Hydrogen is touted by some to potentially supply 14% of all US energy demand by 2050 by what the report authors characterizes as an "Ambitious" scenario.
It needs to be noted, however, that the same report opines that the base expectation is that hydrogen supplies a mere 1% of US energy demand. Is hydrogen in danger of becoming sustainability's version of the Dot Com Bubble?
In the 1990s, a bevy of internet companies saw huge valuations driven by aggressive speculation by a focused cadre of investors. In the fall of 2002, there was a precipitous crash resulting in numerous bankruptcies while surviving companies saw their market capitalization eviscerated. Interestingly, in 1996, six years before the crash, the former Chairman of the Federal Reserve, Alan Greenspan (the gentleman shown in the header), cautioned and forewarned investors against displaying what he termed, "irrational exuberance", regarding the high valuations of internet companies. History unfortunately proved Mr. Greenspan right concerning the consequences when a large cadre of investors artificially inflate and over-value a technology offering that had yet to undergo thorough market operational exposure.
It can be argued that hydrogen economy "hype" is currently in a similar circumstance as was the Dot Com space some years ago. There are high, perhaps too high, expectations that likely need to be tempered due to significant challenges that must be overcome. It is also painfully obvious that, inexplicably, hydrogen seems to be getting immunity from intense scrutiny. Clearly, hydrogen, like myriads of other technology platforms MUST play a role in sustainability and climate change endeavors. The determination for its specific fit remains to be seen and will evolve. However, over-promising and under-delivering on expectations could inadvertently damage hydrogen's appeal which would be egregiously unfortunate particularly since there already is a significant level of existing infrastructure in the US that can be used for launching a hydrogen economy.
Hydrogen's Curious Colorful Metamorphosis
The first rule for hydrogen that requires attention concerns its fit within accepted sustainability jargon.
Currently, it is not clear how hydrogen fits. In a nutshell, it is a renewable, sort of, but not really as positioned.
Previously, the sustainability and renewables space generally thought in terms of two types of resources:
- Fossil fuels which are derived using resources that are not easily renewed.
- Renewable resources are those that are easily renewed using naturally-occurring processes.
Natural gas that is made using renewable resources is "renewable natural gas" or RNG. Plain, simple, and straightforward.
In contrast, hydrogen advocates, who apparently are concerned with the perceived difficulty of generating authentic green hydrogen, have attempted to "create" an elaborate alternative criteria and unique grading system. This stratagem currently consists of nine colors which assigns a color for hydrogen for different "levels" of sustainability attributes. Each color corresponds to the specific production methodology used to make the hydrogen presumably bestowing varying degrees of sustainability attributes. More details on this grading rationale are given elsewhere and a chart is shown below.
The detailed explanation for the color coding makes for interesting reading. As previously noted, the gist of the color-coding methodology is to assign a color for the hydrogen that is linked to the specific production methodology. Basically, as the hydrogen color chart segues from left to right towards white, ancillary schemes are introduced to the hydrogen production process to either capture or mitigate carbon dioxide production. These augmentations are increasingly more complicated technical assemblages that are a burden to efficient hydrogen production and costs.
Surprisingly, the "greenest" hydrogen being promoted in the color scheme is purportedly made using electrolysis that is powered by renewable energy systems such as solar and wind. Biohydrogen is not discussed and there is no mention of the use of biological processes which are suitable for making REAL green, non-color coded, hydrogen.
The color-coding scheme for hydrogen can be construed as a backdoor Byzantine strategy to enhance the appearance of the sustainability gravitas of hydrogen to the investment community.
It is suggested that an alternative to the color-coding arm waving is to generate meaningful case studies for the various hydrogen production scenarios complete with mass and energy balances. These data provide a better basis with which to quantify sustainability benefits, enhance transparency, and give potential hydrogen consumers a firmer technical and commercial basis for proceeding forward. The aggregate sustainability calculus can be estimated using substantive analyses.
The Case for Renewable Natural Gas (RNG)
RNG (Renewable natural gas) is readily produced by feeding biomass to anaerobic digesters. According the Union of Concerned Scientists, the US generates almost 700 million tons of renewable biomass annually. Additionally, consider the vast amount of installed assets and infrastructure in the US that are available for generating RNG:
- About 16,000 municipal wastewater treatment plants
- 2,200 other sites which includes about 1,200 municipal plants for a net of 1,000
As an example, Shell has recently installed and RNG system that is projected to make about 740,000 MMBTU per year of RNG. With high conversion technology, this system could produce about 1,200,000 MMBTU annually per installation.
The table above makes some interesting points. First, RNG production can be readily ramped-up in the US using a distributed resource model easily matching and also vastly exceed the 1% and 14% targets for US national energy demand proposed for hydrogen production. Also, the MMBTU/day production target can be readily increased with more feedstock and larger infrastructure size so more energy production per installation is feasible which lowers the number of installations required. Finally, it is important to note that production of RNG using anaerobic digestion creates the opportunity for manufacturing multiple renewable resources at one installation as depicted in a recent presentation. Water, fertilizer compounds, and RNG can all be manufactured which bolsters project financing attributes with multiple off-take contracts for renewable products.
RNG and Hydrogen
There are three other rules that hydrogen should follow:
- Leverage existing infrastructure where feasible.
- Use biological conversion systems when practicable.
- Manufacture multiple renewable products at the same installation when practicable.
So, here's a thought. A major piece of the hydrogen puzzle could be solved by manufacturing the hydrogen in tandem with RNG using biological systems. This strategy produces hydrogen while addressing all four rules, the three above and the first rule. This approach enables RNG and other renewables to bolster the value proposition and project financing attributes by using a "plug 'n' play" approach and creating multiple renewables.
Additionally, the hydrogen is biologically generated and is thus genuine "green hydrogen." This feature has significant commercial implications as it enables project owners to dispense with the convoluted, color-coded branding pontification.
Summary
In summary, committing billions of dollars solely betting on hydrogen to guarantee that the Nation is to cover 1% of its annual energy demand seems fiscally extravagant at best. In contrast, using a multi-tasking renewable manufacturing INITIATIVE that leverages existing assets makes sense on many levels. Sustainability collaboration will expose the greater community to real green hydrogen projects at various levels of development which will propel deployment and adaptation. With the superior economics of manufacturing hydrogen using a multi-tasking technology architecture, hydrogen and other renewables such as RNG and green ammonia will all garner greater exposure, commercial acceptance and adaptation, and increased incorporation into the economy accelerating the transition to a profitable and greener economy.