My first encounter with hydrogen was when in 2017, me and my team prepared an offer to the government of Russia to build a multimegawatt wind farm backed by a seasonal hydrogen storage in the Taman peninsula. The region suffered from electricity shortages in the summers when air-conditioning and industry demand peaked. Even then, the total cost of the project, expressed in CAPEX per MWh was lower, than for equivalent gas-fired CHP. Sure enough, the Ministry of Energy went with the CHP, costing almost twice our wind plus hydrogen.
IEA projects that power generation will be the main source of demand for hydrogen by 2030 and will only be overtaken by demand from aviation and marine fuel by 2050. With my recent client and a team of hydrogen experts, working in this industry for the last 15 years, we have explored the opportunities for hydrogen applications in the power industry, which I’d like to share here. Mind you, these are my conclusions, that do not necessarily match with those of my team or my client.
How do you generate power using hydrogen? First, you can generate power via fuel cells. The capacity of fuel cells is currently limited, with the average being 100 kW. This makes them problematic to use in large-scale grid applications. Second, you can mix hydrogen with natural gas, or mix coal or gas with ammonia, burn them, and generate electricity on the gas turbines. This seems to be the preferred way to generate electricity with hydrogen on a multimegawatt scale. Technologies to do that are still being developed and tested, but it is fair to say that by the end of this decade, all major gas turbine manufacturers will have a couple of hydrogen-ready turbines in their sales catalogs.
Source: IEA, 2023
What mystifies me, is why you need hydrogen-based power generation in the first place. To mix hydrogen with natural gas or ammonia with coal, you first must make “green” hydrogen. And how do you make it? Right, via electrolysis with electricity generated from hydro, wind, or sun. So, to make electricity with hydrogen you first have to
1) make electricity from sun/wind/hydro;
2) use electrolysis to make hydrogen;
3) store and transport hydrogen;
4) burn hydrogen with fossil fuels;
5) capture any leftover GHGs.
Just to drive it home: you build enormous infrastructure to make, store and transport hydrogen. You spend time and money to design and build special turbines, capable of running on pure hydrogen or hydrogen mix. You build systems to capture and store GHG emissions. And when you fire up that hydrogen power plant, you lose up to 82% of energy[1] in the process. For what? To make some clean kWh? Really? Well, go back to step 1, and there you have it!
According to the “Hydrogen ladder” by M. Liebreich, generating power with non-stored hydrogen is ultimately uncompetitive. What a surprise! Now hydrogen can have different uses in the power sector, not only directly burning it in the power plant. Short-duration grid balancing has slightly better chances of becoming adopted, but there we have lots of alternative solutions in the form of lithium-ion or redux-flow batteries or other battery chemistries like zinc-air or tried and tested hydro storage.
Best-case scenario, according to the “Hydrogen Ladder” – is using hydrogen for long-duration storage of excess renewable energy and subsequent power generation. The IEA in their recent “Renewables 2023” report show, that from 2023 to 2028 there will be about 4 terawatts of renewable generation capacity added worldwide (depending on the scenario). By 2030 renewables will account for half of all electricity generated. That would certainly mean that in some cases there will be an oversupply of clean energy, that could be stored in hydrogen and used when there is a shortage of energy.
Changes made - red underlines by me.
This brings me back to my Taman project, and investment decisions in cleantech in general. Hydrogen in power generation is overcomplicated, and overcomplicated projects carry much higher execution risk than simpler projects. Try building a wind farm. You will have enough risk management work on your hands, so you would not want the additional headache of building the hydrogen chain up to and including a power station.
In this energy transition, we must make smart choices on how to spend time and money in a way to make the most impact in the shortest time possible. The path to the decarbonization of the power sector has been clear now for several years – deploy more renewables, as fast as possible. Where battery storage will be needed, lithium-ion or redox-flow batteries will take of it most of the time. Simple and efficient. Hydrogen will have better uses elsewhere.
[1] https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/hydrogen-technology-faces-efficiency-disadvantage-in-power-storage-race-65162028