June 20, 2022 • Paul Rodden • Season: 2022 • Episode: 123
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In episode 123, A blog post released on June 13, in the Manhattan Contrarian is highly critical of hydrogen, but brings up some good points. I'll go over the article and give my feedback on this on today's hydrogen podcast.
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A blog post released on June 13, in the Manhattan Contrarian is highly critical of hydrogen, but brings up some good points. I'll go over the article and give my feedback on this on today's hydrogen podcast. So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where is capital being deployed for hydrogen projects globally? And where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions that will unlock the potential of hydrogen, and this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast.
In an opinion piece from the Manhattan Contrarian, Francis Menton writes, hydrogen is unlikely to ever be a viable solution to the energy storage conundrum. Francis starts off the blog post by saying what he calls the energy storage conundrum is the obvious but largely unrecognized problem that electricity generated by intermittent renewables, like wind and sun can't keep an electrical grid operating without some method of storing energy to meet customer demand. In times of low production. These times a low production from wind and sun occur regularly, for example, calm nights, and can persist for as long as a week or more in the case of heavy, overcast and calm periods in the winter, if the plan is to power the entire United States by wind and solar facilities, and if we assume that wind and solar facilities will be built sufficient to generate energy equal to usage over the course of a year, do we need to do a calculation of how much storage would be required to balance the times of excess production against those of insufficient production in order to get through the year without blackouts. The challenge of getting through an entire year could require for more storage than merely getting through a week long wind, sun drought, because both wind and sun are seasonal, producing much more in some seasons than others. previous posts on this block have cited to several competent calculations of the amount of storage needed for different jurisdictions to get through a full year of only wind and sun to generate the electricity. For the case of the United States, there was a post from January of 2022 that describes the work of Ken Gregory who calculates a storage requirement based on the current level of electricity consumption, and approximately 250,000 gigawatts to get through the year.
If you then assume as part of the decarbonisation project, the electrification of all currently non electrified sectors of the economy, that would be transportation, home heat, industry, agriculture and others, the storage requirement would approximately triple to 750,000 gigawatt hours. If that storage requirement is to be met by batteries, we price the amount of storage needed at the price of the best currently available batteries, which will be Tesla type lithium ion batteries. And by doing so we get an upfront capital cost in the range of hundreds of trillions of dollars. That cost alone would be large multiple of the entire United States GDP and obviously it would render the entire decarbonisation project impossible. In addition, lithium ion batteries and all other currently available batteries do not have the ability to store power for months on end. That's from the summer to the winter without dissipation and then discharge over the course of additional months. In other words, the fantasy of a fully wind solar energy economy, backed up by only batteries is doomed to quickly run an impenetrable wall. He continues. So is there another approach to decarbonisation that could work with nuclear blocked by the same environmentalists who oppose all the use of hydrocarbons, the options are few. But the most plausible would be to use hydrogen as the means of storage to balance the random swings of wind and solar electricity generation. It's not like nobody's thought of this up until now. Indeed, the politicians and activists can freely pontificate about the theoretical solutions without having to worry about practical obstacles or costs. Hydrogen seems like it could be easier. With hydrogen, you can just completely cut out carbon from the energy cycle, making the hydrogen from water stored until you need it. And then when the need arises, burn it to produce energy with only water as the byproduct.
Francis continues by saying the solution seems so terribly obvious, and yet nobody is doing it. What is wrong with everybody? The summary of the answer is that hydrogen in the form of free gas is much more expensive to produce than good old natural gas, which he also equates to methane or ch four. And once you have it, it is inferior in every aspect to natural gas as a fuel for running the energy system, other than the issue of carbon emissions. If you think those are a problem, hydrogen is far more difficult and costly than natural gas to transport to store and to handle. It's much more dangerous and subject to exploding. It's much less dense by volume, which makes it particularly less useful for transportation applications like cars and airplanes. He continues by saying and of course there's no demonstration project at large scale to show how hydrogen based power systems could work or how much it would cost after including all the extras and current unknowns, not just for producing it also, but for transportation and the safely handling of the hydrogen. He said there are also a few other issues that arise in consideration of hydrogen as the way to decarbonize. The first is the quote unquote, cost of green hydrogen versus natural gas.
In recent years prior to the last few months, natural gas prices have ranged between about $2 and $6 per million Btus. In the United States, the price spike in the last few months has taken the price of natural gas to about $9 for MMBtu. Meanwhile, according to this December 2020, peace at Seeking Alpha, the price for green hydrogen produced by electrolysis of water is in the range of four to $6 per kilogram, which translates according to seekingalpha to 32 to $48 per MMBtu. In other words, even with the very dramatic recent rise in the price of natural gas, it's still three to five times cheaper to obtain than green hydrogen. There are some who predict dramatic future price declines for green hydrogen and also continued price increases for natural gas, maybe, but with prices where they are now or anywhere close, nobody is going to make major purchases of green hydrogen as the backup fuel for intermittent renewables. And without buyers, nobody will produce large amounts of this stuff. His next point is how much overbilled of sun and wind generation capacity would be required to produce the green hydrogen. truly breathtaking amounts of incremental solar panels and or wind turbines would be required to make enough green hydrogen to become a meaningful factor in backing up a grid mainly powered by the sun and wind. The seekingalpha piece has calculations of how much nameplate solar panel capacity it would take to generate enough green hydrogen to produce just one small or 288 megawatt GE turbine generator. The answer is the solar nameplate capacity to do the job will be close to 10 times the capacity of the plant that would use the hydrogen.
And so given the tremendous losses in the process of making the hydrogen and then converting it back into electricity, it's almost impossible to conceive that this process would ever be cost competitive with just burning natural gas. His next point is that making enough green hydrogen to power the country means electrolyzing The ocean, the ocean is effectively an infinite source of water, but freshwater supplies are limited. And if you electrolyze saltwater, you get large amounts of highly toxic chlorine gas. There are people working on solutions to this gigantic problem. But as of now, it is all at the laboratory stage. Incremental costs of getting your green hydrogen from the ocean are a complete wildcard. His next point is that hydrogen is much less energy dense than gasoline by volume. For many purposes, and particularly for the purpose of transportation fuel, it is highly relevant that hydrogen is much less dense than gasoline by volume. Even liquid hydrogen has an energy density volume that is only one quarter that of gasoline, eight mega joules per liter versus 32 mega joules per liter, meaning much larger fuel tanks and liquid hydrogen needs to be kept at the ridiculously cold temperature of negative 253 degrees Celsius. Alternatively, you can compress the gas. But when you are talking about more than 10 times energy density disadvantage, either compressing the gas or converting it to liquid or require large amounts of additional energy, which is an additional cost not yet figured into the calculations.
His last point is this hydrogen makes steel pipelines more brittle. Hydrogen is much more difficult than natural gas to transport and handle. Most existing natural gas pipelines are made of steel and hydrogen has an effect on steel known as embrittlement. That makes the pipes develop cracks and leaks over time. cracks and leaks can lead to explosions. Also, because the volumetric energy density issue, existing natural gas pipelines can carry far less energy if used to carry hydrogen. Okay, so some interesting points in this blog article that really I believe need to be addressed. And the first part that I want to talk about actually came before his bullet points. And that was that hydrogen is much more dangerous and subject to exploding. Now I'm assuming he's still comparing hydrogen to natural gas. And the last time I checked, both are extremely flammable gases. But for him to say that hydrogen is subject to exploding, well, that's not really the case. Several tests have been done on compressed hydrogen tanks where they're compressed to the 10,000 psi mentioned later in the article. And when that tank was purposefully ruptured in the middle of a fire, the hydrogen gas just leaked out, because at that 10,000 psi, it was escaping too fast to catch fire. When the same test was done with a traditional gasoline tank, the whole thing caught fire. So let's just put aside the issue of safety and the fact that hydrogen is a flammable gas. And now to dive into his first bullet point, and that's the cost of green Hydrogen versus natural gas.
So the number he's quoting for green hydrogen is four to $6 per kilogram to generate the hydrogen. And while that cost is looking to go down in the next five years, it's still pretty accurate. But that being said, the problem with his bullet point is that it focuses on one specific technology of generating hydrogen. And as we all know, there are multiple ways to generate hydrogen. And to use this as the prime example, just looks at the worst case scenario for hydrogen generation price points. And so if you factor in other technologies, such as in situ combustion, waste to hydrogen and methane pyrolysis, this looks a lot better than simply just focusing in on the quote unquote, green hydrogen. And instead of focusing in on green hydrogen being made from renewables, where we really should think about this as the electrolysis of hydrogen, and then you can start bringing in other types of electricity, including nuclear. But one thing he really does highlight in this point is something that we always really should take into consideration. And that is that the price point of natural gas is extremely volatile.
And because of that price volatility, how much value can we attribute to hydrogen to de risk that volatility. Now his next point of how much overbilled of sun and wind energy generation capacity would be required to produce the green hydrogen. Now, that really does boil back to what I said in the first point of, we don't just need this electrolysis of water with renewables to generate hydrogen, let's start focusing on other technologies to combat the problem. And really, the same thing goes for his third point, which is making enough green hydrogen to power the country means electrolyzing The ocean, if a group is looking to produce hydrogen in an arid environment, please consider something other than water electrolysis to generate the hydrogen. In a lot of these areas, freshwater is the most precious resource available. And as I mentioned, there are so many other great technologies for creating hydrogen. His next point is a very interesting point in that hydrogen is much less energy dense than gasoline by volume. And that's very true. Because at standard temperature and pressure, gasoline is a liquid, and hydrogen is an extremely light gas.
But then to compare the two, even in a liquid state really isn't comparing apples to apples, because comparing the two in this sense means looking at both in, say, a combustion engine. And that really wouldn't be the case, whereas gasoline using a combustion engine, the hydrogen would most likely go through a fuel cell. And with that being the case, we need to look at the efficiencies of both. Now a gasoline engine has an efficiency rate of roughly 20%, with a maximum efficiency rate of about 58%. A hydrogen fuel cell, on the other hand, has a standard efficiency rate of 60%, with a maximum efficiency rate of 90%. And there are still other factors to take into consideration, such as unburned gasoline being released into the atmosphere as black carbon. And, of course, the fuel cells byproduct of being just water. But ultimately, comparing hydrogen to anything else by volume is not the best way to measure an energy density, because when measured by unit mass, in other words, kilogram to kilogram, hydrogen is still the most energy dense element in the universe. And his last point on pipeline embrittlement.
And that is very true. And something that midstream companies around the world are looking into. But to say that hydrogen makes steel pipelines brittle is a bit too broad of a statement, because just to look at that statement on the surface means any amount of hydrogen in the pipeline will cause embrittlement. And that's not true. We know for a fact now that five to 10%, hydrogen in the pipeline does not cause embrittlement. And that percentage keeps bumping up until embrittlement gets noticed. But even so that is a legitimate issue, and something that pipeline companies around the world are looking to resolve. All right, that's it for me, everyone. If you have a second, I would really appreciate it. If you can leave a good review on whatever platform it is that you listen to Apple, podcasts, Spotify, Google, whatever it is, that would be a tremendous help to the show. And as always, if you have any feedback, you're always welcome to email me directly at firstname.lastname@example.org. And as always, take care. Stay safe.I'll talk to you later.
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