We are back with another dose of answers to the most frequently asked questions about hydrogen and its use in the global economy.
We know that despite its growing popularity, the topic of “fuel of the future” continues to raise numerous and, no doubt, legitimate questions. Let us today try to answer another one of them, taking a closer look at the advantages and disadvantages of the new fuel.
4. What are the benefits of using hydrogen as a fuel?
The numerous benefits of hydrogen, especially in the areas of transportation, industry, and energy, are extremely important from the perspective of sustainable development and fuller use of renewable energy sources, which go hand in hand with EU regulations and the goals set under the 2015 Paris Agreement.
What are the benefits?
- Performance
One example that illustrates well the efficiency of hydrogen fuel is transportation. Hydrogen fuel cells have a higher efficiency than traditional internal combustion engines. This allows more energy to be obtained from the same amount of fuel.
Also, in comparison with BEVs, hydrogen manifests high efficiency. Passenger FCEVs achieve an average range of more than 600 kilometers on a single refueling, with an average range for battery vehicles of 100-150 kilometers. It should be noted that this range can be much higher, as evidenced by the record set in 2021 by the Toyota Mirai, which covered 1,360 km in Southern California. Correspondingly for fuel cell buses, the average range exceeds 350 km.
- No emissions
Unlike conventional fuels, burning hydrogen does not emit carbon dioxide and other harmful substances into the atmosphere. Hydrogen is a clean carrier, and the only products of combustion are energy and water. Thus, it does not contribute to the deterioration of air quality and the environment.
It should be remembered, however, that to talk about the total zero-emission of hydrogen fuel, we must consider its source. A fuel that guarantees zero emissions at all stages, including production, is green hydrogen produced from RES electricity by electrolysis of water.
That’s why we at SES Hydrogen Energy are developing hydrogen generators that will enable the production of clean fuel for the decarbonization of the economy.
- Diversification of energy sources
The use of hydrogen as a fuel makes it possible to diversify energy sources, reducing dependence on fossil fuels, which are characterized by limited resources and uneven geographic distribution of deposits, resulting in dependence on imported raw materials.
As a result, it is a major threat to the energy security of countries and companies, due to the instability of supply and strong market fluctuations in a conflict and volatile geopolitical situation, as exemplified by the armed conflict in Ukraine. Its effect was a dynamic increase in fuel and energy prices in Europe in late 2021 and 2022.
Not surprisingly, one of the key objectives of the European Commission’s 2022 REPowerEU plan is to increase demand for renewable hydrogen in the EU to 20 million tons per year and to diversify energy sources, using hydrogen and biomass.
5. Does the use of hydrogen have disadvantages?
We wouldn’t be ourselves if we didn’t highlight the current barriers related to the use of hydrogen and the factors that may affect their elimination in the years to come.
- Infrastructure
The current state of hydrogen infrastructure in Europe, as well as component development, is insufficient to meet the growing demand for the new fuel. If we want to achieve the goals set by the European Commission and the Polish Hydrogen Strategy, significant and costly investments will be needed in full infrastructure for hydrogen production from renewable energy sources, storage, distribution, and transport.
Hydrogen is expected to replace traditional fuels in transportation first. To this end, the EC has updated the Alternative Fuels Infrastructure Directive. It is to support the establishment of fueling infrastructure for fuel cell vehicles (FCEVs) and be a guarantee of the availability of charging and refueling stations at major shipping ports and airports. According to EC forecasts, at least 30 million electric vehicles, including FCEVs, are expected to be in operation in Europe by 2030. For hydrogen refueling, it is therefore envisaged to build at least one refueling station, operating in both directions for heavy vehicles at 700 bar (350 bar is optional) every 200 km of the TEN-T core network by 2030. Light vehicles should be able to refuel at all stations. By 2030, member states are also obliged to provide at least one hydrogen refueling station at each urban node of the TEN-T network with a capacity of min. 1 t of hydrogen per day.
- Costs
Let’s face it, right now, renewable hydrogen production is expensive compared to traditional fuels.
According to analyses by the DOE Hydrogen and Fuel Cells Program Record, by the end of 2020 in the US, the price of hydrogen produced in PEM electrolyzers could be in the range of $5-6/kg, considering current technology, electrolyzer capital costs of $1,500/kW, and grid electricity prices of $0.05-0.07/kWh. At the time, analyses assumed that the price could be reduced to $4-6/kg, with an electrolyzer capital cost of $1,000/kg combined with industrial-scale RES (Department of Energy United States of America, Cost of Electrolytic Hydrogen Production with Existing Technology, 2020).
In turn, sample financial analyses of on-site renewable hydrogen production, that is, directly in the area of hydrogen refueling stations in Europe, indicated that in the mid-level scenario, the price of hydrogen at the dispenser, which is the sum of the production cost and the cost of fuel infrastructure in 2020, was about. EUR 11/kg and would reach about EUR 7/kg by 2030 and about EUR 5/kg by 2050. The optimistic scenario, in turn, assumed a reduction in hydrogen production costs of about 15-35% compared to the mid-level scenario (The International Council on Clean Transportation, Cost of renewable hydrogen produced onsite at hydrogen refueling stations in Europe, 2022).
Key to increasing the profitability of renewable hydrogen production will be technology development and the planned increase in investment in new RES capacity, which will translate into economies of scale. An important instrument affecting the profitability of hydrogen will be the European Hydrogen Bank and the anticipated fixed premium of up to EUR 4 for each kilogram of hydrogen produced.
As shown in the analysis conducted by SES Hydrogen Energy for an example investment such as a hydrogen hub, a farm consisting of photovoltaic and wind sources will allow the production of electrolytic hydrogen at a price of about EUR 4.50-5.00, or about PLN 21.00-23.50. Assuming a fixed premium at, for example, €3 for each kilogram of hydrogen produced, the production price of one kilogram would drop to €1.5-2.00, or about PLN 7.00-9.40. Which, at current prices, would bring the price of renewable hydrogen closer to current conventional fuel prices. This is an optimal model, due to the combined use of PV and wind sources.
- Storage and transportation
Storing and transporting hydrogen comes with certain challenges that must be considered. One of the main problems is the low energy density of hydrogen compared to traditional fuels like gasoline or diesel. This means that much larger amounts of hydrogen need to be stored to store the same amount of energy, leading to the need to build larger storage systems. Moreover, due to its size and properties, hydrogen tends to permeate through materials and escape, which can make it challenging to store safely and efficiently. However, special tanks are used for this purpose, which can store hydrogen under appropriate conditions.
