H2Tech - Q3 2022 - 25

SPECIAL FOCUS: PATHWAYS FOR SUSTAINABLE H2
How to improve the economics of green H2
R. BHAMIDIPATI, Victaulic, Houston, Texas
The rapid growth and deployment of H2
generation projects
for energy storage, decarbonization and clean energy initiatives
are gaining momentum. This quest for clean energy
production and storage will be ongoing for decades, as the energy
transition focuses on long-term, larger-scale and clean fuel
production and storage solutions. However, for this movement
to truly take hold, the cost of production must be low enough
to increase the investment in H2
production technologies.
Who is investing in green H2
try report1
? According to a recent indusfrom
the globally led Hydrogen Council, there are
more than 200 H2 projects in the works, exceeding $300 B
in total investment. Approximately $80 B of this investment
comprises mature projects. More than 30 countries have released
H2
roadmaps, and governments worldwide have committed
public funding in support of decarbonization through
H2
production technologies.
In support of these initiatives, large-scale partnerships are
forming to build localized H2
hubs for the emerging H2
economy.
The partners who are investing in green energy production
in support of net-zero emissions targets include:
* Global oil and gas companies
* Governments
* Power producers
* Equipment manufacturers
* Transportation firms.
One such initiative, the NEOM Project in Saudi Arabia,
plans to produce 650 tpd of green H2
by 100% renewable sources. Partnerships in Europe, Australia,
North America, Asia and South America have also announced
large-scale H2
infrastructure development projects.
The bridge to green H2
production. Brown and gray
H2-produced from fossil fuels via steam methane reformis
defined as SMR with carbon capture,
production is responsible for
roughly 830 MMtpy of carbon dioxide (CO2
) each year. The
increased global focus on decarbonization goals may reduce
future investments in the development of SMR, thereby impacting
the production of brown and gray H2
will continue to remain as a primary H2
with added CCUS features allowing the CO2
utilized for industrial applications.
. Presently, SMR
production method,
to be stored or
ing (SMR)-account for approximately 95% of global H2
production. Blue H2
utilization and storage (CCUS). The International Energy
Agency (IEA) has said that H2
According to Frost & Sullivan, green H2 accounts for less
than 1% of total H2 produced globally.2
needed, and blue H2
A bridge to green H2
will likely remain as that bridge.
The power mix, and an increasing need for larger-scale
energy storage. As the global power generation mix continues
to grow toward wind and solar, long-term storage on
a large scale is a crucial factor required to offset closures of
coal, nuclear and other baseload assets.
How can utilities best store large quantities (gigawatts or
terawatts) of power for longer durations than battery energy
storage systems (BESS) or other short-duration methods?
Historically, there has been only one primary and proven
means of storage-pumped energy storage (PES) with hydroelectric
plants. Therefore, there is room for more largescale
projects, but these projects can take many years to permit
and develop, often requiring billions of dollars to build,
and can also be limited by geographic constraints.
As history has shown with solar photovoltaic (PV) and
via electrolysis powered
wind technologies, when investments advance and technology
use increases, then costs come down. The U.S. Energy
Information Administration (EIA) has noted that 1) the cost
of utility-scale battery storage in the U.S. fell almost 70%
between 2015 and 2018, 2) projects from the U.S. National
Renewable Energy Laboratory (NREL) have increased battery
production, and 3) market competition will continue to
drive costs down. The NREL also recently said that it sees
mid-range costs for lithium-ion batteries falling another 45%
by 2030. Similarly, several sources are predicting that costs
related to electrolyzer technology will decrease by 60% or
more by 2030.
What will drive down green H2
production capital costs?
Although the cost of electrolyzer technology is expected to
decrease over the next 10 yr, the current cost of generating
green H2
natural gas production. So, what can be done to improve the
economics of decarbonization?
Two areas of focus to move green H2
toward parity with
other fuel and energy storage measures include:
1. The cost of energy
2. Capital costs for H2
plants.
The push toward economies of scale for green H2
is driving
innovation in H2 production technologies, but that is not the
only way to drive down costs. As a proven technology, elecH2Tech
| Q3 2022 25
via electrolysis is significantly higher than that of
is
H2Tech - Q3 2022

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