July 22, 2021 • Paul Rodden • Season: 2021 • Episode: 31
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In episode 031 , On today's show, what does the need for clean water mean for green hydrogen globally? And what could that impact be on arid environments? All of that on today's hydrogen podcast.
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On today's show, what does the need for clean water mean for green hydrogen globally? And what could that impact be on arid environments? All of that 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 will unlock the potential of hydrogen in this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast.
Now, some of you may know, I grew up in an arid environment. And growing up in an arid environment, you develop a very keen understanding of the importance of water. And it wasn't until a close friend of mine asked me about the impact of green hydrogen on water sources in arid environments. And it was honestly something I hadn't considered, but it is a very important topic, especially for this industry. If a governmental body or organization wants to set up a green hydrogen facility in an arid environment, what is the impact their water use is going to have in the area? Well, the legal minds at K&L Gates tackle this topic also. And according to an article in JD Supra, earlier in 2020, K&L Gates released the H two Handbook, legal regulatory policy and commercial issues impacting the future of hydrogen.
There the firm detailed governmental and commercial issues related to molecular hydrogen's critical role in decarbonizing energy future for the world. One such issue involves using water as feedstock for developing molecular hydrogen as a fuel and energy storage medium. The UN has observed that more than 2 billion people live in countries experiencing high water stress, the situation will likely worsen as populations and the demand for water grow, and as the effects of climate change intensify. Yet, because hydrogen production requires water it could also add water stress while addressing climate changes adverse effects. Indeed, producing gray or blue hydrogen requires large amounts of water for Steam in the Reformation process. And producing green hydrogen from electrolysis can require as much as nine kilograms of high purity water per kilogram of hydrogen, on the other hand, was efficient supportive infrastructure, such as desalinization and reverse osmosis plants to purify sea and wastewater as hydrogen feedstock, as well as legal mechanisms facilitating changes in place and purpose of water use, water availability may ultimately prove to be lesser concern in hydrogen production. Nevertheless, they say the tension among many potential needs and uses for clean water is one of several to keep in mind as the hydrogen economy continues to emerge.
Now some of the issues they believe to consider for hydrogen production, one being in the US water use as a hydrogen feedstock will run into water use regimes that differ depending on the jurisdiction involved, dictating where the hydrogen production facilities are located. In Australia, water use diverted to hydrogen production will impact both agriculture and certain coastal communities that could be home to hydrogen export infrastructure. And in the UK, the cost of using water to produce domestic hydrogen will be weighed against the cost of importing hydrogen. So diving a little deeper into the issues in the United States, using water as a feedstock for hydrogen production raises a unique issue depending on the jurisdiction where the hydrogen is produced. Water use in the eastern United States is primarily managed as a riparian resource, which means if water runs through or abuts the land on which the production occurs, it may be reasonable use.
Now compared to the mixed riparian or pure appropriative regimes in the Midwest, mountain states and West Coast, riparian regimes have generally offered more water and more flexibility in water use arrangements. And while this may weigh in favor of sitting more hydrogen production facilities in the eastern United States, increasing demand and tightening restrictions require hydrogen producers to carefully ascertain the limits on water resources for potential production facility siting. Now conversely, in most states west of the Mississippi, riparian use is either more regulated, mixed with prior appropriation principles, or eliminated entirely. Prior appropriation is more restrictive water rights regime, requiring water rights or permits for nearly every type of use of groundwater or surface water. These paper rights have specific points of withdrawal and places and purposes of use, and are subject to relinquishment for periods of non use.
They're also highly regulated in times of scarcity. And those with more senior rights have a priority over those who obtain their rights later in time. And what I can tell you about water rights is this. My first job out of college was at the state engineer's office in Las Cruces, New Mexico. Working on water rights adjudication, and this is something that they take very seriously. So while water usage may not be that big of a concern in wetter areas, water becomes a much more critical resource as you move into the west and southwest, but water is a global issue.
And next on this list is Australia. And in Australia, accessibility to water will be a key consideration for producing hydrogen via electrolysis. Australia is the driest continent on earth apart from Antarctica, and water rights are controversial and often politicized issue. The relatively intensive use of high purity water has the potential to generate community concerns around water uses. And because of that, focus groups routinely indicate that water concerns are particularly significant for Australian farming communities, as well as the broader community, giving frequent droughts and associated water restrictions in many parts of Australia.
Accordingly, water security is a key issue that needs to be addressed to gain social acceptance, and community support for Australian hydrogen projects that will divert water from agricultural enterprises and other uses to hydrogen production for fuel and energy storage. However, the overall amount of water needed to be diverted for hydrogen production in Australia isn't large. It's estimated that by 2040, Australian export and hydrogen could require approximately 5.6 to 28.6 billion litres of water annually. Contrast that with a total consumption of water in Australia in 2015, and 16, which is about 16.1 trillion litres, with industries using about 2 trillion litres of that amount. And it's reasonable to conclude that hydrogen production for Australian export demands far less water than other industries.
And from a legal perspective, industrial water rights can be obtained at a cost in Australian states and territories, and water access licenses are likely to impose a constraint on operations as a result of relatively liberal policies. However, the purchase of water allocations will add to baseline hydrogen production costs, which may fluctuate dramatically depending on rainfall in a given year. And further to that, maintaining social licenses and community support for projects. It may be necessary for hydrogen producers to rely on non potable sources of water to ensure that they retain community acceptance and support.
This may result in additional production cost to purify the water to a suitable standard for hydrogen production, for example, reverse osmosis or desalination. And I would honestly envision that most parts of Australia will experience the same kind of hesitancy regarding water rights as the southwestern part of the United States. And lastly, in this list, we have the United Kingdom, and in the UK, hydrogen production may be limited by both available inland and coastal water resources. The large amounts of water needed for hydrogen production could constrain the process within the United Kingdom, depending on where the production facilities are located. In practical terms, a connection to the local water supply will be needed for inland hydrogen production facilities. And from a legal perspective, the Department for environment, Food and Rural Affairs has overall responsibility for setting the policy and regulatory framework for water in the United Kingdom.
This policy expects water companies to provide resilient water supplies supported by robust water resource management plans. To deliver these the department oversees a complex delivery landscape of multiple regionalised regulators and privately owned water companies. But the nature of this regionalised approach, regional water companies may diverge with respect to how water is diverted for hydrogen production, unless a centralized framework is imposed upon them by a regulator. It's unclear whether the such a centralized approach will emerge alongside the emergence of hydrogen production within the UK. Now first of that, the water services Regulation Authority regulates the water services that the water companies provide.
And the Environment Agency regulates abstraction licenses relating to surface water and groundwater sources to ensure that abstractors do not impinge on other abstractors rights and leave enough water for environmental needs. These actors will almost certainly need to consider hydrogen production as it gains footing United Kingdom and respond accordingly. Otherwise, these agencies risk leaving unanswered many regulatory questions around water use for the novel purpose of hydrogen production. Now all that being said, remains to be seen whether importing hydrogen produced elsewhere is more viable, given the country's size and available water resources.
In the UK, low carbon hydrogen could be produced for around a cost of 15 to 25 pounds per megawatt hour in countries with cheap gas and renewable resources. However, transporting this hydrogen to the United Kingdom is likely to are out around $20 per megawatt hour to the cost of hydrogen. This is a similar cost range to the cost of producing hydrogen in the UK, implying that the imported hydrogen could play a complimentary role to but not necessarily cheaper than domestic hydrogen production. And what this tells me what all this tells me is that there is not one single solution for producing hydrogen globally and that the various technologies currently and those yet to be developed will have their own unique place in this market.
Okay, that's it for me, everyone. If you have any questions, comments or concerns about how water rights in water use playing to hydrogen production, come on by my website and let me know. I would really love to hear from you. And as always, take care. Stay safe. I'll talk to you later.
Hey, this is Paul. I hope you liked this podcast. If you did 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.