Hy­dro­gen on the rise as clean fuel

China Daily European Weekly - - Cover Story - The au­thor is an en­ergy econ­o­mist at the Eco­nomic Re­search In­sti­tute for ASEAN and East Asia. The views do not nec­es­sar­ily re­flect those of China Daily.

Mar­ket con­di­tions, gains in tech­nol­ogy build mo­men­tum for a cru­cial role for the gas in the fu­ture en­ergy land­scape

then re­lease it back to the power grid in the other sea­sons.

There­fore, one can say that when hy­dro­gen tech­nolo­gies are com­mer­cially ready, hy­dro­gen and its re­lated in­fras­truc­ture will surely be­come as strate­gic an en­ergy form as fos­sil fu­els are to­day. The key ques­tion is when.

Cur­rently, hy­dro­gen tech­nolo­gies still face lim­i­ta­tions, es­pe­cially re­gard­ing the cost and dura­bil­ity of the fuel cell stack, the en­ergy con­ver­sion ef­fi­ciency in pro­duc­ing hy­dro­gen, and the cost and con­ve­nience of trans­port­ing it. But new, fa­vor­able mo­men­tums are com­ing, not only from tech­no­log­i­cal progress but also from mar­ket con­di­tions.

Fuel cell tech­nolo­gies, es­pe­cially based on hy­dro­gen, have come a long way since the last rush to the con­cept around the be­gin­ning of the 2000s. Lead­ing fuel cell man­u­fac­tur­ers these days are claim­ing 5,000-plus hours of dura­bil­ity, suf­fi­cient for mileage of more than 160,000 km. The cost of each kilo­watt has also come down, from $124 (105 euros; £95) per kW in 2006 to $53 as of 2016.

At the same time, the tech­nolo­gies for pro­duc­tion and trans­porta­tion of hy­dro­gen have demon­strated sig­nif­i­cant progress, in terms of both en­ergy con­ver­sion ef­fi­ciency and the costs of de­liv­er­ing hy­dro­gen along the sup­ply chain.

The US De­part­ment of En­ergy is ex­pect­ing the fuel cell cost to fall to $40 per kW, to­gether with the hy­dro­gen cost at the fuel sta­tion dis­penser com­ing down to $4 per kg, by 2020. At these lev­els, hy­dro­gen-pow­ered ve­hi­cles will be­come eco­nom­i­cally com­pet­i­tive with con­ven­tional fos­sil fuel-based ve­hi­cles in cer­tain types of fleets.

In the past decade, there have also been game-chang­ing de­vel­op­ments in new re­new­ables, es­pe­cially wind, so­lar, biomass, biofuel and waste-to-en­ergy. These ca­pac­i­ties have been built so fast that in many coun­tries, the ab­sorp­tion of them by the power grids has be­come an in­creas­ingly heavy bur­den, due to daily in­ter­mit­tency as well as sea­son­al­ity of these re­new­ables.

While the wast­ing of re­new­able en­ergy has be­come a con­cern, power grid op­er­a­tors have been obliged to build up more stor­age ca­pac­ity, cur­rently fo­cus­ing on pump hy­dropower and sta­tion­ary bat­ter­ies. These are ex­pen­sive so­lu­tions with lim­ited and non­flex­i­ble ca­pac­ity. Many peo­ple ex­pect that the in­creas­ing fleets of elec­tric ve­hi­cles will be­come an im­por­tant fac­tor to ab­sorb the in­ter­mit­tency of re­new­ables in the near fu­ture. But even then, the ca­pac­ity would be in­suf­fi­cient to han­dle sea­sonal fluc­tu­a­tion of re­new­ables. Hy­dro­gen can do so, how­ever.

Fi­nally, fuel cell elec­tric ve­hi­cles are com­ple­men­tary to bat­tery elec­tric ve­hi­cle fleets. This is be­cause bat­tery elec­tric ve­hi­cles, lim­ited by the en­ergy in­ten­sity and dura­bil­ity of bat­ter­ies, are mostly suit­able for ur­ban and short-dis­tance trips.

But we are yet to see a com­mon and firm vi­sion on hy­dro­gen formed among global pol­i­cy­mak­ers and in­dus­try play­ers. With­out that, co­or­di­na­tion on poli­cies to accelerate the de­vel­op­ment of the tech­nolo­gies, mar­ket and in­fras­truc­ture for hy­dro­gen is not likely. One should be re­minded how the learn­ing curve was re­al­ized for so­lar and wind tech­nolo­gies in the past two decades.

Strong and ap­pro­pri­ate poli­cies will cre­ate the ini­tial crit­i­cal mass of de­mand, so as to dras­ti­cally bring down costs while im­prov­ing the per­for­mance of the new tech­nolo­gies. That will fur­ther en­able new niche mar­kets to adopt the tech­nolo­gies. A larger mar­ket will in­vite more in­vest­ment into the sup­ply chain as well as the in­fras­truc­ture, while tech­nolo­gies keep ad­vanc­ing due to the learn­ing ef­fect. In the process, economies of scale will grad­u­ally kick in, as well as perhaps the lock-in ef­fect in form­ing new so­cial-tech­ni­cal sys­tems.

A global strat­egy to co­or­di­nate the poli­cies and in­dus­tries’ moves will add to the ef­fec­tive­ness as well as cer­tainty of such ac­cel­er­a­tion ef­fects.


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