Green and clean

Hy­dro­gen is the fuel that could power the fu­ture – and save the planet Am­brose Evans-Pritchard

The Daily Telegraph - Business - - Front Page -

The stars are aligned for the eco­nomic take-off of clean hy­dro­gen. Af­ter three false starts in fifty years, the tech­nol­ogy is ripe. The pol­i­tics of cli­mate change are about to un­leash a shock wave of global in­vest­ment.

Vast in­creases in scale will slash the cost of pro­duc­tion over the next decade, mim­ick­ing the gains al­ready seen in wind, so­lar, and elec­tric ve­hi­cles.

The Aus­tralians came out with their na­tional hy­dro­gen strat­egy last Novem­ber, sketch­ing a new or­der where cheap hy­dro­gen from so­lar in Western Aus­tralia re­places the lost out­put of dy­ing coal. Brus­sels un­veiled its gi­gan­tic plan last week, call­ing for out­lays of €240bn-€380bn (£217bn) by 2030. It in­cludes a 40 gi­gawatt (GW) blitz of elec­trol­y­sers for pure green hy­dro­gen by the end of this decade.

As it hap­pens, the world’s big­gest pro­ducer of poly­mer mem­brane (PEM) elec­trol­y­sers able to split wa­ter mol­e­cules into oxy­gen and hy­dro­gen fast enough to but­tress wind and so­lar hap­pens to be a Bri­tish firm: ITM Power in Sh­effield. Its share price has risen by 1,500pc in 15 months, while oil ma­jors con­tinue their death spi­ral.

The Bri­tish pub­lic may not be aware, but this coun­try is a world leader in what is about to be­come the dom­i­nant en­ergy force of the 21st Cen­tury, so long as the Gov­ern­ment does not throw away the bo­nanza.

You know some­thing is up when Big Fi­nance is mo­bil­is­ing in earnest. Gold­man Sachs is all over it. True to form, the US bank has just pub­lished its num­ber-crunch­ing guide: The Rise of Clean Hy­dro­gen. It ar­gues that “blue” and “green” vari­ants will be so com­pet­i­tive that they could abate 45pc of all green­house emis­sions and be­come the back­bone of net-zero de­car­bon­i­sa­tion.

This is heady stuff even for ecoen­thu­si­asts. Bloomberg New En­ergy Fi­nance (BNEF) thinks it will be 24pc of global en­ergy by 2050, cal­cu­lat­ing that the cost of green hy­dro­gen could fall two thirds to $1.4/kg by 2030 and to $0.8/kg by 2050 (equal to $6 nat­u­ral gas). At that point it com­petes toe-to­toe with im­ported gas in Asia or Europe. BNEF says the right poli­cies could trig­ger in­vest­ment of $11 tril­lion (£8.7 tril­lion).

The broad story is by now well known. Hy­dro­gen will start to dis­place diesel in lor­ries, buses, and trains in the mid 2020s, us­ing fuel cell tech­nol­ogy. It will be blended with nat­u­ral gas for the heat­ing of build­ings up to 20pc us­ing ex­ist­ing in­fra­struc­ture. This is low-hang­ing fruit on the path to net-zero.

Clean hy­dro­gen will chal­lenge gas burned in “peaker” plants as a back-up for in­ter­mit­tent wind and so­lar. Ex­perts vary on the se­quenc­ing, but the over­all pic­ture is that hy­dro­gen rises through the gears rapidly as we near 2030 and then en­ters over­drive.

It will be turned into syn­thetic fu­els for ships and air­craft (yes, we can all keep fly­ing). Hy­dro­gen boil­ers will be in­stalled for heat­ing, with pre­cau­tions, since it is fa­mously com­bustible. It will dis­place coal and gas in steel, glass, ce­ment, chem­i­cals, and the pro­duc­tion of fer­tilis­ers.

Lo and behold, we ap­proach global net-zero with­out hav­ing to wear hair shirts, or shut our economies, or live on soy­beans. We do not have to bow to the green Tal­iban, our lat­ter day Pu­ri­tans – a breed im­mor­tally de­scribed by H.L Mencken as peo­ple with a “haunt­ing fear that some­one, some­where, may be happy”.

Blue hy­dro­gen is made from nat­u­ral gas, mit­i­gated by car­bon cap­ture, use and stor­age. It is not zero-car­bon, but it cuts most emis­sions and is much cheaper to­day than green hy­dro­gen made from wind and so­lar. The ad­van­tage will switch as re­new­able power falls to $20 MW/h and mass pro­duc­tion slashes the cost of elec­trol­y­sers. BNEF thinks green will win in the end.

How­ever, right now blue is ready to go. “We could build this very rapidly in the UK as soon as 2023 or 2024,” said Pro­fes­sor Stu­art Hazel­dine from Ed­in­burgh Univer­sity. Bri­tain has the ad­van­tage of de­pleted oil and gas wells in the North Sea that can be used for car­bon se­ques­tra­tion, along with the con­nect­ing net­work of pipe­lines. They are linked to the in­dus­trial clus­ters of Grange­mouth, Teesside and the Hum­ber, where hy­dro­gen is needed.

Blue hy­dro­gen is not an end in it­self. It is the ac­cel­er­a­tor, a tem­po­rary fuel to get the game go­ing. Its green cousin will pro­gres­sively take over. A pi­o­neer vari­ant is al­ready be­ing built on the Hum­ber us­ing Orsted wind power from tur­bines off­shore to make hy­dro­gen in an ITM elec­trol­yser. This is then used in a Phillips 66 re­fin­ery, an el­e­gant triple win.

The hy­dro­gen rev­o­lu­tion dove­tails with Bri­tain’s great gam­ble on off­shore wind, head­ing for 75 GW by mid­cen­tury. The log­i­cal endgame is the con­struc­tion of gi­ant wind farms in the shal­low wa­ters of the North Sea to gen­er­ate power for ex­clu­sive use in hy­dro­gen pro­duc­tion.

The po­ten­tial is al­most un­lim­ited. Bri­tain could achieve hy­dro­gen in­de­pen­dence and be­come a net ex­porter. At some point hy­dro­gen will trade as a com­mod­ity like Brent crude. We will stop track­ing oil fu­tures. We will track hy­dro­gen fu­tures.

The UK has another ad­van­tage. Hy­dro­gen is ex­pen­sive to store. The cheap­est op­tion is to use salt cav­erns and this is­land is pep­pered with ge­o­log­i­cal salt de­posits down the East coast of Eng­land.

The Gov­ern­ment is spend­ing £70m on a clutch of hy­dro­gen schemes, in­clud­ing Europe’s first big hy­dro­gen plants to heat homes. But it is small beer com­pared to the EU an­nounce­ments last week.

There was noth­ing in the Chan­cel­lor’s Sum­mer State­ment, heavy on dis­trac­tions such as a stamp duty hol­i­day, and too light on the fun­da­men­tal task of eco­nomic gen­er­a­tion. “It was a wasted op­por­tu­nity. We need to start mak­ing things again,” said Prof Hazel­dine.

For the world as a whole, a global car­bon price would pull for­ward the switch to clean hy­dro­gen. In my view, it is com­ing in the US, prob­a­bly along the lines of HR 763, a bill in Congress with Left-Right sup­port that com­bines a car­bon tax and with a div­i­dend. The money is ro­tated back into peo­ple’s pock­ets. The higher the price, the big­ger the cheque. That se­cures po­lit­i­cal con­sent.

We are mov­ing into a post-Trump world where the US and Europe will both be pur­su­ing “green deals” with a car­bon bor­der tax to fight free rid­ers. Once that hap­pens, China will be forced to fol­low suit.

There are too many mov­ing parts to know when clean hy­dro­gen will catch fire – so to speak – but it is com­ing sooner than al­most any­body could have imag­ined just two years ago.

We have within our grasp the fi­nal clinch­ing tool for de­car­bon­i­sa­tion. We can con­tem­plate a net-zero world with­out hav­ing to give up our lux­u­ri­ous life­styles. Cel­e­brate.

Hy­dro­gen is about to be­come the dom­i­nant en­ergy force of the 21st cen­tury


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