Hydrogen the Saviour

[airiefairie.livejournal.com]

Last year the world consumed an unprecedented 88.9 million b/d of petroleum products, over 3500 bcm of natural gas and 3.7 billion tons of coal (oil equivalent). It is true that fossil fuels have made modern civilisation possible, and the global economy continues to be heavily dependent on this energy source. But the constant climb of the prices is posing an increasing threat of causing lasting recession. In addition, carbon emissions have disturbed the complex climate balance of the planet to an extent that may be close to becoming irreversible. Apart from the economic and environmental effects, the dependency on fossil fuels also brings political problems: plenty of oil-rich countries are now ruled by authoritarian regimes, which are playing a retrograde rather than positive role in international politics.

There has been a lot of talking about a fundamental shift being long overdue, a major shift of the energy paradigm with global consequences that few have had the chance to witness in their lifetime. There is a new technology, or rather, a wide spectrum of technologies, based on hydrogen, which are showing a promising potential to solve the big energy issues of our time. Being by far the most commonplace chemical element in the universe, hydrogen is not just a cleaner and more energetic fuel, it could steer the future of the world into directions we haven't even dreamt about.

Of course this new paradigm is being embraced to a varying extent in the various corners of the world. The EU for example has recognised the necessity to support the new industry which is still in its baby stages. The FCH JU program (Fuel Cells and Hydrogen - Joint Undertaking) has received 450 billion euros until 2020 from the European budget, which will be used to help the wider spreading of technologies using hydrogen as fuel. The private sector will have to add at least 50% to the public funds, in other words a near 1 billion euro stimulus fund is expected to be in place very soon. Some member states are also developing their own separate mechanisms for aiding the sector. Germany is the most ambitious in this respect, the federal government assigning 1.4 billion euros for developing its hydrogen industry until 2016. Belgium is also investing at large scales.

Various projects are being introduced in the European cities, including the overhaul of their public transport, and involving programs that are aiming to fully substitute the diesel buses with new ones using hydrogen. London already deployed 30 hydrogen taxis in addition to these buses during the 2012 Olympics; and in Copenhagen, hydrogen cars are being given to top officials, to serve as promotion prototypes for the new technology. German and Italian companies are developing house gadgets producing heat and electricity and using hydrogen cells. And a 53 million euro project involves the installation of such devices in 1000 households and monitoring their performance in real-life conditions. In Hungary, a large chemical plant has installed a 1 MW energy station that produces electricity using the hydrogen that used to be released as a side product from its work, and now this system is meeting the energy needs of the facility. And Finland is developing various prototypes of hydrogen-based charging devices for PCs, mobiles, etc. The list could go on.

You could ask, why is such heavy subsidising necessary, provided that hydrogen energy appears to have some obvious advantages to carbon? The answer is not just in the ecological threat and the need of a fast shift of the energy paradigm. There are plenty of examples of technologies that have been much better than the mainstream ones, but never got their chance anyway. And the hydrogen industry itself experienced a slowdown, once the initial enthusiasm of the 90s had evaporated in the 2000s. The principle that the best and most effective option should win thanks to the principle of free competition on the market, has proved time and time again to be just a nice slogan. In reality, the established industries are jealously guarding their interests, and whenever they get challenged, they are prepared to respond instantly and fiercely.

Throughout history, the global economy has experienced a few major energy shifts. First there was the shift from wood to coal, then from coal to oil, and then to electricity. And each time the transition has taken a lot of time. In the case of coal it took about two centuries. Oil and electricity needed 50-70 years to take over. If history is to be repeated, hydrogen should fully substitute the "dirty and expensive" carbon as late as the end of the century.

But this time things could be different. Some mathematical models (like those of the Bruegel think-tank) are forecasting that by 2050 the hydrogen cars could be occupying a 25% market share, a similar segment belonging to hybrid cars. In fact hydrogen will gain a more wide-spread application if the oil prices remain relatively high. The other important factor are the international climate agreements: today the market price of a ton of CO2 emissions in Europe is below 5 euros. The situation could change if the price reaches 20 euros, as the pre-crisis forecasts used to indicate. Universal carbon tax could be a great stimulus for hydrogen fuel, especially given the fact that the latter is not being taxed at the moment.

The long-term dependency of the societal institutions on the previously chosen direction, the so called "path dependency", is a scientifically confirmed fact. Big oil is investing enormous sums in oil and gas deposits, in infrastructure and in developing the markets. The automobile lobby is also one of the most powerful. Various shareholders at the multinational oil and gas corporations and the related industries are some of the most influential billionaires, the most aggressive investment funds, the most powerful governments. But this is just one side of the problem. Most people and enterprises are not prone to adopting innovative concepts just like that, without externalising the risks. It would be too costly. So the world has grown accustomed to taking the internal combustion engine for granted, as well as the centralised energy grids (including electricity, gas and heat). The gas stations, despite the high oil-based fuel prices, are a major landmark in every neighbourhood. In this sense, shifting from carbon to hydrogen is widely considered a leap into the unknown - which is why it is causing so much resistance.

What's more, it is not certain if the investments that are needed for such a drastic energy shift, would be returned at all eventually. They would be so huge that they would be hardly possible for any company trying to enter the market on its own. Abandoning one type of fuel means abandoning entire institutions: the introduction of hydrogen technology would disturb the comfortable serenity of the technical schools, unions, media, employers, etc. Even if the new industry could have the advantage of learning from the mistakes of its predecessor, and save a lot of trouble and money in the process by avoiding them. Besides, chances are that cutting-edge innovators would enjoy less returns than the companies which have entered the business later, using the beaten track. And that is a deterrent, too.

On the other hand, there is practically no major automobile company which hasn't already done some research and developed a technology that is only waiting for the hydrogen-fueling infrastructure to be in place, to be launched on the market. The introduction of this type of engine and the start of its open competition with the internal combustion engine is just a matter of time. It is more likely that the hydrogen energy systems supplying homes with hot water, heat and electricity, would actually come sooner than hydrogen cars, because those require less power than automobiles, and the price will be lower, respectively.

Still, what countries like Germany, Belgium and UK are doing, still looks like baby steps. Most of the world is still a blank map in regards to hydrogen technologies. It is just that installing hydrogen fueling stations is still a very expensive affair, which is a hindrance to developing this type of transportation at a larger scale.

On the other hand, countries where investment in the development of hydrogen technology is still in its embryonic stage (or is non-existent), tend to lack the powerful lobbies and special interests that would potentially put obstacles to that new industry. And this gives them a chance to become leading factors in this respect in the future. This could become a leading branch in the industry of countries that are currently nowhere on the map of modern energy technologies. And this presents them with an opportunity to occupy a niche which they could then develop and exploit to their benefit, turning them into hydrogen hubs of regional significance.

Granted, always being at the cutting edge of the technological tsunami is not always the most beneficial decision from a purely economic standpoint. For example China saved a lot of funds by practically skipping an entire technological phase. The Chinese population embraced mobile phones without first having had landline ones, and the need to spread all those cables around the enormous country was skipped, respectively. This example could be extended to such technologies like garbage incinerators, which have been widespread in the West ever since the 60s, but have remained largely unknown in Central and Eastern Europe - and now that modern garbage-processing plants (using plasma) are being introduced everywhere, the latter could skip right to that stage. And these plants are promising to be among the main sources of the new hydrogen fuel. Such a complex solution would simultaneously address several problems (the need of garbage dispensing plus energy source), and it would bring down the price of the latter. And this, in turn, would lift the relevant hydrogen transport along with it. The process is known as a "virtuous cycle".

General estimates indicate that the minimum density of the fueling stations that would allow hydrogen automobiles to be widely introduced, is one per 300 km. There are already 80 such fueling stations operating around Europe, and another 50 are under construction. And the Old Continent is approaching the critical point beyond which it would become a matter of economic and practical necessity for each country to opt for joining the grid, rather than remaining off the hydrogen map, and being bypassed by this emerging industry.

The good news is, the future might be arriving much faster than initially thought. A 2010 McKinsey analysis concluded that the production cost of hydrogen in 2030 would be 3.6 euros - and today it is possible to produce hydrogen under 3 euros. In 2012 Bruegel was claiming that the realistic horizon for overcoming the technological barriers to mass hydrogen transportation would be 2015 - but earlier this year, Hyundai launched a hydrogen car with excellent technical parameters, which could travel for almost 600 km with one fueling. In the beginning of next year the Koreans will try to make a breakthrough with the new Tucson Fuel Cell at the markets of South California, where the hydrogen station grid is about to get expanded. 1000 such cars will be produced for next year, which will then be followed by a 10,000 series. The response from the competition is expected to follow promptly. And thus, the snowball effect would kick in.

Japan is planning to have about a hundred hydrogen stations by 2015. 40 will be around Tokyo, where a so called "hydrogen highway" is now being formed (similarly to other countries like Sweden, Norway, Denmark, and Canada). The first mega-plant in the world, worth 300 million dollars, will be supplying the fuel, also expected to be completed in 2015. An industrial consortium called HySUT is in charge of these projects, among its members are Honda, Nissan and Toyota.

While we are about Japan, Toyota is planning to start serial production of hydrogen cars in 2015. Presently, the production cost of a single car has dropped to 100,000 dollars. Of course, even if that cost is halved in a couple of years, the market will still initially be relatively small, and will probably need some financial support in its starting stages. Meanwhile, Honda is now working in collaboration with GM, aiming to develop more advanced hydrogen engines by 2020. And in 2015, Honda will launch its own mid-size hydrogen automobile. In turn, Nissan is planning to enter the mass market by 2017.

Even though it is a South Korean company that is leading the way in this industry, the Ministry of Knowledge Economy (note the name!) believes that other countries are already one step ahead in this race. So they have recently initiated a 100 million dollar fund that will encourage mixed public-private partnerships on various hydrogen projects. The South Korean government is subsidising hydrogen energy systems for homes: currently the price of such an installation is 40,000 dollars, 50% of that being subsidised by the national budget.

Japan is expecting to have 2 million hydrogen cars by 2025. By 2030, the city of Seoul will be meeting 10% of its energy needs from hydrogen. There is already a 2.4 MW hydrogen energy plant operating there. By the end of next year, the capacity of the hydrogen energy cells in South Korea will be multiplied 100 times. Besides, right now they are building the first "hydrogen town" in the world. Meanwhile, at the opposite side of the Pacific, California is planning to complete 70 hydrogen stations by the end of 2016.

So far the main objection to hydrogen technology was that it is too expensive. But today, a more thorough analysis suggests that it would be even more expensive if the ascent of the era of hydrogen is artificially postponed any further. Every day the EU imports carbon fuels worth 1 billion euros - and that is roughly the amount it will have invested in its hydrogen strategy by 2020 (with the help of business). According to the notable Stern Review, the price of inaction regarding carbon emissions constitutes a permanent loss of 5% of the global GDP; upon further review, posibly more. Granted, in several industries where status-quo special interests are deeply rooted, those companies which are delaying innovation will inevitably become defunct and disappear, as soon as hydrogen is introduced at a mass scale. The countries which fail to recognise the prospects of the new fuel will remain off the grid, and will have to make enormous expenses for imported hydrogen technologies, instead of investing in research now, developing them themselves, and trading them.

Because the so called "free" market is actually woven out of "market failures" and deffects, hydrogen would reveal its advantages as an energy source of the future only in case of a serious public support. Today the hydrogen economy enjoys a 10% annual growth, but that is extremely insufficient, given the scales of the carbon fuels. Still, there already are hydrogen-fueled yachts, motorbikes, even tractors. In Germany and South Korea, domestic appliances converting natural gas into hydrogen are being sold on the market. And some among the more industrious drivers are using the so called "Brown gas generators", in essence hydrogen cells providing additional power to the car engine and cutting the consumption of conventional fuel by 20-60%.

Despite the enormous resistance from powerful special interests and all the setbacks and delays, we are witnessing the gradual birth of a new industry that will launch modern humanity to the next level up the energy ladder. There is tremendous scientific and technological potential in it. It now looks as if all the prerequisites for success are in place.

But of course there is something more to be desired. An additional pinch of salt to spice up the mix. The politicians and entrepreneurs will have to recognise the dire need of overhauling the energy paradigm as a whole, and creating a more flexible, more effective and cleaner energy system that would integrate the use of fossil fuels with hydrogen-trapping and storing technologies. Each country and each company will have to develop its hydrogen strategy, and support it with sufficient resources - only then will hydrogen rise as a Phoenix from the ashes of the history of science and technology, to save the world - not just from a global energy crisis, but potentially from the moral, social, economic, and intellectual crises that the latter could bring, if things are left as they are for too long.

Comments

[cheezyfish.livejournal.com]

The problem with hydrogen storage, it pretty much already reached its limit with traditional compressed storage. You can either go with very cold temperatures, -400 F, so you can store it as a liquid or make the tank bigger (which would worsen fuel economy). The cryogenics option is really expensive and isn't really commercially available yet. There are other options, but they are a ways off.