Hydrogen isn’t widely used at present. In Britain, current annual production is about 700,000 tonnes or 27 terawatt hours (TWh) of energy equivalent, according to the Committee on Climate Change. That’s just 1.5 per cent of total UK energy consumption. High production costs are one reason. Made by consuming hydrocarbon fuels, hydrogen can’t really compete for any application where these are an alternative. Decarbonisation could change the picture — out of necessity if nothing else. Electricity at present accounts for just 20 per cent of final energy consumption, and not all that other 80 per cent is easily electrifiable. With events such as last week’s judicial ruling against the expansion of London’s Heathrow airport, it is dawning that without a zero-carbon liquid fuel substitute, eliminating emissions may involve potentially unpopular behavioural change. Hydrogen is certainly an option to power such areas as heating and transportation. But to help materially in getting to net zero emissions by 2050, the CCC estimates that it will need to supplant a big chunk of the 80 per cent of Britain’s energy that comes from gas or liquid fuel. In the body’s so-called “full hydrogen” scenario, demand balloons from today’s 27TWh to 700TWh. Where is that hydrogen to come from? It won’t be from hydrocarbon feedstock without carbon capture and storage — technologies that have yet to be deployed economically at scale. Many are therefore pinning hopes on renewable energy making so-called “green hydrogen” using electrolysis. But how realistic is that, given the engineering properties of solar and wind farms? Low capacity factors are one reason most current renewables have theoretical production costs for hydrogen in the $4-$6 per kilogramme range, according to research from Eric Ingersoll of the consultancy, LucidCatalyst. That’s well above the $1-$2/kg cost from existing hydrocarbon sources. Unlike capital costs, which can be chiselled down, nature limits the amount that capacity factors can be increased. Of course, technological development will yield further advances in renewables. Remember that costs for offshore wind have fallen 75 per cent over the past seven years. But alternative sources shouldn’t be ignored. The main one is nuclear. It typically operates at a 90 per cent capacity factor, and is scalable without massive land use. The key is capital costs, which have historically been too high.
FT 1st March 2020 read more »