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Hydrogen: A Prospective Catalyst of Decarbonization

by Seneca ESG
2023-09-20

As China aims to attain carbon neutrality by 2060, the energy sector faces increasing pressure for vast and deep decarbonization. Hydrogen emerges as a potential alternative energy source to accelerate this transition. According to a white paper on China’s hydrogen and fuel cell industry in 2020, China is now the largest producer of hydrogen power, producing about one third of the global volume at over 20m tons annually. Yu Zhuoping, Director of the Expert Committee at China Hydrogen Alliance, remarked that to attain national carbon neutrality by 2060, hydrogen is expected to make up 20% of end use energy and greatly reduce the country’s reliance on fossil fuels. While the potential is great, the idea of hydrogen as a viable clean energy source remains somewhat elusive. This article gives a brief introduction to hydrogen power and highlights its role in decarbonization.

Understanding Hydrogen

The science of hydrogen power is simple: hydrogen fuel reacts with oxygen from the air and creates water. This electrochemical process produces electricity which can be harvested as energy. Hydrogen is the most abundant element on earth, and can be found as part of most compounds, such as water (H2O) and methane (CH4). However, it rarely exists naturally as hydrogen gas (H2). To produce hydrogen for fuel, a process needs to effectively extract the element from such compounds.

As an alternative fuel source, hydrogen is light, storable, energy-dense, and produces no direct emissions of pollutants or greenhouse gases (GHG). However, it must be generated from other forms of energy, and not all hydrogen is created equal. The environmental impact and energy efficiency of hydrogen depend on the production procedure of hydrogen. Based on these factors, there are three types of hydrogen:

Utilizing Hydrogen

As a secondary source of energy, hydrogen can be used as energy storage, with clear advantages over conventional batteries. These include cleaner production process, zero pollution after disposal, and higher energy density. Hydrogen is 33 times more energy-dense than conventional batteries and almost three times more than petrol and diesel. In addition, hydrogen is the lightest element, which makes hydrogen fuel cells ideal for transport. As a result, aviation, logistics, and new energy vehicles (NEVs) are some of the most popular areas of application for hydrogen energy.

Nevertheless, as exciting as hydrogen’s potentials are, the prices of hydrogen production, storage, and transportation remain high, and more research is required to address key technological bottlenecks. Around the world, green hydrogen technology is still at its nascent stage, hence current production is almost entirely dependent on fossil fuels. According to the International Energy Agency (IEA), 6% of global natural gas and 2% of global coal goes into hydrogen production.

Notably, 62% of the hydrogen production in China comes from coal, compared with the global average of 18% and 6% in Japan. Only 3% of the total hydrogen supply in China comes from electrolysis. Besides, according to the Wuhan Economic and Information Commission, after pressurization and storage, coal-based production costs remain three times less than production via water electrolysis. Reducing the cost of electrolyzing projects would be crucial to China’s transition from coal-based hydrogen to green, zero-emission hydrogen.

China’s Major Hydrogen Applications

Most of the hydrogen produced in China today is used in the refining and chemical sectors, such as production of ammonia as fertilizer. In the meantime, the application of hydrogen fuel for transportation is quickly picking up. Hydrogen has become a focus in China’s decarbonization method for the transportation sector, such as fuel cell electric vehicles (FCEVs). During the past decade, the country has already had a successful run of promoting battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs). It is forecasted that it will apply the lessons from its efforts to the stimulation of the domestic FCEV industry.

In 2015, the national government introduced subsidies for FCEVs, which ranged from RMB20,000 to RMB50,000 depending on the type of vehicles and the capacity of hydrogen fuel cells. Investments in FCEVs and other hydrogen-related industries bloomed reached RMB160bn in 2020. Over 20 provinces included hydrogen development in their 14th Five-Year Plans (FYP). As of May 2021, roughly 8,000 FCEVs have gone into operation, most of which are public buses and logistics vehicles.

The steel industry is also investigating decarbonization through hydrogen power. China is the largest steel producer in the world, accounting for 53.3% of world steel production in 2019. Therefore, this coal-based sector is a key sector for decarbonization to achieve the country’s carbon neutrality goal by 2060. Now, two efficient methods to feasibly reduce carbon emissions in steel production are hydrogen power and carbon capture and storage (CCS). Jin Fangming, professor at School of Environmental Science and Engineering at Shanghai Jiao Tong University, remarked that hydrogen might replace coal as the reducing agent of the metallurgy reaction, and cut down on emissions and volatile organic compounds (VOCs) generated in conventional production. Not only can hydrogen replace coal as raw material for steelmaking, it also provides high-quality alternative heat source. On May 10, HBIS Group, a Chinese steel manufacturing conglomerate, launched the first hydrogen steelmaking pilot project in the world. The first phase of the project will incorporate hydrogen as reductant gas for 600,000 tons of steel production. The second phase aims to achieve fossil-free steelmaking by producing hydrogen with electrolysis using renewable energy.

Various Global Hydrogen Strategies

Hydrogen is increasingly becoming a focus on the national agendas around the world. By the end of 2020, of the 27 countries making up 52% of the world’s GDP, 16 drafted comprehensive hydrogen strategic roadmaps, while the remaining 11 were in the drafting process. While many countries share the goal of adopting clean hydrogen as part of their decarbonization and energy security toolkit, their hydrogen strategies vary based on their industry structures and energy needs.

With Germany as an example, its hydrogen applications focus on industrial use, transportation, and heating. It aims to replace fossil fuels in the steel and chemical industries, and prioritizes developing fuel cell aviation and marine transport, followed by FCEVs. This is because Germany is a leading country in industrial manufacturing of steel and chemicals, hence it strongly values decarbonization in those sectors. Germany also first tackles hard-to-electrify areas to diversify global hydrogen development pathways and potentially gain an edge in key hydrogen technologies. As a result, the country prioritized marine transportation and aviation over the less challenging ground transportation.

Meanwhile, Japan channels its hydrogen power toward energy storage for the grid, waste-to-energy plant, and fuel cells for home electricity generation and cars. Since Japan is prone to natural disasters, hydrogen is prioritized for peak regulation and emergency power storage. Hence, the Asian country puts the emphasis on grid resilience and home power generation. Furthermore, the island nation lacks domestic energy resources and seeks to address energy efficiency, waste-to-energy, and renewable curtailment issues with hydrogen as energy storage.

Synergy between Green Hydrogen and Other Renewables

Although the current production cost of electrolysis is high, the overall production cost of green hydrogen is expected to decrease as well, along with the price dropping of renewable energy. Moreover, progress on green hydrogen production could be coupled with that of other renewable sources, such as wind and solar. Due to the nature of wind and solar power, the power generation volume is dictated by natural conditions instead of demand on the grid. To maintain the balance of electricity supply and demand in the grid, curtailment of renewable energy kicks in during high power generation seasons with low electricity needs. This means a purposeful reduction in renewable electricity output below the level of what could be produced. Green hydrogen can be a solution to solar curtailment by harvesting excess energy produced in the day during high seasons to produce cost-competitive, zero emission hydrogen, while bolstering the resilience of the solar project at the same time.

Sources:

https://www.iea.org/fuels-and-technologies/hydrogen

https://afdc.energy.gov/fuels/hydrogen_basics.html

https://finance.sina.com.cn/chanjing/cyxw/2021-04-22/doc-ikmyaawc1092680.shtml

https://green-bri.org/hydrogen-chinas-progress-and-opportunities-for-a-green-belt-and-road-initiative/

https://www.cleantech.com/hydrogen-in-china/

https://jingji.cctv.com/2021/05/14/ARTI6gKyjf1lr2CvWjJtdhxJ210514.shtml

https://www.china5e.com/news/news-1111525-1.html

https://mp.weixin.qq.com/s/iWoKHA0JkLVOCIQj92Nrzw

https://mp.weixin.qq.com/s/2sUAd8ou5okfP3a5SP8ZeA

https://www.worldsteel.org/media-centre/press-releases/2020/Global-crude-steel-output-increases-by-3.4in-2019.html

Tags: Carbon Neutrality 2DecarbonizationElectric VehicleHydrogenHydrogen EnergyIron SteelNew Energy
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