DEC’s Deep-Dive into Hydrogen
Rachael Gradeen · Decentralised Energy Canada · | June 3, 2021
Ever heard of the hydrogen economy? Learn more about it in this article, and check out our feature interview with Nu:ionic, a Canadian company at the forefront of hydrogen technology.
Interest and demand in hydrogen is growing exponentially, up 28% over the last decade. The trend is expected to continue, with hydrogen speculated to be valued at over USD $164 billion by 2027.
Where does this growth come from? Hydrogen is thought to help ease the transition to a low-carbon energy future, by decarbonizing high-emissions industries, like transport, the chemical industry, and iron and steel production. In particular, Canada’s Hydrogen Strategy looks to hydrogen as a means to diversify the future energy mix of the country, generate economic benefits, and reach net-zero emissions by 2050.
So, how does it work? Hydrogen is an energy carrier, not an energy source, meaning it does not create energy, and is not a ‘renewable resource.’ As a carrier, however, it is light, energy-dense, and transportable, making it ideal for delivering and storing large amounts of energy. To make use of these features, however, hydrogen must be synthesized from other molecules, as it is not naturally occurring. The hydrogen production methods are classified by colour: green, purple, blue, grey, and black. Generally, they can be broken down as follows:
Hydrogen Production Methods. Source.
While hydrogen may be touted as a ”green” superstar, it is only as green as its production method. In 2020, over 99.6% of hydrogen was produced from hydrocarbons, with green hydrogen only accounting for 0.1% of global production.
There is also lingering concern that the energy input to output ratio to synthesize hydrogen is not optimal; though this hurdle is speculated to be overcome with advances in technology. Nonetheless, there is still a lot of work to be done to ensure that hydrogen follows a low-carbon, sustainable trajectory. Though with net-zero carbon policies and hydrogen roadmaps (as in the figure below) popping up across the globe, the outlook is positive.
Integration of variable renewable energy into end uses by means of hydrogen. Source.
To find out more about the challenges and opportunities for hydrogen in Canada, I spoke with Jan Boshoff, the Co-founder and CEO of Nu:ionic.
What is Nu:ionic? And what do you do?
Nu:ionic offers solutions for decarbonizing the energy economy by converting natural gas into low-carbon, low-cost hydrogen. Our goal is to eliminate 205 million tons per year of CO2 from the North American energy economy, by utilizing electricity to produce low-carbon hydrogen for blending into natural gas used as fuel.
What are some of the challenges that Nu:ionic is trying to tackle?
Hydrogen is a clean fuel that is cheap to produce centrally, but costly to transport. Nu:ionic’s process allows hydrogen to be produced in a distributed manner from our existing low-cost energy sources – natural gas and electricity, with 95% of the CO2 produced as a by-product.
What opportunities exist for hydrogen in Canada?
Hydrogen is a clean energy carrier that can directly replace natural gas as heating fuel, either by blending or, with the right equipment, burning 100% hydrogen. It can be used to drive high-efficiency combined heat and power (CHP) plants, or power fuel cells as power plants in microgrids. Furthermore, hydrogen fuel cell vehicles offer significant advantages as zero-emission vehicles over electric vehicles for high utilization and heavy-duty applications such as in the material handling industries, long-haul trucking, or public transportation.
Is Canada on track to capitalize on these opportunities?
No, not yet. We need to develop a national hydrogen pipeline grid; we need to develop the regulatory framework that enables a blending mandate for low-carbon hydrogen into natural gas grids; we need to support the adoption of hydrogen in transportation by mandating zero-emission transportation solutions. Fortunately, Canada recognizes its tremendous natural resources, both renewable and fossil-based. The pragmatic approach of focusing on the carbon intensity of hydrogen (as opposed to the production methodology) is highly encouraging.
How does hydrogen as an energy storage solution support emissions reduction goals?
Hydrogen is one of the few viable utility-scale, seasonal energy storage solutions. Canada is uniquely positioned to capitalize on this, with vast salt formations in Alberta that can store energy at terawatt-hour (TWh) scale for less than $5 per kilowatt-hour (kWh) - a factor of 25 times lower than the cost of Lithium-ion batteries. This means that rather than curtailing excess renewable electricity in peak production months, we can store that energy to displace polluting carbon-based fuels in peak demand months. Even at the microgrid scale, hydrogen storage cost is $30 per kWh - well below that of the cost of batteries.
How is hydrogen supporting the world's current electrification trend?
It is about 10 times cheaper to transport hydrogen via gas pipeline than transporting the same amount of energy in undersea transmission lines. Hydrogen could allow us to bring the renewable energy generated in remote or offshore green electricity plants to market. Furthermore, given the relatively low cost of storage, hydrogen allows us to utilize low-cost, excess renewable electricity for providing process heat or fuel, in a seasonally shifted manner.
How can the hydrogen and decentralised energy industries support one another going forward?
I believe that hydrogen-powered CHP is a significant opportunity for decarbonising decentralised energy, providing highly efficient and low-cost energy with a minimal footprint. Also, the low cost of hydrogen storage opens up new business opportunities for providing decentralised ancillary business models for grid-connected, decentralised power plants, greatly improving grid resiliency. To illustrate this, batteries are typically 4:1 systems – storing about 4 kWh of electricity per kWh of power that it can provide. Hydrogen-based power systems of similar cost to batteries are 100 – 1,000:1 systems.
In effect, the outlook for hydrogen development in Canada is favourable. And promising partnerships are being developed to further the process; for example that between Suncor and ATCO to produce over 300,000 tonnes of clean hydrogen per year at the Suncor Edmonton Refinery. On the international stage, Canada and Germany are exploring the possibility of Canadian-made green hydrogen becoming an export product to the German market.
Currently, Canada is among the top 10 hydrogen producers worldwide, and it aims to be one of the top three biggest producers of hydrogen worldwide, with significant amounts earmarked for export. With these aspirations, all signs are pointing toward big opportunities for hydrogen in Canada.
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