Hydrogen fuel cells have the potential to increase mainstream adoption of renewables and decarbonize a range of industries. In this article, we go into how hydrogen technology works, how it compares to alternatives, recent trends in the hydrogen economy, and where the industry is headed next.
The unfortunate events in Texas this month remind us that our aging energy infrastructure is highly vulnerable to climate hazards. While the primary culprit of the blackouts in Texas was a lack of weatherization of generators and pipelines, the spike in energy demand due to the cold weather exacerbated the supply and demand imbalances. Renewables were not disproportionately at fault for the incident, but the shocks we witnessed are an example of one of the most pressing challenges facing the renewable industry today - guaranteeing supply despite intermittent energy (AKA “firming”). Hydrogen may offer us a solution.
How hydrogen technology works
Hydrogen – the simplest collection of protons, neutrons, and electrons we call an "element" – constitutes the vast majority of observable matter in the universe (~75% by weight). Yet despite hydrogen being the most abundant element in the universe, there is very little “free” hydrogen on Earth. Most of it is bound in fossil fuels, which contain hydrocarbons like methane (CH4), or water (H2O). When extracted, hydrogen typically takes the form of molecular hydrogen (H2).
You should think of hydrogen as an energy carrier just like gasoline, diesel fuel, or batteries. Hydrogen can 
be stored as a pressurized gas or liquid at ultracold temperatures (see diagram below of a BMW hydrogen fuel cell electric vehicle (FCEV) car schematic). When re-electrified via a fuel cell, hydrogen combines with oxygen to emit electricity, heat, and water, with no carbon emissions.
Unfortunately, 95% of hydrogen produced in the US today is made from fossil fuels, typically natural gas. This hydrogen is used mostly as a feedstock for ammonia (for fertilizer) and methanol, as well as for oil refining.1 The most common extraction technique is steam-methane reforming (SMR), where methane reacts with steam under pressure to produce hydrogen and carbon dioxide. Hydrogen produced through this method is known as “grey” hydrogen, emitting roughly 7 tons of CO2 for every ton of hydrogen yielded.2 If the carbon dioxide emissions are captured and stored underground, the hydrogen gets an upgraded classification of “blue” hydrogen as it has a lower environmental carbon impact.
The other 5% of hydrogen today is mostly produced through electrolysis of water - a process in which an electrical current is passed through a chemical solution in order to separate hydrogen and oxygen (see image for a quick chemistry lesson). Electrolysis, if done
with renewable energy sources such as wind and solar, results in zero greenhouse gas emissions, earning the term “green” hydrogen. In the last 5 years, the cost of electrolysis equipment has fallen by around 40%2, and the cost of producing hydrogen from renewable electricity could fall 30% by 20303, achieving parity with grey hydrogen.4
Researchers are also exploring other eco-friendly ways of extracting hydrogen,5 such as:
- Using microbes that use light to make hydrogen
- Converting biomass into gas or liquids and separating the hydrogen
- Using solar energy technologies to split hydrogen from water molecules
One thing to keep in mind - hydrogen isn’t new. British chemical engineer Sir Francis Bacon developed the first viable hydrogen fuel cell in 1932. The first practical application of this high-efficiency, pollution-free technology was in the Apollo 11 space flight in 1969, when a
hydrogen-powered fuel cell supplied electricity and water for the mission (see image to the right), and liquid hydrogen was used as fuel to propel rockets.6
In fact, there has been momentum behind replacing hydrocarbons with hydrogen multiple times in the last 50 years, including in the 1970s after the oil crisis and in the 1990s when public awareness of “climate change” started growing rapidly. These efforts lost steam (no pun intended) for a few reasons including the cost of the technology versus alternatives and barriers to entry with creating new infrastructure.2 However, falling hydrogen and renewable energy costs massively change the equation for many energy needs.
How hydrogen compares to alternatives
Hydrogen has one of the highest energy densities by weight (3x gasoline and 40x lithium-ion), but one of the lowest energy densities by volume (1/4x gasoline, albeit still about 10x lithium-ion).7 This makes it well suited for a very specific set of high-intensity, longer duration energy applications beyond chemical production and oil refining, such as freight and long-distance transport, power generation for buildings, and steel and iron manufacturing.
For example, for powering commuter cars, volume is typically thought of as more important than weight , so H2 isn’t particularly advantageous. But for trucks and airplanes, weight is arguably more important than space taken up.
Another benefit of hydrogen fuel cells is faster refueling. Charging a battery electric vehicle can take up to 30 minutes, for the same reason that charging your phone takes longer than a few seconds (safety and reliability). But once hydrogen is extracted, it can be moved around fairly seamlessly in gas or liquid form. For comparison, it only takes 5 minutes to re-fuel a Toyota Mirai!
However, R&D funding for battery electric vehicle (BEV) tech has shot far ahead of hydrogen electrolysis and fuel cell technology in the last decade, which has translated to innovations that have reduced some of this advantage by boosting BEV range and charging speed.
One of the largest drawbacks of hydrogen is the higher amount of energy lost in the process of hydrogen extraction, compression, and storage. Hydrogen cars have a well-to-wheel efficiency of only ~30%, compared to ~70% for lithium-ion BEVs.8 That is still slightly better than gas-powered internal combustion engines (~15%) and almost even with diesel internal combustion engines.9 Hydrogen’s low efficiency ratio is a major contributor to current high costs.
Another obstacle is the chicken-and-egg problem with developing hydrogen infrastructure. California, which is leading the nation in building hydrogen fueling stations for fuel cell electric vehicles (FCEVs), only has about 43 retail hydrogen stations open to the public, serving around 9,000 FCEVs.10 At the end of 2019, only 470 hydrogen refuelling stations were in operation worldwide - Japan had 113, Germany had 81, the US had 64, and China had 61.
In a blow to the industry, in 2019 Amazon abandoned a $600M order for Plug Power hydrogen fuel cells for its delivery vehicles in favor of 100K Rivian battery-electric delivery vans. Amazon demonstrated an unwillingness to absorb the cost and headache of buying fuel cell vehicles and building out the needed infrastructure.11
Fuel cell vehicles may not take off in the consumer market (currently only 0.5% of new low-carbon vehicle sales), but they still hold potential in heavy duty applications like trucks and forklifts. By 2050, McKinsey estimates that hydrogen fuel cell applications may reduce carbon emissions by 650M metric tons per year (16%), and reduce nitrous oxides and tailpipe emissions by 36%.6
In the stationary fuel market, hydrogen can be a potential game-changer as an on-demand dispatchable energy source to supplement renewable energy shortages. Long term electricity storage is crucial in states such as California, which receive much of its electricity from solar power during the day. California’s solar arrays generate such vast amounts of energy that California’s grid operator often pays neighboring states to take the excess electricity to ensure grid stability. Yet even California faces supply-demand imbalances, as evidenced by the rolling blackouts in August. These shortages are surprisingly common because renewable energy generation is most productive when electricity demand is the lowest.12
Currently, 96% of the world’s electricity storage comes from pumped hydroelectric systems (literally pumping water into a high elevation reservoir and releasing it when needed).13 You can imagine the geographic and spatial limitations with this or other gravity-based techniques. Hydrogen offers a more practical solution to smooth out renewable energy supply over time.
Recent trends in the hydrogen economy
Hydrogen today is primarily used as a feedstock in industrial processes like ammonia synthesis and the refining of crude oil (see chart for exact breakdown). But, hydrogen is gaining momentum as a key catalyst in decarbonizing a range of sectors, including long-haul transport, chemical production, and iron and steel production.
With an ambitious hydrogen agenda, hydrogen could go from meeting <1% of the U.S.’ non-feedstock energy demand to meeting 14% of it by 2050.6 The Hydrogen Council, a lobby group based in Brussels, thinks hydrogen could be satisfying 18% of the world’s energy demand by 2050.
Many nations are setting aggressive carbon neutral targets for the coming years, positioning hydrogen to become an increasingly necessary part of the clean energy mix adopted worldwide.
The EU’s post-covid stimulus plan includes goals to install 40GW of green hydrogen capacity by 2030. China has launched policies supporting the adoption of fuel cell buses and light-duty trucks (and is currently supplying 97%+ of the world market for both). And China's government hopes to see one million fuel-cell powered vehicles on the roads by 2030. Japan wants hydrogen’s price to fall by 90% by 2050.2
In the US, Biden has set a target for the US to have net-zero emissions by 2050. In his clean energy blueprint, Biden pledged to create a new office, known as the Advanced Research Projects Agency on Climate, to develop innovative technologies like next-generation electrolyzers to create green hydrogen energy more cheaply than can be done by using shale gas.14 He also committed to using existing pipelines to transport green hydrogen, making it available to power plants at the same price as conventional grey hydrogen within a decade.
Aggressive carbon reduction targets have also become a mainstay of the private sector, becoming popular with both car companies and large multinationals with enormous supply chains and carbon footprints.
A coalition of 11 large companies (“Hydrogen Forward”), including Shell, Toyota, and Hyundai, announced earlier in February that they’re teaming up to advocate for hydrogen energy on the grounds that the technology will help the U.S. cut carbon emissions and create new, well-paying jobs.14
In the short to medium term, therefore, low-carbon hydrogen production will make headway in existing industrial applications (oil refining, methanol and ammonia production, and steelmaking), which will primarily occur through carbon capture and utilization or storage (CCUS) - i.e., shifting from grey hydrogen to blue hydrogen.
Additionally, hydrogen will likely see expanded use in niche transport sectors, like long-distance trucking as well as distributed power solutions.
Nikola Motor, a startup truck maker, began building a $600M factory near Phoenix and is targeting making futuristic hydrogen fuel cell trucks in 2023 (with pre-orders of $10B led by companies like Anheuser-Busch).15 CEO Trevor Milton argues that new electrolyzer technology and the rising surplus of solar and wind power in California and Southwestern states means Nikola can provide hydrogen fuel for trucks that’s cheaper than diesel with no carbon emissions.
Distributed power solutions can take many forms, such as primary power via microgrid integration into military bases, campuses, and remote communities, or as backup power for data centers, telecommunication towers, hospitals, etc.
For example, Plug Power is providing electrolyzers to power several farms and wineries micro-grids in California, which help protect against California’s frequent brownouts and blackouts. Microgrids are essentially local energy grids that can operate in coordination with the traditional wide area synchronous macrogrid.
Hydrogen is also an attractive solution for backup power in cases where there are 24/7 availability requirements. As part of its plan to go carbon-neutral by 2030, Microsoft is considering replacing its diesel backup generators with hydrogen storage after a successful
test in July 2020, when in a worldwide first, hydrogen fuel cells powered a row of Microsoft datacenter servers for 48 consecutive hours (see image). An estimated 45% of data centers could use hydrogen fuel as backup power by 2030.6
Where the industry is headed next
Over time, we should expect hydrogen to slowly become a core part of the energy grid working hand-in-hand with renewable sources. Blending hydrogen up to 20% by volume into the gas grid requires minimal modifications to infrastructure to serve increased demand for domestic and industrial heating.3 Hydrogen production will bring flexibility into the power grid through firming up renewables (storing excess renewable generation and discharging back into the grid during periods of peak demand), complementing short-duration battery applications.
After the next decade of R&D, the hope is that the cost of green hydrogen will come down and we will see increased use in oil refining and chemical production, as well as across new applications in a range of sectors. A lot is already known about how to generate, transport, and deploy green hydrogen, but R&D will help continue to bring costs down and expand testing of additional applications for hydrogen technology.
Green electrolytic hydrogen is already seeing larger-scale pilots in industrial applications. For example, there are emerging applications of hydrogen in steel production to replace natural gas as a reducing agent. Several steelmakers are pursuing blending with natural gas as a transition strategy to pave the way to usage of pure hydrogen, for which a large pilot plant is under construction in Sweden.3 Furthermore, low-carbon hydrogen can serve as a source of decarbonized heat in medium-to-high grade heat industrial processes (>100°C), which are difficult to electrify.6
The shipping industry, which accounts for around 2.5% of the world’s industrial greenhouse gases, also could benefit from adopting hydrogen tech. A study published in March 2020 by the International Council on Clean Transportation examined an existing shipping route between China and America and concluded that the majority of ships could be powered by fuel cells like those in Hyundai’s hydrogen cars. Norway’s Moss Maritime has already designed an open sea cargo system to move liquefied hydrogen safely.16
ZeroAvia, an aircraft developer working on zero emission air travel at scale via hydrogen power at half of today’s cost, recently raised $21M with backing from Amazon, Shell, and Bill Gates.17 In September ZeroAvia completed the "world's first" hydrogen fuel cell power flight of a commercial-grade aircraft in the skies over Bedfordshire, England, and is aiming to carry out further tests next year with a target of running commercial hydrogen-electric, 20-seater flights with a range of up to 500 miles from as early as 2023.
Ultimately, an influx of capital into the industry and supporting infrastructure will help enable its growth globally, which needs to be supported by both the public and private sector. Existing infrastructure such as natural gas grids can provide a great foundational opportunity to create and scale up low-carbon hydrogen demand. The public and private sector should channel R&D and investment into the right sector niches, as opposed to those where it’s unlikely to be a cheap, useful alternative to existing energy technologies.
As the government looks to accelerate hydrogen innovations and infrastructure development, tax credits can help the technology dramatically lower production costs, the same way they did for solar and wind. Other policy incentives could include renewable fuel obligations, low-carbon fuel standards, general emission standards, and loan guarantees.3 Low-carbon hydrogen in most sectors is still more costly than incumbent fuels, so policy tools will absolutely be necessary to stimulate investment.
Additionally, certain regulatory barriers will need to be addressed to enable large-scale commercialization (e.g., blending limits in natural gas grids, permit processes for refueling stations)6.
Finally, international initiatives to facilitate knowledge-sharing as well as commercial cooperation through trade routes and hydrogen hubs can also help advance industry growth and innovation.
Hydrogen no doubt will serve an essential role as an energy carrier across sectors as companies and countries decarbonize and strive for aggressive climate targets, but energy infrastructure decisions do take a while to implement. The time to rally behind the hydrogen economy is now.
Sources:
1 https://www.energy.gov/eere/fuelcells/hydrogen-production-natural-gas-reforming
2 https://www.economist.com/science-and-technology/2020/07/04/after-many-false-starts-hydrogen-power-might-now-bear-fruit
3 https://www.iea.org/reports/the-future-of-hydrogen; https://www.iea.org/reports/hydrogen; https://www.iea.org/fuels-and-technologies/hydrogen
4 https://www.pv-magazine.com/2020/07/16/green-hydrogena-to-reach-price-parity-with-grey-hydrogen-in-2030/
5 https://www.eia.gov/energyexplained/hydrogen/production-of-hydrogen.php
6 http://www.fchea.org/us-hydrogen-study; https://static1.squarespace.com/static/53ab1feee4b0bef0179a1563/t/5e7ca9d6c8fb3629d399fe0c/1585228263363/Road+Map+to+a+US+Hydrogen+Economy+Full+Report.pdf (McKinsey)
7 https://www.truckinginfo.com/330127/how-nikola-plans-to-make-hydrogen-the-truck-fuel-of-the-future
8 https://www.volkswagenag.com/en/news/stories/2019/08/hydrogen-or-battery--that-is-the-question.html
9 http://www.asahi-net.or.jp/~pu4i-aok/cooldata2/hybridcar/hybridcare.htm
10 https://afdc.energy.gov/fuels/hydrogen_basics.html
11 https://www.nasdaq.com/articles/what-amazons-ev-van-order-means-for-fuel-cells-2019-09-27
12 http://www.fchea.org/in-transition/2019/7/22/unlocking-the-potential-of-hydrogen-energy-storage
13 https://www.irena.org/publications/2017/Oct/Electricity-storage-and-renewables-costs-and-markets
14 https://news.bloomberglaw.com/environment-and-energy/green-hydrogen-backers-see-big-chance-for-sector-development
15 https://www.forbes.com/sites/alanohnsman/2020/07/23/nikola-building-600-million-plant-in-arizona-desert-to-get-hydrogen-big-rigs-rolling-by-2023/
16 https://sponsored.bloomberg.com/news/sponsors/features/hyundai/explore-the-global-hydrogen-economy-today/
17 https://www.greenbiz.com/article/aircraft-company-zeroavia-secures-214-million-hydrogen-electric-planes