Paul Rodden • Season: 2023 • Episode: 236
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Welcome to The Hydrogen Podcast!
In episode 236, Ballard Power gets a huge order from Germany. And an opinion piece on hourly matching inadvertently asks an even bigger question about hydrogen development. I’ll go over all of this on today’s hydrogen podcast.
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Paul Rodden
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Transcript:
Ballard Power gets a huge order from Germany. And an opinion piece on hourly matching inadvertently asks an even bigger question about hydrogen development. I’ll go over all of 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 article from Seeking Alpha Ballard Power winds order for 96 hydrogen fuel cell engines from European customer. Ballard power systems, which was up 1.7% pre market Tuesday morning said it received purchase orders for 96 hydrogen fuel cell engines from European bus manufacturer, Solaris bus and coach financial details though, weren’t disclosed. Ballard said it expects limited initial deliveries of the 96 fuel cell engines to start in late 2023, with most being delivered through 2024. The company said the orders include the largest single order to date it has received from Solaris an order for 52 Fuel Cell engines that will power Solaris Urbino Hydrogen buses for deployment by German public transport operator Rebus Regionalbus Rostock, the orders will add to the more than 110 Fuel Cell buses that Solaris has already deployed with customers in Europe to date. Okay, well, great news for Ballard on this order from Solaris.
Now, to me what this highlights is what we’ve talked about several times on this show, and that is just where will we see the first applications for hydrogen. And I realize that for large European metropolitan areas, 110 Fuel Cell buses may not seem like that much. But if you view this in the context of just how fast all this is happening, it becomes quite affirming. Now, add that to the timeline mentioned in this piece, and we can get a more accurate view of where certain aspects of this industry are. And that is a question of scale. Just how fast can these electrolyzer and fuel cell manufacturers scale up production to hit these large orders? Because now we’re seeing real demand pop up thanks to Germany, which is also grabbing up as much hydrogen as possible. Next, in an opinion piece by Jim Martin in the messenger, Can we find common ground on green hydrogen? Jim writes, In an ironic twist, some environmental organizations are calling on US Treasury officials to take actions that would, in the author’s opinion, hamstring the pursuit of a decarbonized economy, potentially killing millions of jobs in the process. Green hydrogen is a potentially game changing technology that has the potential to displace carbon based fuels and heavy industries that are the backbone of the US economy and American competitiveness, including trucking, ocean shipping, aviation, cement, fertilizer, steel, and many others.
Yet many well meaning environmental advocacy groups are calling for regulatory measures that would kill a green hydrogen market before it gets off the ground. For Green hydrogen to stand a chance of decarbonizing the economy. It must be scaled to be emissions free, affordable and widely available. Over the last two decades, we learned as a nation how to scale renewable technologies by incentivizing the development of wind and solar energy. These emerging industries needed help initially so they can thrive and now they are contributing greatly to our nation’s energy supply. Solar and wind were not deployed at scale overnight, there was an incremental build out when the balance environmental and investment concerns to drive down costs. Energy companies, legislators, regulators and environmental organizations work together to make sure solar and wind build out was done effectively and done right and it worked. emissions free solar and wind energy are now cost competitive with other traditional resources such as natural gas. Today’s emerging industry is green Hydrogen. Hydrogen is produced by an electrolyzer a machine that uses electricity to split water into oxygen and hydrogen. That hydrogen can be captured and liquefied to fuel industry.
If the electricity used to make hydrogen is from a renewable source like wind or solar, the hydrogen is green hydrogen, green hydrogen production facilities can cost billions to build for green hydrogen to be affordable and available and competitive with hydrogen from hydrocarbon based electricity it’s electrolyzer, it needs to run 24 hours a day. Because the sun doesn’t shine the wind doesn’t blow 24 hours a day, hourly matching of an electrolyzer electric demand to its renewable source would mean that it can only operate when wind and solar are available not 24 hours a day, resulting in less green hydrogen at a much higher cost. In fact, several studies have established that hourly matching balloons green hydrogen costs up to 175% and actually leads to increased emissions. Environmental advocates understand the intermittency of solar and wind yet, there are calling for the immediate adoption of an hourly matching requirement that could kill green hydrogen markets in the US and the green hydrogen jobs they could create.
The jobs potential of green hydrogen is not trivial. A small 50 megawatt green hydrogen plant, for example, can employ up to 300 people and its supply chain, an hourly matching requirement could shut the door on the best chance that we had to decarbonize the country and to create multiple 1000s of green hydrogen jobs across multiple gigawatts of green hydrogen production. At least some environmental groups would have you believe that strict hourly matching is the only way to truly ensure that green hydrogen is green. But that’s simply not true. Annual matching is a much better and practical way to account for the renewable energy that produces green hydrogen, enabling it to mature and become price competitive with other forms of hydrogen. Under annual matching, every hour of power used to create green hydrogen will be accounted for by the generation of an hour of power from a clean energy source annual matching still results in entirely green hydrogen. So why does some groups want to implement measures that would kill green hydrogen, theoretically, hourly matching doesn’t work in practice and now stands in the way of a real opportunity to produce a renewable fuel that can decarbonize the hardest to decarbonize parts of the American economy. Despite the urgency to reduce greenhouse emissions as fast as possible, an ill advised hourly matching rule could inadvertently slant the floor of a nascent hydrogen market toward more carbon, not less.
This wouldn’t be the first time that well meaning groups miss the forest for the trees, but this time, they could thought a foundational part of the country’s decarbonisation future, our nation and planet don’t have time for that. To be a global leader in clean energy, the US must develop a cost competitive green hydrogen market, just like we did with wind and solar, we need alternatives to hydrocarbons and we must find common ground to create a strong foundation for green hydrogen. Okay, so some critical talking points against hourly matching. Now proposed hourly matching and additionality requirements are both brought up as ways to try to balance the load demand for renewable electrolytic hydrogen. And I understand why these need to be discussed globally are going through one of the hottest years on record, which is putting tremendous demand on energy grids. And so if the hydrogen community that wants to strictly use this method of generating hydrogen must also take part in this discussion. And the risks that the author lays out in this piece are legitimate for renewable driven electrolytic hydrogen to get cost competitive with steam methane reforming plus CCUS concessions must be made to somehow reduce the load on the grid. And with so many talking electrification, it looks like grid load is only set to increase over the coming years. And that is why we need to talk about multi tech pathways to generate hydrogen. Hydrogen has immeasurable upside and how it can save our energy future.
That’s why we need to look at cleaning up legacy hydrogen first, but steam methane reforming and carbon capture usher in the era of clean hydrogen. So downstream development can occur. In other words, leverage hydrocarbon feedstock solutions, nuclear and nuclear, hydrogen and even natural hydrogen as it gets developed and scaled. And so while that segment of the industry is scaling, we can outline how best to proceed with a renewable driven pathway. Because with this path forward, electrolyzer manufacturers can still develop and sell their equipment to non renewable alternatives. Now, there are some areas around the world that won’t need this debate, they can scale up or renewable driven solution without having to necessarily concern themselves about grid load. But here in the US and in Europe, these questions need to be asked and we in the hydrogen industry need to address them properly.
Alright, that’s it for me, everyone. If you have a second, I would really appreciate it if you could leave a good review on whatever platform it is that you listen to. Apple podcast, Spotify, Google, YouTube, whatever it is that will be a tremendous help to the show. And as always, if you ever have any feedback, you’re welcome to email me directly at info@thehydrogenpodcast.com. So until next time, keep your eyes up and honor one another. Hey, this is Paul. I hope you liked this podcast. If you did and want to hear more, I’d appreciate it if you would either subscribe to this channel on YouTube, or connect with your favorite platform through my website at www.thehydrogenpodcast.com. Thanks for listening. I very much appreciate it. Have a great day.
