Why Green Hydrogen has become the Next Big Thing in Clean Tech

Solar and Wind energy have been the poster boys of renewable energy and remain key elements of clean energy, but both of them suffer from the Achilles heel of intermittency and variability. The lack of 24/7 power from these RE sources gives a long stick with which climate change skeptics have always beaten renewable energy. Even though the costs of both solar and wind energy have fallen below that of fossil fuels even without subsidies, the lack of firm power means that they still have not grown to their potential. Storage options have not really scaled up though lithium batteries have started to become a real option in the last couple of years for transmission-level storage. Now Hydrogen has entered the scene in a big way. The technology for hydrogen has always existed for a long time and fuel cell powered vehicles have been in the green scene for the last 10-15 years but have remained more or less a niche technology. Hydrogen currently is mostly used as an industrial feedstock and manufactured from fossil fuel sources which means that it is not really very clean.

Image Credit: FuelCellsWorks

However, the dramatic fall in the costs of solar and wind energy and the projected even lower costs in the future implies that producing hydrogen through RE will become extremely cheap in the future. This means that Hydrogen can be used in a plethora of ways most of which are currently uneconomical. Some of the largest wall street firms now predict that Hydrogen will become the next big industry of the future with BOA predicting a USD 11 trillion hydrogen market by 2050. Besides power, Hydrogen will also allow RE to penetrate segments of the economy where it is almost non-existent. Hydrogen can be effectively used in heating and transportation since it acts as a natural gas substitute without carbon emissions. Hydrogen can also provide the storage option that RE requires in order to become around the clock energy supplier.

New applications of Hydrogen are already being piloted with Airbus planning to bring hydrogen-based planes by 2025 and new trade linkages being planned around this fuel. Germany and Australia have already decided to seriously look at exporting hydrogen produced from clean energy from Australia to Germany through large ship-based tankers. Blue Hydrogen is already being exported from Saudi Arabia to Japan and this will see exponential growth in the future. Green Hydrogen which is hydrogen produced through the electrolysis of water through energy supplied from green energy sources can help decarbonize major chunks of the economy such as heating/cooling, industries as well as transportation. The existing gas networks and fuel stations can easily be retrofitted from the existing natural gas to hydrogen.

While the current costs of green hydrogen are higher, they will become cheaper. Green hydrogen costs between $2.50 and $4.50 a kilogram due to the high price of renewable energy electrolysis. It needs to go below $1 for green hydrogen to become competitive with the low-cost hydrogen made from fossil fuels.