The hydrogen revolution is real and it will change the world

Saudi Arabia and the Gulf states are also reinventing themselves, aiming to become mass global exporters of zero-carbon fuels for ships, aircraft, or Asian power plants. Abu Dhabi is already developing desert solar power for $1.35 per megawatt hour, tantamount to free energy. This will be converted into hydrogen by Siemens through electrolysis to make clean synthetic jet fuel. Carbon-free air travel is in sight.

Seifi Ghasemi heads the US conglomerate Air Products, the world’s biggest commercial producer of hydrogen. He manufactures mostly dirty “grey hydrogen” from fossils for refineries, industrial uses, or to make ammonia for fertilizers.

Ghasemi is hardly a green romantic. Aged 76, he knows his hydrogen and has seen it all. His conclusion is that this cycle is different from past episodes. Net-zero targets and the Sino-Western hydrogen race have changed the political landscape, and with it the cost calculus. So have rising carbon prices. EU emissions contracts have doubled since October to nearly €42 a tonne. This really bites.

Air Products is going for broke on clean hydrogen, not just the “blue” variant made from natural gas with carbon capture, but also pure “green” hydrogen from renewables. “We are putting in $10bn of our own money,” he told the IHS CeraWeek forum.

First in line is a colossal venture at Saudi Arabia’s NEOM project harnessing wind and solar from the Gulf of Aqaba to generate four gigawatts of power. This will be turned into green ammonia, a form of liquid hydrogen that can be shipped in tankers. Saudi Arabia has already dispatched its first trial load of ammonia to Japan for use in a power plant.

“The way we see the future, in 20 to 40 years from now, all the energy that mankind uses will come from wind, solar, and hydro. Forty per cent of this will be used directly to power electric vehicles, heating, light, air conditioning, and cooking. The rest will be used to break down water and produce hydrogen. That will be the source of energy to drive trucks, ships, trains, and industries like steel,” he said.

That sums it up in a nutshell. You move through the gears, first displacing natural gas as a dispatchable back-up for renewables, then reaching cement, fertilizers, chemicals, or heating for buildings. The scissor-action of falling hydrogen prices and rising carbon prices brings one sector after another into range.

Bingo, you have decarbonized most of the global economy. Agriculture is harder to crack but that can be offset in other ways. Drax’s biomass project in Yorkshire will achieve net negative emissions with carbon capture.

Goldman Sachs argues that blue and green variants will rapidly achieve cost parity, or better, and become the global energy workhorse, potentially abating 45pc of greenhouse emissions.

Philanthropist Bill Gates doubts that we can pull it off without nuclear power, though it will have to be cheaper than today’s complex reactors. He has bet on Terrapower’s travelling wave and molten salt reactors, hoping to produce competitive baseload electricity at times of high demand but switching to “yellow” hydrogen production off peak.

In America, Mitsubishi is turning a Utah coal dinosaur into a green hydrogen plant that will cover the entire peak electricity demand of Greater Los Angeles. It will use excess seasonal solar and wind power for electrolysis, storing up to 150,000 MW hours of hydrogen in a giant salt dome. This will cover the demand surge for air conditioners in summer and make up for lost solar power in peak winter.

Siemens Energy is building a plant to make hydrogen in southern Chile from wind, turning it into methanol, mixed with CO2 captured from the air. This can then be sold in petrol stations as e-methanol and e-gasoline. It will produce enough methanol to run a million cars a year by the md-2020s, and from there it is off to the races. The moral of the tale is that you make clean fuel wherever it is cheap and ship it to wherever there is a market.

This is what is happening today. If you want a futuristic leap, try the new hydrogen paste unveiled by Germany’s Fraunhofer Institute. They have found a way to make the gas safe, portable, and energy-dense. “It stores hydrogen in a chemical form at room temperature and atmospheric pressure,” said project leader Marcus Vogt.

You insert a cartridge of paste into your car. A plunger squirts out a dose and that mixes with water to produce hydrogen for the fuel cell, and runs the vehicle. A single fill potentially has longer mileage than a full tank of petrol.

Production starts this year. If it lives up to promise, Europe, China, and America may start to have second thoughts about their vast bet on electric vehicles, and the Japanese may run away with the hydrogen prize. Volkswagen’s Herbert Diess said this week that hydrogen cars defy physics and can never compete, as well he might after gambling €30bn and his company’s future on the EV duel with Tesla. Doth he protest too much?

Ultimately, everything depends on the cost of green hydrogen. We long assumed that it would take decades to bring the tariff down from $5 or $6 a kilo today to anything close parity with natural gas. But this is not what those working on frontier projects told CeraWeek.

Companies lined up with eye-watering figures. Norway’s NEL expects to reach the Holy Grail of $1.50 by 2025. France’s Engie aims for comparable levels this decade, and so does Malaysia’s Petronas. Heliogen said it has already reached $1.88 from its concentrated solar “sunlight refinery”.

Urgency is the mother of invention. Just as science has conjured vaccines in 10 months to fight Covid, it is finding ways to conjure cheap power out of water, wind, sun. Markets have seen the writing on the wall since the Paris Agreement and have been pulling forward the switch with mounting gusto. Economies of scale are doing the rest. Whatever you think of politicians and enthusiasts, listen to the men and women actually pulling it off.