The hydrogen economy faces major challenges

The hydrogen economy faces major challenges

Ah, the hydrogen economy. This is the name given to a future where hydrogen made from zero-carbon sources is used in a myriad of applications to reduce the carbon footprint of the global economy.

Wonder fuels could theoretically be used to store energy from wind and solar farms, generate power in industrial processes, and perhaps even be used in certain transportation applications.

Everything looks very promising on paper. Indeed, green hydrogen – and the hydrogen economy in general – faces a number of economic, technical and business challenges. It has one of the lowest energy density of any available fuel, presents unique safety risks, and faces logistical hurdles for storage and distribution.

These obstacles have not stopped governments and companies around the world from investing billions of dollars in hydrogen manufacturing technologies and projects. And again, the same could be said of biofuels during the mid-2000s — and we have relatively little to show after nearly two decades. Therefore, investors should not overlook these challenges to the hydrogen economy.

Hydrogen has a low energy density

It is common to read that hydrogen has an unparalleled energy density, but it would be difficult to find a worse fuel than hydrogen. The confusion stems from the fact that there are multiple ways to determine energy density.

The two most important metrics determine the amount of energy contained in a given mass or volume.

  • On the basis of mass, hydrogen is one of the most energy-dense fuels. One kilogram of hydrogen contains three times more energy than one kilogram of gasoline.
  • On a volume basis, hydrogen is one of the least energy-intensive fuels. One liter of hydrogen contains only 25% of the energy of one liter of gasoline and only 20% of the energy of one liter of diesel fuel.

What scale has precedent? Well, hydrogen exists as a gas at atmospheric pressure and temperature. This means that one kilogram of hydrogen occupies a very A large area. A 3,221-gallon tank would be needed to hold just one kilogram of hydrogen gas.

For hydrogen to be useful as a fuel, it must be stored, transported, or condensed and compressed into a liquid. This requires large amounts of energy, which represent additional costs to the hydrogen economy other than hydrogen manufacturing.

For example, gasoline or diesel fuel can be stored in tanks without much maintenance. Hydrogen fuels require constant energy input and/or new materials to be cooled or compressed during storage.

Hydrogen has unique safety risks

All fuels have safety risks. Wonder fuel contains so little that it can be costly to dilute.

First, hydrogen flames do not burn in the visible spectrum. In other words, hydrogen flame is invisible to the human eye. Special flame detectors are required.

This poses a unique safety risk to emergency response teams, especially if the hydrogen economy spreads beyond industrial applications. Does your local fire department have the tools to see hydrogen flames? How much will it cost to equip emergency responders across the country?

Second, hydrogen is flammable at lower concentrations and lower temperatures than commonly used fuels. Even a relatively small leak can become dangerous. This risk is high because hydrogen molecules are very small, which means leaks will be very common. The low hydrogen density will actually help here, as the hydrogen leak will quickly spread into the air. However, mitigation will require special sensors to detect leaks, and possibly more stringent ventilation requirements for distribution and storage infrastructure.

Third, hydrogen can make some materials more brittle. It is so common and alarming that it has its own engineering term called “hydrogen embrittlement”. The problem for decades has forced engineers to design steels and materials that resist weakening, particularly for pipelines and aircraft engines. Otherwise, pipelines will be dumped in the sky and planes will fall from them.

Although advances in materials science have mitigated these risks, they have been aimed at relatively low concentrations of hydrogen. Items intended for storing or transporting hydrogen — such as a kitchen stove or pipes that carry natural gas into your home — will need to address this issue again.

Hydrogen Distribution Challenge

Perhaps the biggest obstacle to the hydrogen economy is the transportation and distribution of hydrogen. It is the result of a combination of the challenges mentioned above.

Large quantities of hydrogen cannot be transported in existing steel pipelines. This is because hydrogen is not very dense (which leads to pressure challenges) and steel pipelines will deteriorate over time.

This problem is acute for green hydrogen projects. Building an onshore wind farm or utility-scale solar farm is one thing to generate commercial quantities of hydrogen. It’s another thing to get the hydrogen to where it needs to be consumed. Many renewable energy projects are being built in areas without infrastructure, which means entirely new (and expensive) non-steel pipelines will have to be built.

The same obstacle is limiting the widespread use of hydrogen by homes and businesses. Existing natural gas distribution infrastructure cannot be used reliably or safely to transport hydrogen. Even if great fuels could be manufactured at an attractive cost, would cities, states, and nations hold back from the enormous cost of repairing millions of miles of steel pipelines and distribution networks?

Challenges create opportunities

Investors should always remember that they are investing in business, not technology. The hydrogen economy may receive a lot of investment and attention, but it faces significant hurdles to becoming a reality.

The challenges discussed above can be used to properly assess risks for hydrogen stocks, or to look for emerging opportunities before they catch the rest of the market. For example, a company that manufactures hydrogen flames or hydrogen leak detectors can see a boon in business.

Likewise, pink hydrogen (made from nuclear reactors) can boast significant advantages over green hydrogen, namely in existing infrastructure and being near industrial customers.

It should also be noted that many current technologies, from electricity to telephone lines, require huge investments in infrastructure. Society still decides it is worth the cost. Do we reach the same conclusion for hydrogen?


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