BLOG 1- THE GREEN HYDROGEN PROMISE

Hydrogen is becoming the world’s most promising energy source. Countries and organizations around the globe are racing to adopt it yet, its economic development presents enormous hurdles, risks and nuances, developers, investors, and our population alike should be informed about.

Let’s start with some definition and answering important questions.

Hydrogen compared to Ammonia.

Green ammonia refers to ammonia that is produced using renewable energy sources, such as solar, wind, or hydroelectric power, to generate hydrogen through electrolysis. This renewable hydrogen is then combined with nitrogen from the air using the Haber-Bosch process to produce ammonia.

Ammonia (NH3) is a compound consisting of nitrogen and hydrogen. It is commonly used in fertilizers, chemicals, and various industrial applications. Ammonia has several properties that make it a promising candidate for use as a fuel or energy carrier.

Green ammonia production emits little to no carbon dioxide (CO2), making it environmentally friendly and sustainable. Both hydrogen and ammonia can be burned as fuels.

Chemically speaking, when burned, hydrogen reacts with oxygen to produce water vapor (H2O) as the only byproduct, making it a clean fuel. Ammonia combustion produces nitrogen oxides (NOx) and water vapor as byproducts. The main difference is in their chemical compositions and combustion characteristics: hydrogen consists of two hydrogen atoms (H2), while ammonia consists of one nitrogen atom and three hydrogen atoms (NH3).

It is vital to point out that, while green hydrogen and/or ammonia production itself is renewable and emits minimal or no CO2, the combustion of green hydrogen and/or ammonia as a fuel still results in emission of CO2.

In the scenario of converting a coal-fired power plant to run on ammonia as the primary fuel source, the emissions profile of the power plant would indeed shift. While the use of ammonia may reduce emissions of sulphur dioxide (SO2) and particulate matter compared to coal combustion, CO2 emissions would still occur due to the combustion of ammonia.

Therefore, it’s essential to recognize that while green ammonia production contributes to reducing overall greenhouse gas emissions by displacing fossil fuel-based ammonia production, combustion of ammonia as a fuel source does not eliminate CO2 emissions entirely.

To achieve significant emissions reductions in the power generation sector, it may be necessary to implement additional measures such as carbon capture and storage (CCS) or transition to truly carbon-neutral or carbon-negative energy production.

Current and Projected Volumes

Hydrogen is currently used in various industries, including ammonia production, the refining industry, methanol production, petrochemical industries, steel production, electronics and semiconductors manufacturing, and food processing industries totally approximately 70 million metric tonnes per year. If all cars and power plants operating on diesel, oil and gas were converted to green hydrogen from one day to the other, the demand for green ammonia would be approximately 407 million metric tons per year. If we assume all this green hydrogen is produced with photovoltaic power plants alone, we would require 285.000 TWh of energy or in other words, a total of 162.350 MWp of installed capacity. This means, we would require 70.000 Km², an area larger than Ireland, or the state of West Virginia.

If we were to convert all the coal fired power plants to green ammonia or green hydrogen power plants, we would need to add the earlier number, another 18.67 million metric tons of green hydrogen.

The sum does not seem like an impossible amount yet assuming an average solar power plant across the globe is 5MWp large, we would require a total of 32.470 power plants.

Definitions

Most of today’s hydrogen is non-environmentally friendly and hence not green since it originates from non-renewable sources but emits carbon dioxide during production.

Hydrogen today:

1. Grey Hydrogen: The most commonly produced hydrogen today is grey hydrogen, which comes from fossil fuels, mainly natural gas through a process known as steam methane reforming (SMR), producing carbon dioxide that contributes to the emissions of greenhouse gases.
2. Blue Hydrogen: There is hydrogen production, of carbon capture and storage (CCS) technology employed by some facilities that result in blue hydrogen to cut emissions. Although this reduces emissions, it still relies on fossil fuels and does not address the root cause of emissions whilst storing the exhaust gases is unreliable.
3. Green Hydrogen: It is produced via electrolysis where electricity obtained from renewable sources like solar or wind is utilized to separate water molecules into hydrogen and oxygen. Green hydrogen has no emissions and can help decarbonize many sectors.

Hurdles and risks

1. Cost: The current cost of green hydrogen production is far higher compared to grey or blue hydrogen due to the highest cost of renewable electricity and electrolyser technologies. It is important that the costs are reduced to make it competitive with other forms.
2. Scaling Infrastructure: To develop the infrastructure required for green hydrogen production, storage and distribution need huge investments and coordination. This will entail constructing electrolysis plants, pipelines for hydrogen storage tanks and refuelling stations.
3. Technological Challenges: There is a need for further development of Electrolysers in terms of efficiency, durability and cost effectiveness while ensuring reliable low-cost supply of electricity through renewable energy technology.
4. Policy and Regulation: policies have to be clear and consistent when dealing with these issues as green hydrogen technologies needs enabling framework which includes incentives, mandates, carbon pricing standards aimed at attracting investment as well as stimulating market growth.
5. Market Acceptance: Convincing industries to adopt green hydrogen over existing fossil fuel-based technologies may require overcoming inertia, perceived risks, initial investment costs, etc.

Nuances for Developers and Investors

These are a few of the most important nuances developers and investors will need to overcome to develop competitive green hydrogen plants.

1. Partnerships and Collaboration: Collaboration between governments, industry players, research institutions, and financiers is crucial to drive innovation, share risks, and accelerate the development of green hydrogen technologies.
2. Risk Management: Developers and investors need to carefully assess and manage risks associated with technological developments, market demand, policy changes, and competitive pressures.
3. Long-term Vision: Investing in green hydrogen requires a long-term perspective due to the significant upfront capital costs and the time required to develop infrastructure and establish market demand.
4. Diversification: Diversifying investment portfolios across different stages of the value chain, from production to distribution and end-use applications, can mitigate risks and capture opportunities in the evolving hydrogen market.

In conclusion, while green hydrogen holds immense promise for decarbonizing various sectors and transitioning to a sustainable energy future, realizing this potential requires overcoming significant hurdles and risks. Developers and investors need to navigate these challenges effectively, leveraging partnerships, innovation, and supportive policies to drive the transition towards a hydrogen economy.