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Why would you use hydrogen for power generation?

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John Armstrong's picture
Chief Operating Officer BPA

John Armstrong is an engineer whose career has spanned the extremes of the energy industry – giving him a front-row seat on the energy roller-coaster. He began his career constructing oil...

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  • Apr 27, 2021
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This question has puzzled me quite a bit and when I recently asked it of my LinkedIn network the post quickly shot up to well over 20,000 views in a couple of days as the debate raged on in the comments . Unfortunately, with such feeds on LinkedIn the true insight can get lost in the fog of comments and so I thought I would share a summary in a blog. The discussion was triggered by SSE and Equinor’s announcement of a plan to build a hydrogen power station in the UK.

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To help navigate this topic I’ve provided a guide to hydrogen colours here. Authors on this topic often assume that the average reader knows the difference between turquoise, pink, blue and green hydrogen – most of the time I can’t remember so I don’t see why you should!

Hydrogen comes in lots of colours!

My question was particularly focused on why you would make blue hydrogen (hydrogen made from methane gas, with the carbon dioxide captured and stored underground) or green hydrogen (made from renewable electricity) to then combust it in a power station – when you could just burn methane in a traditional power station and capture the carbon dioxide after the event. It doesn’t seem to make too much sense to use electricity to make hydrogen to then convert it back to electricity again however it seems there may be some good reasons which I’ve outlined below.

  • Pre vs Post Combustion Capture

Although post combustion carbon capture is possible its not 100% perfect. There are some useful descriptions of the different technologies from the US Department of Energy. To make CCS work the flue gas from the power station needs to be cleaned and then compressed (as it pretty much comes out at atmospheric pressure). The process also requires quite stable conditions – so the power station needs to be running in a steady state and not rapidly ramping up or down. Pre-combustion capture will likely be cleaner over all – as the process is simpler and doesn’t involve the addition of other pollutants such as NOx from the combustion process. It is however a very energy intensive way of going about it and so the economics would all need to stack up to make it competitive against other technologies.

  • Equipment

Studies have looked at using exiting gas turbine technology for hydrogen generation which looks possible without significant technology developments however capturing carbon dioxide from combustion required a lots of additional process equipment. This all needs space and costs money. There are also hazards associated with it – potentially moving a plant from something which can operate largely autonomously to more of a chemical plant with associated risks. Capturing the carbon dioxide at the power station would also require a pipe route back to the storage site, whereas burning hydrogen would only require one pipe to get the hydrogen to the site.

  • Hydrogen from far off places

In the future hydrogen may be generated at the source of the methane gas. So instead of transporting liquid gas such as LNG, the clean hydrogen is transported instead. Where a ready supply of global hydrogen is available, electricity generation from that hydrogen may very well make sense especially if the existing gas network has been re-purposed for hydrogen.

  • Flexibility

Hydrogen generation via fuel cell or turbine will likely be far more flexible than a plant operating with carbon capture. Where an extensive hydrogen network existed, local hydrogen ‘peaking’ plants could be used to support the grid as demand changed. Due to the short operational runs, hydrogen would provide a green solution.

It is all about the comparative economics.

These decisions are largely about, fuel, investment, and operational costs. All of which remain largely unknown in the future and make it difficult to predict where the market will head. That said its interesting to see where companies are heading. In the case of SSE and Equinor they are very much keeping their finger in both pies by looking to build both on one site. Although their timescales for the hydrogen generation plant are a little further out, aiming for 2030, than the CCGT (gas power station) with CCS (carbon capture) where they are aiming for 2025.

  • Cost of electricity – Much of the discussion of hydrogen is around there being a ‘glut’ of green electricity at certain times of day making hydrogen almost free. Hydrogen power generation presents an opportunity to generate hydrogen when its windy and sunny to then use for electricity generation at night or when its not so windy. The economics of this are very much about the intraday costs of electricity, and in this case, battery technology will be a direct competitor for hydrogen.
  • Cost of hydrogen – As a global market for hydrogen develops the cost per kw will determine whether its better to buy hydrogen or generate electricity a different way. There will need to be a fair playing field here as imported hydrogen will need to have a cost which recognises the carbon emitted in its manufacture (blue hydrogen is unlikely to be completely zero carbon).
  • Equipment costs – The investments required are likely to be large. In deciding whether to use hydrogen – or methane for electricity generation the comparative costs of the asset and the ongoing operations will become important. If the existing gas network has been re-purposed for hydrogen, then it may be easier to switch to hydrogen rather than install expensive new infrastructure for both gas and carbon dioxide. For reference a recent article from Argus highlighted that by 2025 Combined Cycle Gas Power Stations with Carbon Capture could be cost effective. This came with a carbon price of around £35/T.

Technology ‘green swans’

In this area technology changes are rapid, and these can quickly tip the balance between one technology and another. With technology so young its likely that across the whole sector there is plenty more disruption to come as costs are driven down in renewable generation, hydrogen production and energy use.

Final Thoughts

I still feel this is quite uncertain as to where the market will go. Currently hydrogen feels too costly to use as a gas substitute for power stations – and perhaps our effort should go to reducing the carbon impact of the hydrogen already used for fertiliser which already contributes to 2.5% of global emissions. I do feel this idea of a ‘glut’ of green renewable energy is a slight distraction, as more interconnected grids enable renewable electricity to reach more distant markets.

Plenty of projects are being announced so it will be interesting to see where they ultimately go!

 

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Matt Chester's picture
Matt Chester on Apr 27, 2021

Great coverage of the in-between zone the thinking of hydrogen-to-power seems to be sitting at the moment. It seems if we kept in mind the localized and specialized use cases, we'd see a ton of value for H2 to be used like this-- but for better or worse the inclination of the industry seems to be to then extrapolate it to be able to be the tool to solve every problem in the energy sector. And when the numbers don't add up for that to be the case, it just looks hydrogen as a whole look worse and perhaps undercut those specialized use cases where it can/should be making a difference today

John Armstrong's picture
John Armstrong on Apr 27, 2021

Absolutely! - seems to be the answer to everything in the media at the moment.

There is a risk it become 'the answer' to every question, rather than targeting it to the most applicable uses.

Bob Meinetz's picture
Bob Meinetz on Apr 27, 2021

John, the answer to your question, at least in the U.S., will probably seem at least as nonsensical as burning hydrogen to generate electricity: because it's profitable.

In a competitive, free market, companies maximize profit by  limiting costs while making the most useful product for their customers. But due to a wrinkle in federal law, since 2005 U.S. utilities are allowed to charge customers a profit on the fuel they use to generate electricity, creating an incentive for utilities to burn as much fuel as they can to generate it. Though it raises the price of electricity, utilities are monopolies - customers don't have the option of switching to a cheaper alternative.

In 2019 customers around the world consumed 141 trillion cubic feet of natural gas (that's trillion, with a "t"). 

It's a tragic irony that so-called "green" electricity - and production of brown hydrogen - is actually increasing consumption and carbon emissions from natural gas. Though oil companies point to reductions in coal consumption as a positive sign, and portray  gas is a "bridge fuel" to a renewable future, they have no interest in stopping climate change - it's too profitable.

John Armstrong's picture
John Armstrong on Apr 28, 2021

Bob - regulation is so important in making this all work. unfortunately regulation often has effects which may not result in the lowest carbon outcome. John

Bob Meinetz's picture
Bob Meinetz on Apr 28, 2021

"...regulation often has effects which may not result in the lowest carbon outcome."

Maybe so. But free-market capitalism thrives on consumption, and increasing consumption never results in the lowest carbon outcome.

Michael Keller's picture
Michael Keller on May 4, 2021

Bob,

Why shouldn’t a facility make a profit on the fuel being used? Should a gas station be allowed to make a profit on the fuel they sell?

Should a factory be allowed to factor profit into costs associated with fuel used to produce a product?

Green energy gets a production tax credit for the energy produced. Is that OK?

Corn farmers get subsidies to turn our food supply into fuel for vehicles. is that OK?

All that being said, seems to me all government created subsidies, mandates and similar “thumbs-on-the-scale” actions should be erased from the marketplace. However, removal of these items seem unlikely as they emanate from politicians buying votes to get re-elected and richer.

In the final analysis, I do agree with your point. The government has no business providing a special provision for power plants using natural gas. In general, the power plants should be regulated, with profit tied to a return on the owners investment. A return on the money they may have borrowed to fund their investment is not a profit consideration, nor is buying fuel, which is just an expense.

Bob Meinetz's picture
Bob Meinetz on May 6, 2021

"Why shouldn’t a facility make a profit on the fuel being used? Should a gas station be allowed to make a profit on the fuel they sell?

Should a factory be allowed to factor profit into costs associated with fuel used to produce a product?

Gas stations and companies manufacturing a product operate in a competitive environment. Any customer who believes their products costs too much can patronize a competitor.

Electricity customers have no freedom of choice. Without it, there is no incentive to keep prices low.

"Green energy gets a production tax credit for the energy produced. Is that OK?

Corn farmers get subsidies to turn our food supply into fuel for vehicles. is that OK?"

Both are a matter of opinion. First, we have to define what "green energy" is and whether our taxes are being well-spent. Then citizens have to elect representatives who will vote for legislation that supports their views.

Utility regulation was all but non-existent until the 1930s, when the federal government realized electricity customers are at the mercy of their providers for what FDR considered a fundamental human right.

Before that time, for example, farmers had no electricity - it simply wasn't profitable to install transmission to areas with so few customers. Under New Deal regulation, however, the federal government forced them to install it as a condition of their monopoly. Today, most people believe that was a good thing.

Matt Karber's picture
Matt Karber on Apr 27, 2021

Mr. Armstrong, thank you for the post. I think that hydrogen for power generation will be quite viable when using off-peak electricity to produce it and fuel cells to convert it to electricity. This is particularly attractive when you consider that fuel cells on the market are about 60% efficient, while natural gas turbine "peaker" plants in the US are about 45% efficient. Fuel cells also have no moving internal parts, so they require much less maintenance. As one of our Arizona utilities, APS, has discovered through a tragic accident in 2019, lithium batteries for grid storage can be very flammable and require special methods to extinguish. I believe all the available grid storage options should be on the market, then let the market decide which one is best. 

John Armstrong's picture
John Armstrong on Apr 28, 2021

Matt

Interesting point. I like the idea of decentralised generation from fuel cells.

John

Jim Stack's picture
Jim Stack on Apr 28, 2021

John, what a great topic. H2 has been around with many projects for quite a while. The APS fire in Phoenix arizona was the only battery storage issue I have ever seen.  APS also did a H2 fueling station with the fuel made from excess off peak electricity. It was perfect with no problems except no vehicle could use H2 at that time. Everything I have seen says H2 is not a fuel but just another storage medium. It is too costly and not renewable or green. But as you wrote advances are being made everyday. So it may have a future after all. 

John Armstrong's picture
John Armstrong on Apr 30, 2021

Jim

I agree... important to see Hydrogen as a transport and storage medium not a source.

John

Rami Reshef's picture
Rami Reshef on Apr 29, 2021

Nice effort to explain the intricacies of such a complex topic, John. I wonder how much more complicated it becomes when you apply the issue of carbon tax? Will products/processes be taxed differently if the capture is pre-combustion or post-combustion? Methane will be taxed at a rate higher than hydrogen.  Not sure if and how carbon tax will be applied differently to blue vs green hydrogen... interesting if these issues will make cost comparisons easier or more difficult. 

John Armstrong's picture
John Armstrong on Apr 30, 2021

Rami

Good point on carbon taxes... this could really change hydrogen. I wonder if you'd see other sources of peak generation as likely higher carbon hydrogen.

John

Doug Houseman's picture
Doug Houseman on May 3, 2021

I would love to be able to get a 100 to 200 KG of hydrogen delivered to my fuel cell for power outages. Then I would not have to depend on any fuel to be delivered during a natural disaster.

NOTE: 100 KG of H2 = 336 KWH of energy storage. In the best fuel cell commercially available that is equal to over 250KWH or 840 KG of lithium ion batteries.

John Armstrong's picture
John Armstrong on May 5, 2021

Doug - useful numbers! 

Julian Silk's picture
Julian Silk on May 3, 2021

Dear Folks,

 

I would just like to make a comment on this post, which seems perfectly reasonable.  One of the determining factors that seems to have been left out is whether the carbon capture is more successful in connection with the combustion of the natural gas that could be used to power the fossil-fuel generation, or whether the hydrogen would be shipped using fossil fuels, which might be a more difficult target for carbon capture.  If the hydrogen is generated by renewable technologies, and is shipped in a pipeline powered by renewable technologies, and then is translated into energy using a fuel-cell that produces no emissions, then a very high carbon price would make it economical.  If the carbon price is not so high, and any part of the transportation is powered by fossil fuel, then it becomes a question of the relative efficiency of the capture for transportation vs. capture for combustion.  For vehicles, the only thing I have ever seen which discusses carbon capture is a dissertation by Christina Reynolds, at the University of Michigan, "Decarbonizing Freight Transport: Mobile Carbon Capture from Heavy-Duty Vehicles", at https://deepblue.lib.umich.edu/bitstream/handle/2027.42/151521/creyn_1.p... The IEA expects carbon emissions from transport to still be significant in 2070, as in https://ourworldindata.org/co2-emissions-from-transport.  Two examples of improving the efficiency of transport in terms of carbon are  https://3degreesinc.com/services/transportation-decarbonization-solution...

which discusses reducing the carbon emissions of transport means, and

https://www.maritime-executive.com/article/enabling-carbon-capture-apply...

which discusses the improvement possible in shipping carbon dioxide. 

Obtaining information on the possible rate of leakage from pipelines is not trivial.  "Technical challenges facing the transport of anthropogenic CO2 by pipeline for carbon capture and storage purposes" by G.Demofonti (Centro Sviluppo Materiali) and C.M. Spinelli (eni .) at https://www.pipeline-conference.com/sites/default/files/papers/Spinelli.pdf and "Transport of CO2" by authors associated with the IPCC at https://www.ipcc.ch/site/assets/uploads/2018/03/srccs_chapter4-1.pdf gives further information.   But neither of these, nor anything else that is easily available, provides data on leakages from the pipelines, so as to give information as to what can be expected. 

Generically, my belief is that we are measuring carbon capture from natural gas combustion, which is (often) intermittent, trying to deal with response to intermittent renewable generation, vs. the capture media from these transportation options, which seem to have higher usage rates, but lower efficiencies.  In the COVID-19 pandemic, which has lowered transportation usage so much, the use in combustion would seem to be more efficient.  If this changes over time, then the advantage would seem to change as well. 

John Armstrong's picture
John Armstrong on May 5, 2021

These are all great points Julian. The comparative economics for this just feel so complicated. It all feels a little speculative right now.

Julian Silk's picture
Julian Silk on May 5, 2021

Thank you!  It really will be speculative until there is a market for hydrogen.

 

Mark Silverstone's picture
Mark Silverstone on May 4, 2021

The price of carbon reached its highest point in history today, over €50 per tonne CO2.   

 
“It gives a strong signal to investors and citizens that the direction of travel in the EU is becoming clearer and clearer so they make the next investments, and for citizens too.”

While I don´t think €50 will fully cover the cost of CCS, it may have the effect of making both green and blue hydrogen more valuable.  This may, in turn, help create the market for those commodities and further encourage build-out of renewables.  At the same time, this recent increase seems to be behind more plans for CCS in Europe.

John Armstrong's picture
John Armstrong on May 5, 2021

Mark

I think your point about carbon price is a good one. At what point does green hydrogen to power for peaking make the best carbon/economic sense? I'd say unlikely a good pathway for baseload power unless you can get green hydrogen from solar/wind 'stranded' areas.

John

Michael Keller's picture
Michael Keller on May 4, 2021

Significantly cheaper to use natural gas in a power plant. Absent some form of monetary inducement, there is no particular reason to use hydrogen. Then there is the problem of actually getting the hydrogen to the power plant. Further, power plants using gas turbines require staggering amounts of fuel gas.

All that being said, there is a practical way to use hydrogen. Gas power plants (technically, combined cycle plants) routinely use burners in their boilers to temporarily increase steam production, thereby providing additional generation to meet grid peaking needs. Therein lies an opportunity.

Use ill-timed green energy (both solar and wind) and electrolysis to create and then store hydrogen for future use by the plant’s boiler duct burners. 

This is a straightforward technical application. Duct burners can readily accommodate the hydrogen and there are no CO2 emissions. More efficient steam electrolysis is also possible, as a combined-cycle plant also produces steam.

The monetary advantage of this approach lies with the ability to buy the off-peak green energy at a very cheap price. Also, the green energy facility does not receive a subsidy if it is not producing power. Win-win for all parties.

In passing, using hydrogen in a gas turbine is feasible, but there are a lot of technical issues in adjusting high performance machines tuned to fire natural gas. Duct burners are simple devices that can readily handle hydrogen. Burners setup to burn hydrogen are readily available.

John Armstrong's picture
John Armstrong on May 5, 2021

Thanks Michael - I think your right. You'd need the right incentive /cost package!

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