There’s been a LOT of recent discussion in energy circles about Hydrogen, so we decided to write about it. In this article, we discuss why Hydrogen is important, some of the key policy and technology variables to watch, and timelines for potential adoption. Green Hydrogen is a relatively immature energy technology, much less developed than wind, EVs, solar, or even lithium-ion batteries (more on that later). While it will take some time, probably well over a decade, for Hydrogen to achieve large-scale adoption, this technology should not be dismissed.

What is Hydrogen?

Hydrogen is the universe’s simplest, lightest, and most abundant element (unsurprisingly, given that it is the first atomic number). The element is less abundant on the earth’s crust, however, and occurs naturally on earth only if it combines with other elements in gases, liquids, and solids. Hydrogen combined with oxygen forms water, while Hydrogen and carbon bond to form hydrocarbons such methane, ethane, propane, etc.

When burned, however, Hydrogen produces only water vapor, not carbon dioxide (CO2). Therefore, if Hydrogen is produced from renewable sources of energy it is carbon free. Interestingly, Hydrogen can produce electricity and electricity can produce Hydrogen. This “energy loop” is renewable and environment friendly.

Hydrogen is classified into primarily four different colors based on the primary source of energy used to produce the Hydrogen. Arranging from least to most environmentally friendly, the colors are: brown, grey, blue, and green. Let’s go over each in detail.

Brown Hydrogen is produced from coal or lignite and is easily the most polluting source of Hydrogen production. Grey Hydrogen, meanwhile, is produced from hydrocarbons, typically a natural gas feedstock. While less polluting than Brown Hydrogen, Grey Hydrogen still produces significant greenhouse gas (GHG) emissions. Blue Hydrogen, meanwhile, is produced from natural gas but is combined with carbon capture and storage/sequestration (CCS). There’s some evidence that Blue Hydrogen only halves the carbon emissions produced from Grey Hydrogen, however, and this technology is likely infeasible without formal carbon prices. Finally, Green Hydrogen is the cleanest type. It is produced via electrolysis from renewable power sources (typically wind and solar). Green Hydrogen earns the lion’s share of attention from renewables advocates, regulators, and investors.

Why (Green) Hydrogen

Green Hydrogen is important because it could mitigate intermittency and long-duration storage problems associated with wind and solar generation. In the future, solar and wind power could run electrolyzers that convert water into Green Hydrogen, while the excess power could be stored and sent back to the grid. Lithium-ion batteries suffer from relatively short discharge times, limiting their usefulness for inter-day/seasonal storage. Furthermore, lithium-ion supply chains are complicated: cobalt complements lithium-ion batteries but is largely controlled by state-owned People’s Republic of China firms operating in the Democratic Republic of the Congo.

Conversely, Hydrogen is not only abundant but can also be stored at scale for a long time using tried and tested salt caverns. Green Hydrogen storage could effectively eliminate renewable “intermittency” (such as solar’s “duck curve”), increasing the competitiveness of wind and solar. Furthermore, Hydrogen can potentially be distributed via existing natural gas infrastructure.

Hydrogen Economics and Public Policy

Green Hydrogen adoption is highly constrained, for now, by the staggering cost of electrolysis: Green Hydrogen costs around $5.5/Kg to produce, versus a Grey Hydrogen cost of ~$1.0/Kg. While Green Hydrogen’s costs are expected to fall substantially, the new technology likely won’t get off the ground without substantial government support.

Japan, the EU, Canada, and the U.S. have all begun to adopt Hydrogen policy initiatives, although most of these initiatives are inchoate and unspecific. For instance, the U.S. doesn’t even have a comprehensive Hydrogen policy, while Canada’s strategy is light on specifics. Even the most aggressive Hydrogen policies don’t foresee substantial uptake until 2030.

Keep an eye on two variables this year: funding for basic and applied Hydrogen research, and studies on the practicality of distributing green hydrogen through existing natural gas pipeline networks. If Hydrogen receives funding and can be safely transported with already in-place infrastructure, investors will take this new technology much more seriously. 

What kind of technology is Hydrogen: DVDs or Betamax?

Technological development often follows the famous “S-curve,” where adoption occurs very slowly in the initial phase, only to rapidly accelerate until it achieves its peak penetration rate. Of course, some technologies never reach liftoff. It’s far too soon to say how quickly Green Hydrogen will be adopted – if at all – but we’ll be checking in on this technology often. Don’t dismiss Green Hydrogen.