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Blue Vs. Green Hydrogen: Which Will
The Market Choose?
Jim Magill - Contributor
Sustainability
" write about energy and
emerging technologies in the energy sector"
Follow me on Twitter.
I’m a Houston-based freelance writer with almost a
quarter-century of experience covering the oil and gas industry. I
retired in December
As U.S regulators and industry leaders
mull how to consider introducing hydrogen into the nation’s energy
supply mix, they’re faced with a choice that sounds more like a
decision pondered by the hosts of one of TV’s many home fixer-upper
shows – should they go with blue hydrogen or green hydrogen, and what
combination of the two will create the right mix?
The answers to those questions will
likely have a great impact on the speed with which the U.S. economy
makes the transition to a zero-carbon future and the cost of getting
there.
Today about 99% of the hydrogen produced
for industrial use – in refineries and manufacturing plants – is
so-called “gray” hydrogen. Gray hydrogen principally is derived from
natural gas, and its production results in the production of large
volumes of CO₂, nine parts CO₂ for every one part hydrogen. Creating
more environmentally friendly “blue” hydrogen, requires capturing that
CO₂ and disposing of it in some manner, such as deep underground, or
using it in some beneficial manner, such as in advanced oil recovery.
Green hydrogen on the other hand is
produced via electrolysis, the process of separating water into
hydrogen and oxygen. When the electricity used in the process comes
from renewable sources, such as wind or solar, the result is a
zero-carbon hydrogen. At a cost of about $6/kilogram, green hydrogen
is the most expensive form of hydrogen to produce.
Today, green hydrogen is two to three
times more expensive than blue hydrogen, according to a December 2020
report by the International Renewable Energy Agency. However green
hydrogen costs are expected to decrease in the next several years,
with improved electrolysis technology and the scaling up of that
technology to industrial levels of production.
“The cost of alkaline electrolyzers made
in North America and Europe fell 40% between 2014 and 2019, and
Chinese-made systems are already up to 80% cheaper than those made in
the West,” the report states. The IREA predicts that green hydrogen
could be produced for between 8 cents/kg and $1.6/kg in most parts of
the world before 2050.
“This is equivalent to gas priced at $6/MMBtu
to $12/MMBtu, making it competitive with current natural gas prices in
Brazil, China, India, Germany and Scandinavia on an energy-equivalent
basis, and cheaper than producing hydrogen from natural gas or coal
with carbon capture and storage.”
Pros and cons of green and blue
Hydrogen experts differ on the rate at
which blue and green hydrogen should be introduced into the U.S.
energy mix, although most agree that there needs to be a transition
period in which blue hydrogen, which is cheaper and whose production
is more easily ramped up to a commercial scale, should be relied on to
provide a bridge to an economy in which the zero-carbon green hydrogen
is predominant.
“There are challenges to producing green
hydrogen at large scale today,” Andy Sarantapoulas, a vice president
of the international industrial gas and engineering company Linde
LIN
-1.9%, said in an
email statement. In addition to gas produced through electrolysis,
Linde also characterized gas produced from a renewable feedstock, such
as landfill gas, as green.
“Renewable electricity is still often
subsidized by local or state governments and is not always available
as baseload operations,” he said.
Sarantapoulas said gray, green and blue
hydrogen would all be part of the hydrogen energy mix in the future.
“The rate of growth of the blue and green hydrogen will solely depend
on the demand for those products, driven by the market demand,
production costs, and government regulations,” he said.
“In the end it all comes down to who’s
paying for it,” Nico Bouwkamp, technical program manager at energy
consulting firm Frontier Energy, said in an interview. “Green hydrogen
is a great opportunity but it will take some time to develop.”
Bouwkamp represents Frontier on the
California Fuel Cell Partnership industry/government collaboration
aimed at expanding the market for hydrogen fuel-cell powered vehicles.
California has led the nation in its embrace of the use of hydrogen as
a vehicle fuel. The state has mandated that 100% of new passenger cars
and trucks sold in-state be zero-emission vehicles by 2035.
California’s aggressive climate targets
present an opportunity for other states such as Texas, which also have
the potential to become big hydrogen consumers, to experiment with
their mix of the various colors of hydrogen, before becoming locked in
to single technology because of government mandates, he said.
“You have more flexibility in figuring
out how to make it work financially and making the business case for
it to be sustainable. You may start out with 20% renewable or
low-carbon hydrogen, versus going to 100%, which is a costly
proposition,” he said. “It’s a financial benefit as well as an
engineering benefit.”
Raghu Kilambi, CEO Powertap Hydrogen
Fueling Corp., said blue hydrogen “is the way to go in the next five
to 10 years,” especially in California, where the company, which
builds vehicle fueling stations, is based.
“Electricity is so expensive In the
United States and it’s not very green,” he said. In California
especially, the high cost of electric power makes green hydrogen less
cost-effective than the blue variety. “Green hydrogen may have some
applications internationally but not in the United States.”
Europe, Asia go for the green
Indeed, other parts of the world, notably
Europe and Asia, have gone all-in on their endorsement of green
hydrogen. Last July, the European Union unveiled its new
Hydrogen Strategy, which calls for the accelerated adoption of
green hydrogen to meet the EU’s net-zero emissions goal by 2050. The
strategy calls for the installation of 6 gigawatts of renewable
hydrogen electrolyzers on the Continent by 2024.
“In Europe there was absolutely no doubt
that it would have to be green hydrogen. Blue hydrogen would never
do,” said Robert Hebner, director of the Center for Electromechanics
at the University of Texas at Austin.
Hebner, who is taking part in
DOE-funded research into the development of new hydrogen production
technologies, said the market ultimately would decide what colors of
hydrogen are developed and when.
“Green hydrogen is what Europe
absolutely wants. But blue hydrogen is what a lot of the world
thinks we can afford sooner and it’s probably going to be good
enough,” he said. “It’s really more of a market-driven thing than a
technology thing.”
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