Hydrogen is considered one of the promising energy carriers to support global efforts to decarbonize global economies and one of the few viable solutions for the transport sector. It can be produced via two routes. The cheapest and widest available route is steam methane reforming, and as the name suggests, it is derived from hydrocarbons (typically natural gas). Alternatively, hydrogen can be produced by splitting the water molecule into hydrogen and oxygen via electrolysis, a process which is a few times more expensive in the current market conditions.
The high costs of electrolysis is only partly related to the equipment necessary to enable the molecular split. The largest cost component of the electrolysis-derived-hydrogen-production comes from its high demand for electricity, which in order to deliver the climate benefits it prides itself on, should be sourced from renewable sources. In such case, the electricity used would result from surplus power production when electricity prices are very low (even negative).
But why convert electricity into hydrogen when electricity can be used itself as an energy source for heating, lighting and propulsion. In case of power shortages over wide geographical region, peak demand or in the absence of alternative clean sources, hydrogen offers system back-up. From the available energy storage technologies available, hydrogen can deliver the 1GWh to 1TWh within 1h to 1month, in comparison with batteries whose storage range is a factor of 100.000 lower than hydrogen.
An additional benefit of hydrogen is that it can cater to all the energy system’s functions (low-temperature heat, high-temperature heat, power and mobility), a characteristic which can make the molecule a one-stop-shop solution.
But a hydrogen economy has its hurdles as it requires consumer acceptance, a new layer of system integration, infrastructure retrofitting or even additional new infrastructure. And it all comes at a cost which needs to be swallowed by someone in the value chain.