Energy Transition and The Power of Hydrogen To Achieve Net Zero
Energy Transition and The Power of Hydrogen To Achieve Net Zero
Energy transition
and the power of
hydrogen to achieve
net zero
A white paper in conjunction with
Energy transition and the power 2
of hydrogen to achieve net zero
Introduction
carbon capture and storage or CCS) • Which applications are most likely to be early adopters
of clean hydrogen.
or ‘green’ (produced with renewable
• What types of clean hydrogen are most likely to emerge
energy via electrolysis), is still rare
in different markets.
and expensive.
• How one community is already moving along the path
toward a hydrogen economy.
Energy transition and the power 3
of hydrogen to achieve net zero
Energy transition and the power 4
of hydrogen to achieve net zero
The main challenge facing wide-spread two times more than gray hydrogen,
clean hydrogen adoption today is cost. according to Krish Krishnamurthy,
Hydrogen is already produced cheaply director of clean hydrogen technologies
on a global scale for industrial use, but R&D at Linde. And green hydrogen can
it doesn’t live up to its full potential of cost up to three to five times more than
low-carbon fuel. Almost all production gray, at current renewable energy and
today involves steam methane reforming electrolysis system costs. For clean
of natural gas, in which case the product hydrogen right now, “the economics are
is ‘gray ’ or the gasification of coal or challenging,” Krishnamurthy says.
lignite, which yields ‘brown’ hydrogen.
The latter is associated with significant But that could change. In particular,
levels of carbon emissions. higher carbon pricing could make gray
hydrogen more expensive and at the
Reducing those emissions is challenging same time provide a financial incentive
from a cost perspective. Producing to add CCS to steam methane reforming.
blue hydrogen involves adding Carbon For this to happen, carbon prices would
Capture and Storage (CCS) to a steam have to rise to around USD$100 per
methane reforming system, which makes ton, Krishnamurthy says. Furthermore,
it more expensive, and sequestration widespread adoption, increase in scale
is not always a viable solution as and further efficiency improvements will
acceptable sequestration sites may be critical in driving costs down over the
not be available. And green hydrogen next decade.
depends on having an abundant supply
of low-cost renewable energy plus cheap But in regions such as Europe, where
electrolysis technology. While renewable natural gas prices are already high,
electricity and electrolyzers are getting renewable electricity costs are dropping
cheaper, there is still some way to go. and there is upwards pressure on carbon
pricing, “we think that the transition to
The result is that blue hydrogen green can happen sooner,” he says.
can currently cost one and a half to
Energy transition and the power 5
of hydrogen to achieve net zero
Production is only part of the clean hydrogen cost pressure transportation of pure hydrogen by pipeline is
equation. Once it has been made, the hydrogen needs done safely and efficiently today – we are well-versed
to be taken to where it will be used and this can add at this, since we’ve been operating roughly 1,000km of
significant expense, says Andreas Rupieper, managing hydrogen pipeline for quite some time.”
director of ITM Linde Electrolysis.
The potential for cost-effective, long-distance clean
Traditionally, he says, “you have a complex value hydrogen transport in Europe, at least, was discussed at
chain after the molecule is produced. It needs to be length in April 2021 when 12 European gas transmission
conditioned to certain pressure levels or liquefied to be system operators revealed plans for a 39,700 km
filled into a trailer.” European Hydrogen Backbone (EHB) to be completed
by 2040. Around 69% of the network would come from
Trailers can transport the hydrogen by road over long repurposing existing natural gas grids.
distances, but once the hydrogen is delivered to a
customer site, it still needs to be stored and then “Transporting hydrogen over 1,000 km would on average
processed via vaporization or pressure reduction before cost €0.11-0.21 per kg of hydrogen, making the EHB
it can be used. All this adds to the cost of the fuel. But a cost-effective option for long-distance hydrogen
there are two ways these costs can be reduced. One transportation,” says industry consortium Gas for
is by producing the hydrogen on-site. The other is to Climate in a press release. 1
distribute it via pipeline and using existing natural gas
networks might be a way to do this. Another consequence of the cost of transporting
pressurized or liquified hydrogen is that in places where
Concerns are frequently voiced about injecting hydrogen there is no pipeline access, such as Australia, it may pay
into existing natural gas networks, namely around to use the fuel as an industrial feedstock rather than
compatibility and the impact on natural gas combustion exporting it abroad. Australia is currently studying the
characteristics. However, says Krishnamurthy, “this production of clean hydrogen for export markets but
should not be an issue for hydrogen concentrations of could find it more financially rewarding to use it instead
up to 10-15%. There is past experience and recent pilot for the manufacture of other low-carbon products, such
validations in injecting hydrogen at low concentrations as steel or ammonia, if they could command a premium
into natural gas pipeline supply. Furthermore, high- overseas.
Energy transition and the power 6
of hydrogen to achieve net zero
David Burns, Vice President Linde Clean Energy, sees • Power-driven use cases: an increasing penetration
half a dozen potential applications for clean hydrogen, of renewable energy generation sources is creating
in descending order of adoption, starting with the ones a demand for buffering and storage options on grids
that are already viable today. These are: in Europe, Australia and parts of the US. Clean
hydrogen can replace gas for these applications.
• Transportation and mobility: hydrogen is already
vying with batteries for decarbonization of the • Chemical processes: many chemical industries rely
automotive sector, and when it comes to segments on hydrogen, but these are highly commoditized
such as long-haul road transport or shipping the and thus may take longer than other segments to
fuel has a clear advantage. embrace higher-priced clean supplies of the gas.
• Secondary industry on-site users: because of the • Steelmaking: we see steelmaking becoming a
costs of transport (see above), there is a strong much bigger user of hydrogen in the future, as the
financial incentive for industries that require steelmaking sector has committed to cutting its
relatively low volumes of hydrogen, such as carbon footprint. We expect more widespread use of
semiconductor manufacturers, to make clean the Direct Reduction of Iron (DRI) technology in this
hydrogen on site. sector, which uses hydrogen as a feedstock. But the
commoditized nature of the industry and the long-
• Regulation-driven use cases: in regions such as
time horizon for decarbonization mean it could be
Europe, large carbon emitters such as oil refineries
one of the last sectors to realize its full potential.
are under growing pressure to cut emissions and
could start adopting clean hydrogen to help meet Building heating: replacing natural gas with hydrogen
regulations such as Europe’s Renewable Energy could result in a significant decarbonization of this
Directive II. sector and goes hand-in-hand with conversion of natural
gas grids.
Energy transition and the power 7
of hydrogen to achieve net zero
Pathways to profitability
As noted above, green hydrogen can currently be two In markets where there is an excess of cheap natural
or three times more expensive than blue. Michael gas and plenty of space for carbon storage, it may
Schäffer, head of hydrogen and syngas plants at make sense to produce blue hydrogen. Conversely, if
Linde Engineering, says “That does not necessarily a market has plentiful, cheap renewable energy and
mean, however, that blue hydrogen will always take high carbon pricing but little natural gas, then green
precedence over green as the world moves towards hydrogen production would be a better option. These
low-carbon energy systems.” Rather, the choice factors suggest that clean hydrogen production may be
of whether to develop blue or green hydrogen in a strongly tinged by regional markets.
given market will likely depend on a range of factors,
Blue hydrogen, for example, is likely to be the best
including:
choice for markets such as the Middle East, Russia
• Availability of carbon sequestration options. and the US Gulf Coast, while green could be favored in
Australasia, Europe or Latin America.
• Renewable energy costs and capacity.
• Cost and availability of natural gas.
• Carbon pricing.
Energy transition and the power 8
of hydrogen to achieve net zero
Case study: a
hydrogen economy
in the making
While for the most part the debate about clean hydrogen
is focused on future opportunities, in Aberdeen, Scotland,
a transition to the fuel has been underway for more than
half a decade. The city council commissioned industrial
gas leader BOC, a Linde company, to install and operate
a hydrogen bus refueling station at Kittybrewster as
part of the government’s Road to Zero vehicle emissions
reduction strategy.
“The initial motivation for this was the oil and gas
industry, which has sustained Aberdeen but is now
declining,” Bell says. “What’s the next wave that we can
jump on? Hydrogen, clearly. I think many skills could be
transferred. This is the go-to place for hydrogen.”
Energy transition and the power 9
of hydrogen to achieve net zero
The economics of clean hydrogen today mean that its The heavy-duty transportation sector, including trucks,
practical use is limited. But the picture is changing buses, trains and ferries, is already primed to use
rapidly as nations and organizations quicken the pace to hydrogen as an alternative fuel, according to David
achieve net-zero emissions. At the same time, Burns, vice president of clean energy at Linde. “Cars
hydrogen is one of several low-carbon assets and so it make a lot of sense with batteries,” he says, “but when
is likely “there will be applications for specific cases, you get to the heavy commercial sector you want
for specific regions,” says Michael Schäffer, head of range—800 to 1,000 km—and when you fuel it you want
hydrogen and syngas plants at Linde Engineering. to do it in 15-20 minutes, just the same as you do with
diesel today.”
Graham Cooley, CEO of ITM Power, believes clean
hydrogen will be key to global decarbonization efforts. With all this, it is safe to say that even if clean hydrogen
For example, he says: “The building block for the whole ends up achieving a fraction of its overall potential it
of chemistry is methanol. Traditionally you make that will have still gone a long way towards achieving energy
from natural gas. But if you capture carbon dioxide and decarbonization. Rather than being over-hyped, it is
combine it with renewable hydrogen you have a route to possible clean hydrogen is not being hyped enough.
renewable chemistry.”
Energy transition and the power 10
of hydrogen to achieve net zero
References
i
G as for Climate press release, April 13, 2021: European Hydrogen Backbone grows to 40,000 km, covering 11 new
countries. Available at https://gasforclimate2050.eu/news-item/european-hydrogen-backbone-grows-to-40000-
km/.
ii
L inde Kryotechnik AG website, 2021: Hydrogen liquefiers. Available at https://www.linde-kryotechnik.ch/en/
products/hydrogen-liquefiers/.
iii
B OC company blog, December 17, 2019: Aberdeen and BOC leading the way to zero emissions public transport.
Available at https://blog.boconline.co.uk/aberdeen-and-boc-leading-the-way-to-zero-emissions-public-
transport/.