Thomas, eyt al., reported in mid-March, 2021 that hydrogen has long been hailed as a potentially revolutionary alternative to fossil fuels, but high costs have been problematic. Now, “low carbon hydrogen” is back on the table. Just off the M1 motorway near Sheffield, UK on a site where thousands of steel workers once helped to forge the northern English city’s industrial reputation, a little known hydrogen company with just over 220 employees is once again attracting international attention to the region.
ITM Power has, over the past 20 years, created an international name for itself in a clean energy industry that has grabbed the attention of governments from Germany to Japan. Its new $30.5 million factory—the size of two football pitches—manufactures electrolyser equipment that can use renewable power to produce hydrogen from water.
Royal Dutch Shell was an early customer and many of its first electrolysers were deployed to produce hydrogen for refueling stations at the oil major’s forecourts in the UK. ITM has since formed partnerships with other industrial groups including Italy’s Snam and the American-German Linde—both have taken minority stakes in the Sheffield company—but faces competition from Chinese, European and US rivals.
Interest in the kind of clean hydrogen ITM’s equipment produces has ballooned in the past three years, as governments, companies and academics look at whether the light, colorless gas—which doesn’t produce carbon dioxide when burnt—could help solve some of the world’s dirtiest energy problems.
For decades, hydrogen has been hailed as a potentially revolutionary alternative to fossil fuels—General Motors built its first hydrogen-powered vehicle in the 1960s. Yet its high costs and complexities have stunted previous attempts at creating whole new economies centred around hydrogen, which were often driven by oil price surges and shortages, or governments’ desire for energy independence.
But since the 2015 Paris climate agreement, “low carbon hydrogen”, produced either without fossil fuels or by storing and capturing the emissions generated, is firmly back on the agenda. Governments adopting net zero targets are desperately seeking ways to slash emissions from highly polluting sectors including heating, heavy industries like steel and long distance transport, where other options either don’t yet exist or are also in their infancy.
Last year, the EU and at least 15 other countries published hydrogen plans often backed by subsidies to help lower production costs, according to industry lobby group the Hydrogen Council. At least $300 billion is expected, says the council, to be invested globally over the next decade by the public and private sectors, with some in the industry projecting that—if successful—hydrogen could one day help meet almost a fifth of global energy demand. But, so far only $80 billion has been committed.
“The UK government’s legislation for net zero [emissions] by 2050 changed the world,” says, Graham Cooley, ITM’s chief executive, referring to the UK’s 2019 decision to become the first major economy to enshrine such a target in law. “You now have net zero [set to] become law in Europe . . . You couldn’t do it without a net zero energy gas.”
The fortunes of ITM, which listed on London’s Aim market in 2004, illustrate the frenzy around hydrogen, which is already used extensively in industries such as petrochemicals. At the start of 2019 its shares languished around 25 cents. But as interest in hydrogen has soared ITM’s value has risen more than 2,000 per cent to $3.6 billion. At times it has rivalled the value of some traditional energy companies such as Centrica, the owner of Britain’s formerly state-owned giant British Gas.
Yet investors are betting on a technology that remains in its infancy. The vast majority of hydrogen is produced from fossil fuels such as natural gas and coal, creating emissions equivalent to those of Indonesia and the UK combined—about 830 million tons of carbon dioxide annually—according to the International Energy Agency.
So-called “green” hydrogen—produced with renewable energy—is the sector’s great hope, but it currently only accounts for about one percent of global hydrogen supply. There is scepticism over its efficiency and whether enough can be made using renewable electricity at a commercially viable price—or from natural gas using carbon capture and storage technology, to reduce emissions—and at the scale the world would need.
“This is all contingent on how aggressive key decision makers are in government policy and the corporate world,” says Ben Gallagher at energy consultancy Wood Mackenzie. “But you cannot get to the 2 Celsius target [for limiting the global rise in temperatures set out by the Paris agreement] without low carbon hydrogen.”
Big Oil’s Latest Gamble
Among the biggest advocates of this hydrogen revolution are the world’s largest oil and gas companies, gambling that greater use of the gas could help secure their long-term future.
One of the units being manufactured at ITM’s factory is destined for Shell’s Rhineland refinery north-west of Bonn in Germany, where the oil and gas major is installing what will be the world’s largest hydrogen electrolyser. It will be capable of producing around 1,300 tons a year of hydrogen to be used in processes such as removing sulphur from conventional fuels.
“Almost anyone involved in the energy space over the past year has announced some kind of commitment to low-carbon hydrogen,” says Gallagher. “A lot of [public] money is now being thrown at low-carbon hydrogen to de-risk it.”
He calculates that around $150 billion is being made available by governments globally to back hydrogen projects, in the form of subsidies and support. The theory is that costs will fall over time as they did for offshore wind and solar power—a shift that made them much more competitive.
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Also see: https://insideclimatenews.org/news/29012021/general-motors-electric-vehicles-carbon-neutrality/
https://insideclimatenews.org/news/02102020/biden-trump-oil-output-2020-election-public-lands/
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