Hindenburg II

Shot: Jonathan Lesser, Manhattan Institute

Why Green Hydrogen is all hot air

One of the central tenets of the Biden administration’s energy policy is the pursuit of “green” hydrogen, defined as hydrogen manufactured with zero carbon emissions.

This push has involved $7 billion dollars in subsidies for the creation of Regional Clean Hydrogen Hubs as well as significant tax breaks for hydrogen production through the Inflation Reduction Act.

While the administration touts this as beneficial, the reality is that using hydrogen as an energy source makes no economic sense.

There are two reasons this scheme won’t work. 

First, we cannot create usable energy out of thin air. Instead, we expend energy to obtain energy resources — drilling for oil and gas, mining coal — to convert it to forms we can use for things like generating electricity or powering your car. 

… In fact, manufacturing hydrogen requires at least twice as much energy as the hydrogen itself can provide, even before accounting for the energy lost when that hydrogen is subsequently used, such as in a fuel cell or burned in an industrial furnace. 

That’s a thermodynamic fact, which no subsidy can change.  

The Biden administration has chosen to invest billions of taxpayer dollars into manufacturing hydrogen via electrolysis.

Why?

Because electrolysis, which involves running an electric current through water to break apart hydrogen and oxygen molecules, yields zero carbon emissions.

This “green” end, it seems, justifies even economically absurd means. 

As part of its green hydrogen efforts the administration launched an “Earthshot” program, which aims to reduce the cost of manufacturing green hydrogen through electrolysis by 80% by 2030 to just $1/kg.

The administration envisions using “surplus” wind and solar electricity – never defining what that means – in manufacturing plants that will produce millions of tons of zero-carbon hydrogen, which can then be used in industrial processes like steel and cement manufacturing, and thus move the country toward its net zero goal by 2050.  

The problem here is that wind and solar power are inherently intermittent – the wind doesn’t always blow, and the sun doesn’t always shine.

Hence, operating a manufacturing plant only when there happens to be excess wind and solar generation would be neither practical nor cost-effective. 

As for storing surplus wind and solar electricity in batteries and enabling plants to operate on a consistent schedule, my report shows the costs of the necessary storage alone could be as large as the cost of the manufacturing plants themselves, even if battery costs were cut in half.

No matter what process is used, Earthshot’s goal of manufacturing green hydrogen at a cost of no more than $1/kg is unrealistic. 

The costs to build and maintain electrolysis plants, generate and transmit the electricity those plants require, and compress and store the hydrogen so it could be transported will far exceed $1/kg, even if electrolysis plant costs fall by 80%.  

The tragedy in all of this is that the administration’s green hydrogen production goal — 10 million metric tons annually by 2030—would have no measurable impact on climate, even if it were achievable. 

The resulting carbon reductions would be equivalent to two days of U.S. emissions in 2022 and less than six hours of world emissions.  

Chaser:

Shell closes its light-duty hydrogen refilling stations in California

Life's always been tough on hydrogen fuel-cell electric vehicles (FCEV), and it's only getting tougher thanks to Shell announcing the closure of its retail refilling stations in California. Hydrogen Insight reported that the energy company ran seven stations for consumer FCEV owners, six of them shut down immediately because of "supply complications and other external market factors." One light-duty retail station in Torrance remains open at the time of writing while Shell tries to find a buyer (that would be the same one that Autoblog editor James Riswick found to be closed due to maintenance and ongoing parts shortages).

The moves leave Shell with three hydrogen stations in operation in California, exclusively for industry and heavy-duty vehicles. Shell will continue investing in that outlet for hydrogen, allotting $1 billion per year toward heavy duty H2 as well as atmospheric carbon capture and storage. On the consumer side, the focus will be on EV charging infrastructure.

The shutdown here comes two years after Shell did the same in the UK, and follows about six months of winding things down in California. In 2020, when a kilogram of H2 cost about $13, Shell proposed building 48 new stations in the state. California offered a grant of $40.6 million as incentive. Last September, Shell killed the plan and refused the grant money. Those funds, and $8 billion to be disbursed by the U.S. Energy Department in the Hydrogen Hub plan, couldn't overcome the difficulties in permitting for stations, high build costs, fickle machinery, and ensuring consistent supply. 

There are around 54 retail stations remaining in the state after Shell's departure. However, the partnership's list of open stations shows just 33 actually dispensing high-pressure H70 at the time of writing.