announced a target for 6 GW of capacity by 2030, Germany with a 5-GW target, the Netherlands with 4 GW of targets, Spain with 4 GW of targets and the European Commission with a 40 GW capacity target, he said.

However, Platts Analytics has done some deep dives into hydrogen transportation costs and whether one is looking at hydrogen pipelines, liquefied hydrogen trucking or gaseous hydrogen trucking, moving hydrogen from its origin to its destination can account for 50% to 85% of the rack price for a kilogram of hydrogen, McDonald said.

Globally and in the US, there will be growing demand for greenhouse gas reducing technologies, and low-carbon hydrogen can be a big piece of that growth, said Morry Markowitz, president of US-based trade group the Fuel Cell and Hydrogen Energy Association.

Low-carbon hydrogen can be produced from electrolysis powered with clean energy, reformer-based hydrogen with carbon capture or renewable natural gas, direct gasification of waste or byproduct hydrogen recovered from other industrial processes, Markowitz said.

US forecast

"We see hydrogen usage going from 11 million metric tons to 14 million metric tons by the end of this decade" in the US, he said.

But there is lots of work to do to get there, along with a need for federal, state and local incentives, he said. The effort will need to encompass multiple sectors, like providing energy for data centers and replacing diesel generation sets that have been used for generations as backup power, Markowitz said.

Ultimately, Markowitz is bullish on hydrogen technologies because he sees them as superior products to many incumbent power generation and transportation resources.

Similar to the way flat screen televisions pushed tube TVs out of the market, he sees electric and fuel cell vehicles catching on over time and pushing out their fossil fuel-based counterparts as costs come down.