What Exactly Is Green Hydrogen?
Interest in green hydrogen is skyrocketing among major oil and gas firms. And the term green hydrogen is thrown around a lot these days, but what exactly is green Hydrogen?
For a colorless gas, hydrogen gets referred to in very colorful terms.
According to the nomenclature used by market research firm Wood Mackenzie, most of the gas that is already widely used as an industrial chemical is either brown, if it’s made through the gasification of coal or lignite; or gray, if it is made through steam methane reformation, which typically uses natural gas as the feedstock. Neither of these processes is exactly carbon-friendly.
A purportedly cleaner option is known as blue hydrogen, where the gas is produced by steam methane reformation but the emissions are curtailed using carbon capture and storage. This process could roughly halve the amount of carbon produced, but it’s still far from emissions-free.
Green hydrogen, in contrast, could almost eliminate emissions by using renewable energy — increasingly abundant and often generated at less-than-ideal times — to power the electrolysis of water.
How do you make green hydrogen?
With electrolysis, all you need to produce large amounts of hydrogen is water, a big electrolyzer and plentiful supplies of electricity.
If the electricity comes from renewable sources such as wind, solar or hydro, then the hydrogen is effectively green; the only carbon emissions are from those embodied in the generation infrastructure.
The challenge right now is that big electrolyzers are in short supply, and plentiful supplies of renewable electricity still come at a significant price.
Compared to more established production processes, electrolysis is very expensive, so the market for electrolyzers has been small.
And while renewable energy production is now sizable enough to cause duck curves in California and grid problems in Germany, overproduction is a relatively recent development. Most energy markets still have a need for plenty of renewables just to serve the grid.
Why is It suddenly such a big deal?
One of the paths to near-total decarbonization is electrifying the whole energy system and using clean renewable power. But electrifying the entire energy system would be difficult, or at least much more expensive than combining renewable generation with low-carbon fuels. Green hydrogen is one of several potential low-carbon fuels that could take the place of today’s fossil hydrocarbons.
Admittedly, hydrogen is far from ideal as a fuel. Its low density makes it hard to store and move around. And its flammability can be a problem, as a Norwegian hydrogen filling station blast highlighted in June 2019.
But other low-carbon fuels have problems too, not least of which is cost. And since most of them require the production of green hydrogen as a precursor, why not just stick with the original product?
Proponents point out that hydrogen is already widely used by industry, so technical problems relating to storage and transport are not likely to be insurmountable. Plus, the gas is potentially very versatile, with possible applications in areas ranging from heating and long-term energy storage to transportation.
The opportunity for green hydrogen to be applied across a wide range of sectors means there is a correspondingly large number of companies that could benefit from a burgeoning hydrogen fuel economy. Of these, perhaps the most significant are the oil and gas firms that are increasingly facing calls to cut back on fossil fuel production.
Several oil majors are among the players jostling for pole position in green hydrogen development. Shell Nederland, for example, confirmed in May that it had joined forces with energy company Eneco to bid for capacity in the latest Dutch offshore wind tender so that it could create a record-breaking hydrogen cluster in the Netherlands. Days later, BP’s solar developer Lightsource BP revealed that it was mulling the development of an Australian green hydrogen plant powered by 1.5 gigawatts of wind and solar capacity.
Big Oil’s interest in green hydrogen could be critical in getting the fuel through to commercial viability. Cutting the cost of green hydrogen production will require massive investment and massive scale, something the oil majors are uniquely positioned to provide.