State of Play Hydrogen Energy
31TH May 2021
Given the keen interest lately around Hydrogen as a clean energy source, we gathered expert insights on its application across industries, particularly in the Automotive sector. For our blog readers that stay close to the latest trends in the energy sector, we’ve got some crucial inputs from François Le SCORNET around policy implementation and also the biggest challenges Hydrogen faces as an energy source.
François Le Scornet cumulates 15 years of international experience within the energy sector. He worked respectively for the US Department of Energy (hydrogen – fuel cells), then for AREVA (mainly nuclear, offshore wind farm, storage), and finally for GE Renewable Energy (mainly hydroelectric energy, offshore wind farm, solar and storage). Since 2016, he is President and Senior Consultant supporting sustainable energy technologies at Carbonexit Consulting. He has deep expertise in technologies and policies associated with the energy industry.
Below is our detailed interview with François Le Scornet who is actively involved in this subject as an experienced Advisor –
Public authorities are pushing to use new sources of energy within the automotive industry with electricity and hydrogen. Is it economically sustainable by increasing the adoption rates of relying on these new energies?
François: When it comes to on-the-road mobility, hydrogen actually takes time to take off to say the least. This is particularly true for small individual cars where adoption rates remain very low despite the release of quite few Fuel Cell Electric Vehicles (FCEV) models by companies like Hyundai and Toyota in particular. Recently, many public policies pushing green hydrogen not only to decarbonize the industry but also to fuel a clean mobility sector (trucks, buses, light vehicles, infrastructures etc) are pushed in many countries and will support the development of Hydrogen-based mobility.
What do you consider as the major differentiator(s) between Hydrogen fueled cars and electric vehicles to have a significant impact in the automotive industry? Which energy source do you see winning?
François: FCEV are certainly very quick to reload (5-10 minutes only) and are usually able to achieve longer distance than their battery-based counterpart, the Battery Electric Vehicles (BEV) if you look at it in broad terms. However, these advantages may be challenged over time and the lack of hydrogen infrastructure remains a significant issue for hydrogen fueled vehicles. For these reasons in particular, battery electric vehicles actually outcompete hydrogen-based vehicles for light vehicles and shorter distance and that should remain so. A particularly interesting segment where hydrogen may play a more significant role remains the heavy-duty vehicle segment, where hydrogen-based solutions may be competitive if the appropriate infrastructure is in place. This is also true for specific niche markets like fuel-cell powered forklifts and material-handling equipment (e.g. In ports).
Looking at the benefits and the drawbacks of Hydrogen powered vehicles – what important areas should the automotive industry focus on so as to improve adoption rates?
François: Quick to refuel and with significant autonomy, FCEV can complement BEV to achieve broad decarbonization of transport segments. In order to develop and increase FCEV customer acceptance, the automotive industry need to leverage supporting policies and invest to propose (1) a robust green hydrogen dispensing infrastructure (2) costs reductions linked to scaling up of FCEV production (3) a broader range of model choices. But again, without significant breakthrough in electrolyzer technologies and energy storage, the most interesting segment remains the heavy-duty vehicle. Even if the adoption of green hydrogen for light vehicles may increase, the alternative BEVs remain very competitive.
According to the International Energy Agency (IEA), hydrogen is already used in several sectors like in the oil & gas sector (oil refining), chemicals industry (ammonia production, methanol production), mining & metals (steel), etc. It could also be used in other industries like power generation. Do you think other sectors could use this energy source or are the practical applications still limited for now? What sectors do you see potential in, i.e. for further investments into Hydrogen as an energy source?
François: Green hydrogen should be directed towards sectors where no alternatives to decarbonize are available like industrial uses and energy storage. Hydrogen is widely used in the industry today but this hydrogen is quasi exclusively produced from fossil fuel, in particular through steam methane reforming. This is the so-called grey hydrogen. The main challenges for these sectors, In order to fight climate change, is to replace this grey hydrogen by hydrogen produced from alternative low-carbon processes, in particular from water electrolysis using low-carbon electricity from renewable energy. This way, it can decarbonize the sectors traditionally using grey hydrogen from fossil origin: oil refining, ammonia production, steel-making in particular. In addition, Green hydrogen may be more broadly adopted in specific markets to decarbonize residential and commercial heating systems relying on expensive natural gas. However, technical challenges associated with the capacity of the network to handle significant percentage of hydrogen remain unsolved today.
For a clean and widespread use of Hydrogen in global energy transitions – what do you consider the most important and immediate challenges to tackle?
François: The bigger challenge around adoption of green hydrogen, either to replace grey hydrogen or to be used in new applications, is clearly its high cost. Even if electrolyzer costs and renewable energy costs will most probably continue to decline. The expected increase in CO2 costs will also favor its competitiveness comparatively to grey hydrogen and blue hydrogen (grey hydrogen + carbon capture).
From a regulatory and policy perspective, what are the governments and authorities doing to simplify the adoption of Hydrogen as a reliable sustainable energy source? Could you please share your inputs regarding European countries/governments?
François: Incentive schemes can be used to kick-off the installation, drive demand and allow for scaling-up plants, ultimately leading to cost decrease and first successful use cases for green hydrogen. Many countries have been releasing their hydrogen strategy over the last few years, e.g. in Japan, Australian. At the EU level, many countries have adopted explicit hydrogen-related objectives.
At EU level, In 2020, the EU hydrogen strategy was adopted in order to accelerate the development of clean hydrogen, which will play an important part in the European Green Deal for instance, and specific objectives and timelines have been released. Specific forum like the European Clean Hydrogen Alliance, which brings together public authorities, industry, and civil society aims to coordinate investments.
Reports from last year state that China, Morocco and Chile seem well placed as the leading countries for Hydrogen-Production. Could you further elaborate on why this is the case? What type of industry sectors are adopting this energy source and why?
François: The cost of producing low-carbon “Green” hydrogen through electrolysis is linked mainly to the price of the electrolyzer (CAPEX) and the price of low-carbon electricity (for OPEX). Countries with high solar and wind potential typically are therefore well positioned to produce green hydrogen at a lower cost comparatively with other countries for a given electrolyzer investment. This is the case for Morocco or Chile. In other cases, the main driver is a supporting policy to both renewable energy development and local hydrogen demand at the same time. This is the case in China for instance which support strongly the production of FCEVs.
Which other countries / regions do you see having major potential in Hydrogen production? Can you give examples from both developed as well as emerging economies?
François: EU, Australia, Japan and Saudi Arabia
We would like to sincerely thank François for his valuable time to speak with us about this subject. Should there be an interest in leveraging expert insights on any of your studies pertaining to Hydrogen energy or clean energy transitions, please get in touch with us at Xperts Council.