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Green hydrogen stakeholders were forced to undergo yet another round of reality checks last year. Costs remained stubbornly high with no sign of a quick turnaround, and buyers were running for the hills. This year promises more of the same. However, not everyone is ready to give up the green hydrogen ghost just yet.
The High Cost Of Green Hydrogen
Despite some progress on the cost-cutting end, the rule of thumb remains at the un-competitive price of $5.00 per kilogram for green hydrogen, compared to just $1.00/kg for conventional hydrogen extracted from natural gas. Factor in transportation and storage costs, and costs shoot up even farther. Some analysts don’t see much of a change forthcoming in the near future.
A representative study from the Potsdam Institute for Climate Research lays out the obstacles in store for the global green hydrogen industry, including “a lack of willingness to pay on the demand side and uncertainties about future subsidies and regulation.” The study, published earlier this week in the journal Nature Energy, explores solutions to the “implementation gap” issue, meaning that many projects have been proposed, but very few have made it to the shovels-in-the-ground stage.
Of course, government subsidies could get more stalled projects in gear and attract more off-takers, but the Potsdam research indicates that subsidies are not a realistic solution.
“Enormous additional subsidies of around one trillion US dollars would be required to realise all announced hydrogen projects by 2030,” explains the Potsdam Institute. Describing that figure as unattainable, the researchers propose deploying demand-side quotas to get things moving.
Also helping things along would be a steep drop in the high cost of the iridium oxide catalyst used in electrolysis systems, which push hydrogen gas from water. That’s not likely to happen any time soon. Iridium is a rare and precious metal far more costly than gold.
Pushing The Cost Of Green Hydrogen Down
If pushing down the market price of irdium is a bridge too far, researchers are doing the next best thing. They are finding ways to reduce the amount of iridium needed for an efficient electrolysis system. Among the work ongoing in that area, a research team from the University of Oklahoma has just published a study describing how a more efficient form of iridium oxide could be synthesized, significantly reducing the amount needed.
On the private sector side, the Swedish firm Smoltek Nanotech Holding is among those developing low-iridium electrolysis. The company states that it can reduce the need for iridium by up to 95%, compared to conventional electrolyzers.
Cutting iridium completely out of the picture is also in the works. Researchers at MIT and Illinois Tech, for example, are collaborating on a new catalyst that deploys a metal organic framework consisting of nickel, cobalt, and iron.
US Wants More Hydrogen, STAT
Research efforts like these are years away from jumping over into the commercial market, if ever. In the meantime, it’s not difficult to find news about would-be green hydrogen producers jumping ship as the cost issue refuses to go away. An ambitious electrolysis project in Texas, for example, lost a key stakeholder in November when the firm Air Products pulled out, reportedly citing the absence of an off-taker. The company still has projects under way elsewhere, though.
Despite the rocky road, key nations around the globe have already set the wheels in motion to establish green hydrogen hubs or “valleys.” Here in the US, the Biden administration has overseen the creation of the new $7 billion Regional Clean Hydrogen Hubs program. Funded through the 2021 Bipartisan Infrastructure Law, the program includes a carve-out that supports a measure of conventional hydrogen produced from natural gas. However, most of the focus is on diversifying the hydrogen supply chain including biomass as well as water electrolysis.
Last year the US Department of Energy tapped seven regional partnerships to qualify for funding under the program. In the waning days of the Biden administration the agency is also lending a hand to private sector partners through the Energy Department’s Loan Programs Office. The US hydrogen and fuel cell startup Plug Power is the latest to nail down funding.
On January 16, Plug announced that it has closed a $1.66 billion loan guarantee from the Loan Programs Office, with the aim of financing up to six hydrogen projects in the US. The terms of the loan don’t limit Plug to water electrolysis, but the company has made green hydrogen the centerpiece of its business model.
Plug Power is not letting the green hydrogen grass grow under its feet. The company already has plans in the works for a water electrolysis facility in Graham, Texas, to be powered by a wind farm right next door. Additional hydrogen facilities are located in Georgia, Tennessee, and Louisiana.
The Green Hydrogen Economy Of The Future Is Here, Eventually
Hydrogen is ubiquitous throughout the developed economies of the world, as an input for fertilizer as well as refining, metallurgy, and pharmaceuticals among other industries. Hydrogen is also a zero emission fuel for fuel cells, though its application to electric cars has proved rather limited to date.
Hydrogen advocates see more promise in heavy-duty uses, where long-lasting power is a prerequisite. That area, too, has been slow to develop. The US startup Nikola, for example, has been hammering away at the fuel cell truck market for more than 10 years (see more Nikola background here).
Some activity is beginning to stir in the US. The west coast states of Washington, Oregon, and California, for example, have reserved a role for heavy duty hydrogen fuel cell trucks in their efforts to decarbonize the all-important coastal freight corridor, with an assist from funding through the Regional Clean Hydrogen Hubs program.
Keep an eye on Texas, where the US hydrogen infrastructure firm Hyroad Energy has just earned funding from the state’s THIVE hydrogen support program. The funds will cover a new fleet of 28 Class 8 fuel cell trucks, to be up and running within the next two years.
No word yet on whether or not green hydrogen will play a role in the Hyroad program, or where they are getting the trucks from. I’ve reached out to the company to see if any details are available, so stay tuned for more on that.
Circling back around to Plug Power’s electrolysis facility in Texas, the state may seem like an odd place for green hydrogen stakeholders to set up shop, considering that Texas is home base for powerful fossil energy stakeholders. Still, Plug Power is not the only green hydrogen stakeholder to spot an opportunity.
Last September the firm HNO International announced that it will be supplying green hydrogen to a fleet of class 8 fuel cell trucks in Texas, deploying a new 1.25-megawatt electrolysis system capable of delivering up to 500 kilograms of green hydrogen per day. HNOI will also provide a fueling station for the program.
I’m checking to see if there is any intersection with the Hyroad program, so stay tuned for more on that as well.
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Image: The US green hydrogen firm Plug Power has just nailed a $1.66 federal loan guarantee towards the goal of building up to six hydrogen hubs around the country (courtesy of US DOE).
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