Energy

<p style="text-align: justify;"><span data-preserver-spaces="true">Green Hydrogen is the name widely given to hydrogen produced by electrolysis - the process of using </span><span data-preserver-spaces="true">electricity to split water into its constituent components of hydrogen and oxygen.</span><span data-preserver-spaces="true">&nbsp;If the input electricity is renewable,&nbsp;</span><span data-preserver-spaces="true">then</span><span data-preserver-spaces="true"> the resulting hydrogen has a low carbon footprint.&nbsp;</span></p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 14pt;" data-preserver-spaces="true">Electrolyzer Technologies for producing Green Hydrogen</span></h2><p style="text-align: justify;"><span data-preserver-spaces="true">There are various types of&nbsp;</span><span data-preserver-spaces="true">electrolyzer</span><span data-preserver-spaces="true">, but the key component of all technologies is the &lsquo;stack.&rsquo; This device consists of a series of electrochemical cells that use catalysis to split&nbsp;</span><span data-preserver-spaces="true">the</span><span data-preserver-spaces="true">&nbsp;water and a material that is conductive to ions (but not electrons). The stack is then supplied with ultra-pure water (requiring a water purification module) and DC electricity (requiring a transformer and rectifier)</span><span data-preserver-spaces="true">,&nbsp;</span><span data-preserver-spaces="true">and outputs oxygen, hydrogen and heat.</span><span data-preserver-spaces="true">&nbsp;</span></p><p style="text-align: justify;"><span data-preserver-spaces="true">Heat exchangers and radiators extract heat, while equipment purifies hydrogen (removing water and oxygen) and usually vents oxygen.&nbsp;</span></p><p style="text-align: justify;"><span data-preserver-spaces="true">Electrolyzer technologies have the following advantages and disadvantages:</span></p><p style="text-align: justify;"><img style="display: block; margin-left: auto; margin-right: auto;" src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/tab1.png" width="645" height="237"></p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;"><span data-preserver-spaces="true">With this in mind, the following technology is most suited to the following markets:</span></p><p style="text-align: justify;"><img style="display: block; margin-left: auto; margin-right: auto;" src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/tab2.png" width="607" height="107"></p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 14pt;" data-preserver-spaces="true">Future of Hydrogen as a Transport Fuel</span></h2><p style="text-align: justify;"><span data-preserver-spaces="true">For over a decade, vehicle companies have been developing hydrogen fuel cell vehicles and funding has been in place from&nbsp;</span><span data-preserver-spaces="true">a variety of</span><span data-preserver-spaces="true">&nbsp;public bodies for the rollout of Hydrogen Refuelling Stations (HRS)</span><span data-preserver-spaces="true">, yet</span><span data-preserver-spaces="true">&nbsp;this has not led to the anticipated widespread rollout of hydrogen vehicles.</span><span data-preserver-spaces="true">&nbsp;Furthermore, companies have recently announced the closure of several&nbsp;</span><span data-preserver-spaces="true">HRS</span><span data-preserver-spaces="true">.&nbsp;</span></p><p style="text-align: justify;"><span data-preserver-spaces="true">So, is this the end of the road for hydrogen vehicles?</span></p><p style="text-align: justify;"><strong><span data-preserver-spaces="true">Increase in the global sales of Hydrogen&nbsp;</span><span data-preserver-spaces="true">fuel</span></strong></p><p style="text-align: justify;"><span data-preserver-spaces="true">Firstly, while the West has had little activity on hydrogen as a transport fuel, this is&nbsp;</span><span data-preserver-spaces="true">not the case</span><span data-preserver-spaces="true">&nbsp;in the East.</span><span data-preserver-spaces="true">&nbsp;Globally, fuel sales have risen 45% year on year, with commercial vehicles seeing the&nbsp;</span><span data-preserver-spaces="true">largest</span><span data-preserver-spaces="true">&nbsp;rise.</span></p><p style="text-align: justify;"><img style="display: block; margin-left: auto; margin-right: auto;" src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/Krisimg1.png" width="461" height="209"></p><p style="margin: 0cm 0cm 10pt 36pt; font-size: 9pt; font-family: Aptos, sans-serif; color: rgb(14, 40, 65); font-style: italic; text-align: justify;">Figure 1. Increase in hydrogen transport consumption, split by vehicle type and country (from IEA Global Hydrogen Review 2023)</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;"><strong><span data-preserver-spaces="true">Investing in Large Hydrogen Vehicles</span></strong></p><p style="text-align: justify;"><span data-preserver-spaces="true">The wrong vehicles and HRS were initially produced</span><span data-preserver-spaces="true">&nbsp;for hydrogen.&nbsp;</span><span data-preserver-spaces="true">Hydrogen is competing against battery vehicles and generally (excluding niche markets), batteries are better in smaller vehicles (scooters, bikes&nbsp;</span><span data-preserver-spaces="true">etc</span><span data-preserver-spaces="true">), while fuel cells are the better technology in larger vehicles (ships, trains&nbsp;</span><span data-preserver-spaces="true">etc</span><span data-preserver-spaces="true">).</span><span data-preserver-spaces="true">&nbsp;</span></p><p style="text-align: justify;"><span data-preserver-spaces="true">It is not as clear-cut in the car/bus scale, but it is believed that the crossover point is between the scales of cars and buses, with cars being better as battery vehicles and buses being better as hydrogen vehicles. Unfortunately, vehicle manufacturers and public bodies made the wrong call and chased hydrogen cars for a decade, with both now being reticent to invest in the technology for&nbsp;</span><span data-preserver-spaces="true">mass</span><span data-preserver-spaces="true">&nbsp;rollout of large hydrogen vehicles and HRS.</span></p><p style="text-align: justify;"><span data-preserver-spaces="true">&nbsp;</span><span data-preserver-spaces="true">So what is the future? Eventually, hydrogen will dominate large low-carbon vehicles (buses, trains, construction equipment); however, the mistakes of the past mean this is likely not to occur until mid-2030s.&nbsp;</span></p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;"><span style="font-size: 10pt;"><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:279}"><em>This article was contributed by our expert </em></span><a href="https://www.linkedin.com/in/kris-hyde-phd-263a1a20/" target="_blank" rel="noopener"><em>Kris Hyde</em></a></span></p><p style="text-align: justify;">&nbsp;</p><h3 style="text-align: justify;"><span style="font-size: 18pt;">Frequently Asked Questions Answered by Kris Hyde</span></h3><h2 style="text-align: justify;"><span style="font-size: 12pt;" data-preserver-spaces="true">1. What are the problems with producing green hydrogen?</span></h2><p style="text-align: justify;"><span data-preserver-spaces="true">The widespread rollout of green hydrogen has many impediments. Most analysts would simply state that electrolyzer cost is the biggest barrier, which in many ways is true, but the statement hides some subtleties.</span></p><p style="text-align: justify;"><span data-preserver-spaces="true">It is possible if one calculates</span><span data-preserver-spaces="true">&nbsp;the Cap-Ex and Op-Ex required to reach parity with grey hydrogen (hydrogen produced from natural gas).</span><span data-preserver-spaces="true">&nbsp;</span></p><p style="text-align: justify;"><span data-preserver-spaces="true">However, this is&nbsp;</span><span data-preserver-spaces="true">only</span><span data-preserver-spaces="true">&nbsp;if the renewable electricity input is extremely low&nbsp;</span><span data-preserver-spaces="true">priced</span><span data-preserver-spaces="true">&nbsp;and&nbsp;</span><span data-preserver-spaces="true">electrolyser</span><span data-preserver-spaces="true">&nbsp;prices are less than half&nbsp;</span><span data-preserver-spaces="true">of</span><span data-preserver-spaces="true">&nbsp;their present value.</span><span data-preserver-spaces="true">&nbsp;</span><span data-preserver-spaces="true">Given that it is possible to reach these low electricity generation costs in&nbsp;</span><span data-preserver-spaces="true">certain</span><span data-preserver-spaces="true">&nbsp;locations, the focus is&nbsp;</span><span data-preserver-spaces="true">therefore</span><span data-preserver-spaces="true">&nbsp;</span><span data-preserver-spaces="true">on</span><span data-preserver-spaces="true">&nbsp;the electrolyzer price.</span><span data-preserver-spaces="true">&nbsp;</span></p><p style="text-align: justify;"><span data-preserver-spaces="true">However, there are some points to consider here:</span></p><p style="text-align: justify;"><strong><span data-preserver-spaces="true">Cost of the Electrolysis for Hydrogen Production</span></strong></p><p style="text-align: justify;"><span data-preserver-spaces="true">Parity with grey hydrogen may&nbsp;</span><span data-preserver-spaces="true">simply</span><span data-preserver-spaces="true">&nbsp;be an unrealistic target.</span><span data-preserver-spaces="true">&nbsp;Natural gas is just about the cheapest form of energy for good reason: you&nbsp;</span><span data-preserver-spaces="true">literally</span><span data-preserver-spaces="true">&nbsp;dig a hole&nbsp;</span><span data-preserver-spaces="true">and</span><span data-preserver-spaces="true">&nbsp;energy flows out ready to use. Nature has kindly created it and&nbsp;</span><span data-preserver-spaces="true">pressurised</span><span data-preserver-spaces="true">&nbsp;it for us.&nbsp;</span></p><p style="text-align: justify;"><span data-preserver-spaces="true">Conversely hydrogen via electrolysis needs creating and pressurising to use. It will simply be more expensive to have the acknowledged benefits of zero carbon&nbsp;</span><span data-preserver-spaces="true">- Probably</span><span data-preserver-spaces="true">&nbsp;twice as expensive with it being phased in over a decade.&nbsp;</span><span data-preserver-spaces="true">Impossible</span><span data-preserver-spaces="true">&nbsp;to accept? Consider that (for example) UK wholesale natural gas spot price rose&nbsp;</span><span data-preserver-spaces="true">5 fold in 8</span><span data-preserver-spaces="true">&nbsp;months in 2022 with no forewarning.</span><span data-preserver-spaces="true">&nbsp;</span></p><p style="text-align: justify;"><strong><span data-preserver-spaces="true">Mass Production of Electrolyzers</span></strong></p><p style="text-align: justify;"><span data-preserver-spaces="true">Most people advise that mass production of electrolyzers is the best way of reducing&nbsp;</span><span data-preserver-spaces="true">cost</span><span data-preserver-spaces="true">, and investors applaud manufacturers opening &lsquo;giga-factories.&rsquo; However,&nbsp;</span><span data-preserver-spaces="true">electrolyzers</span><span data-preserver-spaces="true">&nbsp;are not mass-produced. Most of these factories are presently empty spaces. Not only are they&nbsp;</span><span data-preserver-spaces="true">presently</span><span data-preserver-spaces="true">&nbsp;sold in numbers&nbsp;</span><span data-preserver-spaces="true">too</span><span data-preserver-spaces="true">&nbsp;small, but the scale of projects (and hence electrolyzers) is rapidly growing. Imagine setting up a factory to produce motorbikes, then the following year changing to make</span><span data-preserver-spaces="true">&nbsp;2&nbsp;</span><span data-preserver-spaces="true">seater sports cars, then the following year saloons, then the following year&nbsp;</span><span data-preserver-spaces="true">a people</span><span data-preserver-spaces="true">&nbsp;carrier</span><span data-preserver-spaces="true">s&hellip;&nbsp;</span><span data-preserver-spaces="true">Its</span><span data-preserver-spaces="true">&nbsp;not possible to mass produce until the market matures and the scale of modules becomes clear.&nbsp;</span></p><p style="text-align: justify;"><strong><span data-preserver-spaces="true">Inflation</span></strong></p><p style="text-align: justify;"><span data-preserver-spaces="true">We have spent</span><span data-preserver-spaces="true">&nbsp;2&nbsp;</span><span data-preserver-spaces="true">years living in a world with&nbsp;</span><span data-preserver-spaces="true">strong</span><span data-preserver-spaces="true">&nbsp;inflation. Everyone accepts that the cost of everything has risen substantially in this time. Unless you manufacture electrolyzers, where investors still expect you to hit cost targets published</span><span data-preserver-spaces="true">&nbsp;5&nbsp;</span><span data-preserver-spaces="true">years ago</span><span data-preserver-spaces="true">.&nbsp;</span><span data-preserver-spaces="true">This</span><span data-preserver-spaces="true">&nbsp;is unrealistic.&nbsp;</span></p><p style="text-align: justify;"><strong><span data-preserver-spaces="true">Availability&nbsp;</span><span data-preserver-spaces="true">of</span><span data-preserver-spaces="true">&nbsp;Renewable Energy</span></strong></p><p style="text-align: justify;"><span data-preserver-spaces="true">While it is possible to produce renewable energy for a few dollars per MWh, as an electrolyzer owner, you can&rsquo;t buy it at this price. You buy at the wholesale price, as why would the RE owner sell to you when they can achieve several times more income selling to the grid?</span></p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p>