Prospects and Disadvantages of Hydrogen Energy

Перспективы и недостатки водородной энергетики

Fuel cells are used to store and generate energy from hydrogen. The first hydrogen fuel cell was designed by English scientist William Grove in the 30s. 19 century. Grove and Christian Schönbein, who worked in parallel with him, demonstrated the possibility of producing energy in a hydrogen-oxygen fuel cell using an acidic electrolyte..

In 1959, Francis T. Bacon from Cambridge added ion exchange membrane to hydrogen fuel cell to facilitate transport of hydroxide ions. The US government and NASA immediately became interested in Bacon's invention., the updated fuel cell began to be used on the Apollo spacecraft as the main source of energy during their flights.

Unlike oxygen, hydrogen practically does not occur on earth in its pure form and therefore is extracted from other compounds using various chemical methods..

According to these methods, it is divided into color gradations..

Green - produced from renewable energy sources by water electrolysis. Everything, what is needed for this: water, electrolyzer and large power supply.

Blue - produced from natural gas, and hazardous waste is captured for recycling. Nevertheless, this method cannot be called perfectly clean..

Pink or red - produced by atomic energy.

Gray - hydrogen is obtained by conversion of methane. During its production, hazardous waste is emitted into the atmosphere..

Brown - hydrogen is obtained as a result of coal gasification. This method also leaves behind greenhouse gases..

There are still technologies for producing biohydrogen from garbage and ethanol., but their share is extremely small.

Production cost by type of hydrogen, dollar per kilogram

Green10
Blue2 $
Red2 $
Gray2—2,5 $
Brown2—2,5 $

10 $

Hydrogen energy

Coal processing accounts for 18% hydrogen production, 4% provided by green hydrogen and 78% - processing of natural gas and oil. Manufacturing methods, fossil fuel, Lead to 830 million tonnes of CO2 emissions every year, which equals UK and Indonesia emissions, put together. Still, hydrogen is a cleaner alternative to conventional fuels..

There are three main sources of emissions in the world, warming the climate: transport, power generation and industry. Hydrogen can be used in all three areas. When used in fuel cells, hydrogen energy leaves minimal losses, and after use, only water remains as a by-product, from which hydrogen can be extracted again.

Перспективы и недостатки водородной энергетики

Industry Outlook

According to the IEA report, by 2050, the global demand for hydrogen should reach 528 million tons - against 87 million in 2020, - and its share in world consumption will be 18%, of them 10% will account for green hydrogen.

By 2050, the IEA plans to reduce the cost of producing this clean fuel to 2 $ per kilogram, which is significantly lower than the current 10 $. This will happen thanks to the development of renewable energy technologies and the cheaper production of wind and solar energy..

In June 2020, Germany announced the implementation of a national hydrogen strategy with an investment of 7 billion euros, to become a leader in this field.

Japan, France, South Korea, Australia, Netherlands and Norway started their hydrogen course before Germany, and Japan did it before anyone else - in December 2017.

In July 2020, the Ministry of Energy prepared a plan for the development of hydrogen energy in the Russian Federation for the period 2020-2024. Rosatom is going to produce hydrogen, Gazprom and Novatek. The roadmap includes the following measures:

  • support of pilot projects for the production of hydrogen;
  • incentives for exporters and buyers in the domestic market;
  • the first hydrogen plants will be launched in 2024 at nuclear power plants, gas production and mineral processing facilities.

HydrogenOne Capital is the world's first investment fund in 2021, green hydrogen oriented, announced listing on the London Stock Exchange. The fund invests in projects with a capacity of 20-100 MW with the possibility of expanding them up to 500 MW.

Benefits of hydrogen energy

High applicability. Vehicle electrification will help reduce air emissions, but aviation, long distance sea and freight transportation is difficult to convert to electricity use, because these sectors require high energy density fuels. Green hydrogen can meet these needs. for example, Airbus has unveiled hydrogen-powered aircraft concepts and hopes to have it operational by 2035.

Nikola builds semi-trailers, battery-powered, and hydrogen. The company declares, that its fuel cells can operate at lower temperatures, than batteries. And they are lighter, making them more practical for trucks and other heavy equipment. Nikola also states, that the range of such a truck would be 900 miles on a hydrogen tank. For comparison: Tesla Semi battery powered, which could go into production later this year or in 2022, declared range - 200-300 miles.

Also, Toyota presented their similar models of transport., Honda and BMW.

Fuel cell electric vehicle refueling times are on average less than four minutes. Moreover, unlike batteries, they do not need to be recharged.. Since they can work independently of the network, They can be used as backup generators of electricity or heat.

An important element of the transition to hydrogen is its use in housing and communal services. In addition to pilot projects in the UK, Leeds will become the first city, the power supply of which will be completely hydrogen. According to plan, all gas networks and transport equipment will be transferred to it.

Hydrogen reserves are virtually limitless. Since it is found almost everywhere, it can be used there, where is it produced. Unlike batteries, which cannot store large amounts of electricity for a long time, hydrogen can be produced from surplus renewable energy and stored in large quantities.

Energy efficiency. Hydrogen contains almost three times as much energy, than fossil fuels, therefore, it takes much less to do any work. for example, compared to power plant, operating on fuel combustion with an efficiency of 33 to 35%, hydrogen fuel cells will perform the same function with efficiency up to 65%. For example, solar cells have an efficiency - 20%, and for windmills - 40%.

The world's largest power plant was launched in the spring of 2020 in the city of Fukushima, hydrogen-powered. To power the electrolysis plants, solar batteries with a total power are placed on it. 20 MW. In total, the station produces 1.2 thousand cubic meters of hydrogen per hour..

In cars, fuel cells use 40-60% of fuel energy, and also provide a reduction in its consumption by 50%.

Green hydrogen is a great medium for storing energy. for example, Germany has a problem with the power system. On clear and windy days, solar screens and wind turbines in the north generate more electricity., what can this part of the country consume. Because of this, Germany is forced to sell surplus electricity to neighboring countries at a loss.. Excess electricity from renewable energy sources can be stored as hydrogen, and then burn to generate electricity, when it is necessary.

Disadvantages of hydrogen energy

Green hydrogen cost. As mentioned above, it is the cost of producing the purest type of hydrogen that poses the most powerful obstacles to its development. According to the words and forecasts of the Ministry of Energy of the Russian Federation, the prospects for hydrogen energy are associated with the reduction in the cost of hydrogen, produced by electrolysis of water. As the main factors for ensuring the competitiveness of green hydrogen, a prospective reduction in capital costs for electrolyzers is considered., as well as the cost of electricity from renewable energy sources.

When the production of electrolysers is scaled up, their cost may decrease from the current 1000 to 200 $/kW by 2050, by J. P. Morgan - even before 100 $/kw. If this scenario is realized by 2050, the cost of electrolysers may decrease to less than 2 $/Kg. But taking into account the application of various programs of state subsidies for hydrogen energy, these periods can be reduced..

Cost of green hydrogen production by country by 2050, euros for 1 Kg

Argentina1,5
Australia1,25
Brazil1,25
Canada1,5
Chile1,25
China1,25
France2
Germany2,25
India1,25
Japan2,75
Morocco1,25
Poland2,5
Russia1,5

1,5

Flammability. Compared to gasoline, natural gas and propane hydrogen is more flammable in air, the slightest cracks in the tank can lead to tragedy. But some critics are wrong, when they say, that with the development of hydrogen energy "the world will sit on a huge powder keg". Since hydrogen is very light - about 57 times easier, than gasoline vapors, - it can quickly dissipate in the atmosphere, and this is a positive factor for safety.

Storage and transportation. Since hydrogen is the lightest among the chemical elements, in a given volume it fits much less, than other fuels. for example, a much larger hydrogen gas cylinder will be required, to drive a given distance by car. The existing gas tanks are too small, to hold the amount of hydrogen, which is needed for the distance, which will cover a full gas tank. To solve this problem, the methods of converting hydrogen into a liquid or gaseous state are being modernized.. It must either be cooled to −253 ° C, to liquefy, or compress to pressure, 700 times higher than atmospheric, so that it can be delivered as compressed gas.

Currently, hydrogen is transported through special pipelines, in tank trucks for low-temperature liquids, in tubular trailers, carrying hydrogen gas, by rail or barge.

In turn, governments of countries are already "booking" future volumes of hydrogen raw materials, negotiating and signing relevant international agreements. Examples include the German-Moroccan Green Hydrogen Cooperation Agreement in June 2020., the Japanese-Australian Joint Statement on Cooperation in the Field of Hydrogen and Fuel Cells in January 2020 and the Russian-German Declaration of Intent on Cooperation in the Field of Sustainable Energy.

Production

There is a large selection of companies in hydrogen energy. The largest representatives are hydrogen producers, which mainly use the cheapest production method - steam reforming. Smaller companies focus exclusively on specific uses of hydrogen. They can mainly be divided into electrolyzer manufacturers and fuel cell manufacturers.. Some companies are working on, to become a fully vertically integrated hydrogen energy supplier. Let's analyze each category separately.

Hydrogen producers

Air Products. Air Products' core business is the production of atmospheric and process gases and related equipment for a variety of industries., including oil refining, petrochemistry and metallurgy.

The company in 2020 announced plans to build a plant for the production of environmentally friendly hydrogen in Saudi Arabia, powered by wind and solar power 4 GW, - now it is the largest project in the world. The completed plant will produce 650 tons of green hydrogen daily, which is enough to operate about 20 thousand buses.

Linde - one of the largest companies in the world, specializing in industrial technologies for the preparation, separation and liquefaction of natural gas. In 2021, the company announced, that signed a long-term agreement with Infineon Technologies for the production and storage of environmentally friendly hydrogen. Linde will build, own and operate a 2 MW electrolysis plant in Austria. The plant will produce green hydrogen using proton exchange membrane technology (NS) from ITM Power.

Cummins presented a hydrogen strategy in November 2020. In 2019, the company acquired Hydrogenics, as a result, received a technology for the production of fuel cells and electrolyzers.

All of these are large companies with extensive experience in the field of industrial gas.. Their main focus today is on hydrogen gray., but they are also moving to cleaner solutions. The shares of these companies are habitually growing with the market., and you can talk, that among the rest of the representatives they are reasonably priced.

Comparative indicators of companies, billion dollars

Market capitalizationRevenue in 2020 yearP / EP / S
Air Products (APD)61,688,8629,596,97
Linde (LIN)132,4127,0552,724,69
Cummins (CMI)36,4919,5621,591,88

Fuel cell companies

Ballard Power Systems specializes in the integration of fuel cells into buses and trucks. Ballard provides fuel cell systems for other companies, who integrate them into their cars.

Bloom Energy manufactures fuel cell servers, they represent stationary power systems, mainly intended for backup power supply. The facility also manufactures electrolysers and presented a hydrogen strategy in July 2020..

FuelCell Energy works in the same sector, as Bloom Energy. Produces power plants based on stationary fuel cells.

Plug Power aims to become a major producer of environmentally friendly hydrogen. The company acquired enterprises for the production of its own electrolysers and hydrogen filling stations. Plug Power works with clean energy producers Brookfield Renewable Partners (BEP) and Apex Clean Energy on the construction of hydrogen plants. The company is building a nationwide network of clean hydrogen.

PowerCell Sweden produces fuel cells mainly for transport systems. The company has a deal with Bosch. Bosch can manufacture and sell fuel cells based on PowerCell Sweden design.

Comparative indicators of companies, million dollars

Market capitalizationRevenue in 2020 yearP / S
Ballard Power Systems (BLDP)10 430117,6572,10
Bloom Energy (BE)6400758,406,44
FuelCell Energy (FCEL)582070,8756,53
Plug Power (PLUG)28 760307,5466,94
PowerCell Sweden (PCELF)275010,31266,12

Electrolytic cell manufacturers

We will not analyze each of the companies in detail., since they are all traded on the OTC market so far. These companies are unprofitable, therefore, the coefficient P is not included here / E.

Comparative indicators of companies, million dollars

Market capitalizationRevenue in 2020 yearP / S
McPhy Energy (MPHYF)117013,9655,49
In the ASA557055,3592,24
ITM Power (ITMPF)4506,31594,46

Conclusion

Renewables experienced an unusual boom in popularity in 2020. This was also facilitated by the year of the end of the Republican rule in the United States., and the attractiveness of ESG investments, as well as soft credit policy. All this has created an economically attractive environment for many companies in this area..

While there are many options for investing in the clean hydrogen economy, while entering the market is risky. These companies are still growing, and they need to reach a large scale, to make a profit in the future. A good base of choice is essential to investing in hydrogen today, activity-based, evaluations, partners and management.

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