Bob Beth looks at current global trends around hydrogen generation from renewable energy, and drills into the benefits and opportunities for Aotearoa New Zealand to take a policy leadership role – and be open for business to accelerate the adoption of hydrogen infrastructure.
Advances in energy capture are advances in human destiny.
– Steven Pinker “Enlightenment Now…”
The current exponential growth in adoption of solar and wind energy has changed the way we think about energy. It is unlocking new distributed energy generation models and catapulting these technologies down a cost curve that begins to reveal a low carbon economy. These advances, however, will stagnate if a significant portion of renewable generated electricity can not be stored in large amounts across seasons and transported to where it is needed.
Battery storage technologies play a significant role in the energy transformation pathway and must be complemented when they reach their limits such as low energy density or high self discharge rates. Electrolysing hydrogen from renewable electricity captures the value of the energy even during times of excess generation (or curtailment), and stores it for long periods of time without degradation or losses for future use in transportation, industrial applications, or as a chemical feedstock. Many energy experts agree on the eventuality of hydrogen as a vector for decarbonisation, regardless of their outlook on economic and clean energy policy trends.
Critics dismiss the near term viability of hydrogen from the perspective of the single issue of energy efficiency (i.e. using more electricity), that hydrogen, as a carrier of energy, is considerably less efficient than battery storage. However, a system-level approach reveals the distinct advantages of a hydrogen storage system when considering the greater picture.
For example, in heavy vehicle transport, the axle weight on the road is the limiting factor and the payload is limited by how much the rest of the vehicle weighs. For long distance heavy vehicles, such as trucks and buses, battery weight limits payload and range. However, hydrogen has a much greater energy density than battery storage, which enables comparable distances and payloads to existing long haul diesel vehicles. Furthermore, a hydrogen vehicle will take ~3-5 minutes to fill up, whereas a long-haul battery truck may need to be taken off the road for multiple hours, costing the freight operator time, distance and money. These considerations are often overlooked when considering just energy efficiency, however in the case above, a systems-level approach highlights substantial differences. The freight operator may prefer to look at things from a different perspective, such as volume of goods transported per vehicle, cost per tonne-kilometer or overall uptime of their vehicles.
Additionally, for a great deal of countries, electricity makes up a small fraction of the overall energy mix, and many industrial processes rely on fossil fuels not only for energy and heat but also for the hydrogen embodied in the fossil fuel molecules themselves. Ammonia (NH3) is made by combining Nitrogen (N2) from air with hydrogen from natural gas (CH4). Both conventional and biofuel refining processes consume large volumes of hydrogen to modify chain-lengths and create fuels suitable for today’s engines. Electrolysis using renewables can “electrify” these industries which traditionally cannot be electrified through supply of electrons alone. Providing clean hydrogen to these processes will decrease, and eventually eliminate fossil input, enabling deep decarbonisation well beyond what can be done with battery storage alone. This is a unique capability of hydrogen regardless of energy efficiency.
In the absence of storing large quantities of solar and wind power, clean electricity is wasted, dissipated, or curtailed. Instead a clean, renewable, low cost, zero carbon method for storing and transporting energy is poised to become viable by using renewable electricity to split water into hydrogen and oxygen using electrolysis.
Extensive global investment in hydrogen R & D is being undertaken by a wide range of public and private sector organisations to increase efficiency and decrease costs of electrolysers and fuel cells and also to increase scale and export viability.
The green hydrogen revolution has started, and it won’t be stopped
‘The price of electrolysers went from between €2 and €4 million per MW a couple of years ago, to around half a million now. This means the main driver for the cost of hydrogen produced by electricity is now electricity itself, which represents three quarters of the cost of production.
As green electricity gets cheaper every day, low cost Green Hydrogen is coming. In parallel, as with solar and wind, the cost of hydrogen production is falling exponentially, as system sizes and production volumes grow, while performance improves.’
by Raphael Schoentgen (2018)
Solar and wind adoption is growing exponentially, yet unevenly around the globe. We see periods during the day when the electric grids in certain locations just cannot utilize all the renewable electricity they produce (or receive). Hydrogen electrolysers can be turned on during these periods of excess renewable electricity generation helping to ramp load on the grids and keep them in balance. This also gives a low cost of electricity for hydrogen production.
The single issue of comparative inefficiency
Does the current inefficiency for generating green electrolytic hydrogen, even though it is rapidly improving, matter anywhere to the degree that inefficiency concerns us when the sourcing of fossil electricity has a high input cost and globally polluting externalities?
I believe that certain experts fixate on their conclusions formed the first time they evaluate a given technology or context. In the past this may not have been problematic but today in times of accelerating and exponential change, experts have a responsibility to evaluate afresh.
The imperative of fresh snapshots in times of accelerating change
I have been deeply involved in computing since the early 1970’s and across the advent of semiconductors, and know that, although we are steeped in Moore’s Law, we are also often in “Future Shock” with the increasing power and affordability of computing. Today we are glued to our pocket supercomputers, for that is truly what the smartphones of today are.
While change is a constant, certain industries seem to retain relative stability. For instance, the household electric plug and the voltages supplied to it have not changed in over a century. Similarly the automobile is still largely powered by the internal combustion engine and features greatly improved efficiency through the years, but is still fundamentally a century old technology. Yet today’s electric vehicles have a fraction of the moving parts.
Even constant and never-ending improvement will be overwhelmed
by exponential accelerating technologies
Ray Kurzweil proposed “The Law of Accelerating Returns“, according to which the rate of change in a wide variety of evolutionary systems (including but not limited to the growth of technology) tends to increase exponentially. According to Kurzweil, the rate of change in the 21st century will be 20,000 times greater than in the 20th century. My grandparents were born before the airplane and lived to see the era of mass global jet travel. What will today’s younger generation live to see?
Can we still reliably forecast the future by extrapolating from the past? New technologies can be initially overhyped yet underperform in the near term. The good ones reach tipping points and are adopted at a pace and extent typically unimaginable. Who could have foreseen two decades ago that almost every teenager in the developed world would have a mobile phone today?
What sea changes will we experience in the twenties?
For those who have worked passionately to accelerate solar and wind adoption, the exponential rate of growth has been a surprise, albeit a wonderful surprise. Meanwhile, the official forecasting agencies of the world, such as the International Energy Agency consistently underestimate the growth. The latter largely base their forecasts on extrapolation.
This has mattered hugely. It has mattered because many incumbent industries such as electric utilities have based their plans (or lack of plans) to transform the electric grid to handle renewables – on certain official forecasts. This has led to a largely unanticipated situation where a significant portion of renewable energy is wasted, dissipated, or curtailed.
Let us not make the same forecasting mistakes with green electrolytic hydrogen. Hydrogen generating components have not yet gained the massive cost reduction benefits through scale that solar, wind, and lithium batteries have. This is rapidly changing. Quoting from the International Renewable Energy Agency Report (2018) section on Policy Insights, “Key hydrogen technologies are maturing. Scale-up can yield the necessary technology cost reductions.” Globally, 2018 will be seen as the year when green electrolytic hydrogen became central to the dialogue as a carrier of renewable energy.
Enter Aotearoa New Zealand
New Zealand is recognised as having one of the best wind resources of any country in the world thanks to its location, with the country lying across the prevailing westerly winds in an area long referred to by sailors as the ‘Roaring Forties’.
As anyone who lives or visits New Zealand knows, the wind blows and blows, as the North Sea does in Europe, and this region has seen extensive and successful offshore and onshore wind resource development.
To wit: there is a Maori proverb or whakatauki that begins with:
Whakataka te hau ki te uru
Whakataka te hau ki te tonga
Cease the winds from the west
Cease the winds from the south
Wind is clearly an underutilised renewable resource.
New Zealand currently generates approximately 80 percent of its electricity, mainly from renewable hydro and geothermal sources, but only 40 percent of its overall energy needs are met by electricity, the remaining 60 percent is derived from fossil fuels, used mainly for heavy vehicle transport and industrial process heat.
In order to grow the proportion of overall energy supplied by electricity, New Zealand must leverage its abundance of natural, renewable generating capacity. As transport electrifies there will be massive new demand for energy and strain on the existing transmission grid. A combination of new renewables and energy storage will be required to smooth intermittency and match diurnal loads and seasonal variation. Electrolysing hydrogen can play a significant role in all of the above, ramping to smooth the grid, turning down to shed load, and storing large volumes of hydrogen over seasonal timespans.
Furthermore, hydrogen can enable the economics of these renewable projects by opening new markets for renewable electricity such as long-haul transport and other industrial applications. Additionally, the domestic market for industrial hydrogen is currently supplied by steam reforming of methane, which releases significant greenhouse gases; this can be supplanted by electrolysing hydrogen from behind the meter distributed renewable electricity, which removes the need for additional grid transmission capacity and costs.
New industrial applications will grow the portion of energy supplied by electricity, which is imperative to meet New Zealand’s ambition and GHG reduction targets.
Several nations and many global companies are looking for contexts where they can take existing proven clean energy technologies to scale deployments. For instance, Scotland has figured out how to be the recipient of significant investment, similarly New Zealand’s government policy must clearly outline their ambition to be open for business and to attract international investment in renewable energy advancement.
In 2017, Japan’s population was 126.8 million people compared to 4.8 million people in New Zealand. The Japanese government and its industry partners are reaching out to select nations to help supply Japan with green hydrogen. There is a sense that 5 percent of Japan’s demand for green hydrogen can be met from New Zealand.
Massive new demand for electricity is unfolding and can be accelerated through appropriate policies and education of consumers and industry. There are approximately 20 wind farms that have had resource consents for development in New Zealand, but are yet to eventuate due to a perceived lack of demand for their electricity. In addition, a 250 MW geothermal plant is already consented and New Zealand has an additional 500 MW of geothermal potential. Electrolysing hydrogen can be a key anchor tenant or customer for the power generated from these renewable resources, which can be used to accelerate the deployment of renewables across New Zealand. These are the potent natural resources in New Zealand that will create jobs and add substantial value to the economy.
New Zealand has a history of being a testbed for social and technological innovation, as well as having pristine natural beauty and eco-friendly reputation. Yet each year, thousands of tonnes of CO2 are emitted by tourists enjoying this reputation, flying to New Zealand, driving the roads and cruising waterways. It is time to leverage our deep history for both innovation and environmental stewardship, harness the abundant clean energy Aotearoa is gifted with, and lead the transformation of the global energy system. Let’s make it so!
Featured image The West Wind wind farm, New Zealand. Photo by Siemens.
Additional images by Biel Morro, Nasa and Andrew Haimerl at Unsplash.
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