hydrogen viability triangle
Hydrogen, Commercial Now. Part 1 – An Overview

Part 1: The drivers of commercial viability

This is the first part in a four-part series looking at the commercial competitiveness of hydrogen. To help us in this review we are going to be looking at a very helpful chart in the recent report titled “Path to Hydrogen Competitiveness”(1) released by the Hydrogen Council at the end of January. It visualises the competitiveness of hydrogen against incumbent solutions as well as other low-carbon solutions.

In the debate that often surrounds the validity of hydrogen as an energy storage mechanism, hydrogen is usually evaluated in a binary manner: all in, or all out. However, as with most things, it isn’t black and white. The Hydrogen Council’s report nicely addresses those who would say hydrogen has no relevance, or indeed those who might say it is the only route forward. This series builds on the report and will cover the following:

  1. In this first instalment we provide an overview of the factors driving competitiveness.
  2. In the second instalment we take a closer look at scenarios where hydrogen is the best answer (the top right quadrant of the Hydrogen Council’s chart).
  3. In the third we will review at the transition cases, where things must be evaluated on a case-by-case basis (the intersections between quadrants).
  4. And lastly, we consider cases where hydrogen is either the right low-carbon answer but it might cost more than incumbent solutions, or where hydrogen probably isn’t the right answer (left two quadrants).

Where is hydrogen the best answer?

Hydrogen is most competitive where an asset is highly utilised, consuming a large amount of energy, and mobile. Put simply, the competitiveness of hydrogen is driven by 3 factors:

  • Level of asset utilisation
  • Volume of energy required
  • Mobility or ‘off-grid’ nature of the application

Where these factors are high, hydrogen is competitive. As the level of any one of these drops, then the competitiveness of hydrogen also starts to drop. If you lose one of those factors altogether then the chance that hydrogen is best solution, starts to really become questionable and it will come down to the specifics of each scenario.

These specifics will of course include cost, and hydrogen availability but the viability will also come down to other operational factors for which hydrogen could be the answer. For example, is having a silent source of power important, or low to zero NOx? Is having zero vibrations a benefit, or being able to store energy for long periods of time without any decrease in the volume of energy stored? Maybe low maintenance is key. All of these will affect specifics of design and viability of hydrogen v.s. other solutions.

Where hydrogen will always win, is when you combine those three factors. Let’s consider what we mean by each factor.

Asset utilisation: It might seem obvious, but this is where the asset you are powering is in high demand. It can’t take breaks. You need to be able to provide an energy source that can continuously be refilled / recharged. This tends to mean a liquid or gas fuel, or a physical connection to an electric supply. E.g. waiting for batteries to re-charge isn’t an option.

Volume of energy: The total amount of energy required is large and thus you need either an energy dense storage medium or you need to have a large continuous supply. Here we are typically starting to talk in MWhs of stored energy. It is volumes of energy where if you were to use solar panels you would need fields of them, or if looking to batteries they would be the size of sheds.

Mobility or ‘off-grid’ energy: This refers to scenarios where energy must be moved from one location to another, the asset is mobile, or energy must be provided where there isn’t a grid connection. The most obvious applications are those in mobility and transport. Other scenarios include providing power in remote locations, generators for construction in a city centre, or a music festival in a field such as Glastonbury.

Hydrogen as a feedstock

This model, and the focus of this blog series, covers scenarios where hydrogen is used to store energy. The model does not apply when hydrogen is a feedstock to industrial processes or product manufacture. For example, in the production of ammonia for fertilisers. As Exhibit 5 in the Hydrogen Council report cover both it is worth summarising what drives competitiveness for these cases.

The only way to reduce the carbon footprint of the hydrogen for feedstock applications, is to consider different sources of hydrogen. Competitiveness comes down to how the hydrogen is produced. The low-carbon choices are between hydrogen produced via; renewable energy driven electrolysis, or steam methane reforming with carbon capture. It is therefore the availability and cost of carbon capture vs. the cost of electrolysers and renewable energy, that ultimately drives the total cost for each.

Summary

In summary the Hydrogen Council report and specifically Exhibit 5 highlights the importance of the above three factors in governing why and where hydrogen makes sense. They show that there are places where hydrogen is a better solution than existing conventional options and competing low-carbon technologies.

In the next instalment…

We will be looking at the applications where all three of these factors come together and means hydrogen is the most competitive solution. Additionally, we will add a few applications to those covered by the Hydrogen Council report.

References:

  1. Hydrogen Council “Path to Hydrogen Competitiveness”; https://hydrogencouncil.com/wp-content/uploads/2020/01/Path-to-Hydrogen-Competitiveness_Full-Study-1.pdf

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