Few energy-related topics are getting as much attention at the moment as green hydrogen.
Europe's biggest natural-gas infrastructure firm recently launched a new hydrogen business. A hydrogen economy in the U.S. could generate an estimated $140 billion per year in revenue and support 700,000 jobs by 2030, according to a recent McKinsey study published by the Fuel Cell and Hydrogen Energy Association.
Despite current high costs and handling problems, there are many potential applications for green hydrogen once production starts to scale.
As for which ones might take off first, “we and others around the world have spent a lot of time thinking about and performing analysis to answer this very question,” said Keith Wipke of the National Renewable Energy Laboratory’s fuel cell and hydrogen technologies program.
Based on research from NREL, McKinsey and others, here are five major opportunities for the fuel, as well as some of the attendant challenges.
1. Replacing existing hydrogen feedstocks
Perhaps the most obvious use for green hydrogen is to simply replace the large amounts of the gas that are already produced using carbon-intensive methods to satisfy the needs of industry. Based on International Energy Agency figures, 38.2 million metric tons (MT) of hydrogen were used for oil refining in 2018; another 31.5 MT went toward ammonia production.
Steelmaking is another potential target for green hydrogen, with several organizations developing direct reduced iron processes that use the gas to remove oxygen from ore, according to NREL.
In 2015, the total U.S. hydrogen feedstock market amounted to 10 MT, and McKinsey estimates this could rise to between 13 MT and 14 MT by 2030.
Decarbonizing residential and commercial heating systems is a major challenge in countries that currently rely on natural gas to do the job. One immediate — albeit partial — answer to the problem is to mix green hydrogen into natural gas to reduce the latter’s carbon content.
But this is only likely to be worthwhile in places where natural-gas prices are relatively high, such as in Europe. And there are limits to how far you can go.
“Blending up to 20 percent hydrogen (on a volume basis) is likely to be feasible for natural-gas applications, although not all natural-gas pipeline systems are constructed of materials that can withstand that concentration,” said NREL researchers in an article published in August.
3. Energy storage
A much-vaunted use of green hydrogen is to use it for electricity production via fuel cells. But there are significant challenges to overcome.
If the hydrogen is produced from renewable energy via electrolysis, the AC-to-AC round-trip efficiency falls to around 35 percent, far below the 95 percent efficiency that can be achieved with batteries.
Nevertheless, an NREL study published earlier this year found it would make financial sense to use green hydrogen for energy storage applications with a duration of 13 hours or more — and that’s using today’s technology.
4. Alternative fuels
Although it's used widely for industrial purposes, scaling up hydrogen production for a wider range of applications poses challenges relating to distribution and storage.
One way to get around these is to convert the highly volatile and flammable gas into a slightly more malleable fuel such as ammonia or methane. Since energy would be lost in this conversion, however, it would likely only be worth doing where the value of the resulting product is relatively high.
Hence, says NREL, “Market opportunities are likely to be driven either by a desire to use carbon dioxide or by the ability to tailor specific products that may be difficult to produce directly from natural gas.”
5. Fuel-cell vehicles
Powering fuel-cell vehicles is one of the most often-cited applications for green hydrogen. But it remains to be seen whether fuel-cell vehicles can gain traction as automotive markets flip from internal combustion engines to increasingly cost-competitive battery-powered cars.
“In the next 10 years, there’s probably more attractive uses for green hydrogen than putting it into cars,” said Colin McKerracher, head of advanced transport at the analyst firm Bloomberg New Energy Finance.
The exception might be in specialist transportation areas such as heavy-duty trucking or forklifts. McKinsey estimates there is an immediate market for 25,000 forklift trucks and other material-handling fuel-cell vehicles in the U.S., compared to just 7,600 hydrogen-powered cars on the road.