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Green Hydrogen Isn’t Nearly As Simple As Promised
Publisher's Note: This post appears here courtesy of the John Locke Foundation. The author of this post is Jon Sanders.
The Wall Street Journal on February 16 took careful note of "Europe's Lesson in Green Hydrogen." That lesson places significant doubt on hydrogen as the "carbon-neutral fuel of the future":
A series of policy fights in Brussels is highlighting the perils of the new "hydrogen economy" even as political enthusiasm for it reaches a new peak.
It's hard to overstate how much the green agenda relies on hydrogen's alleged promise. It holds out the prospect of carbon-free transportation even if electric-vehicle battery technology never improves. Hydrogen also could be used in industrial processes that can't easily be electrified to run directly on renewable power.
There's one problem: physics. Hydrogen atoms don't appear in isolation in nature so they must be produced, usually by splitting water molecules via electrolysis. A lot of energy is lost in this process, and hydrogen is only as green as the electricity used to electrolyze it.
As WSJ explains, the European Union wants to triple the amount of hydrogen energy in the European Union (from 6.5 million metric tons to 20), see at least half of the hydrogen be produced in Europe, and then require that "by 2028 hydrogen is electrolyzed using power only from newly installed renewable sources such as windmills or solar panels."
That would be quite a grid-crippling rule - hence the fight:
Producing one million metric tons of hydrogen would require 11 gigawatts of installed capacity for offshore wind, 22 gigawatts of onshore wind, or 52 gigawatts of solar, according to S&P Global Commodity Insights. The numbers are different to account for the intermittency of those sources. Installed capacity in Europe today is 17 gigawatts for offshore wind, 188 gigawatts for onshore wind and 196 gigawatts for solar.
Put another way, meeting the EU's domestic clean-hydrogen production target in 2030 would require about 500 terawatt-hours of electricity. That's roughly equivalent to Germany's current annual power consumption. Since renewable power production across the EU currently measures 1,100 terawatt-hours, making so much hydrogen would require increasing renewables by 44%.
WSJ blasts politicians and environmentalists for painting a false picture of green hydrogen, warning:
The public is about to discover that hydrogen doubles down on all the costs of renewables-skyrocketing prices, unstable electric grids, and dependence on China for rare-earth metals.
Hydrogen in the Carbon Plan
This news is important to North Carolina because some part of the initial Carbon Plan is based on the question of being able to transition natural gas-fired plants to hydrogen. In our analysis before the North Carolina Utilities Commission (NCUC), Locke's Center for Food, Power, and Life (CFPL) warned that costs, supplies, and other aspects concerning green hydrogen were riddled with uncertainties:
Carbon Plans Are Highly Dependent on Hydrogen Assumptions
It is important to note that in order to achieve 100 percent carbon neutrality by 2050, each scenario in Duke's Carbon Reduction Plan would rely heavily on the use of hydrogen fuel at new and some existing natural gas units, which constitute between 8,800 MW-9,900 MW of capacity, depending on the scenario.
The primary shortcoming of this strategy is Duke's fuel-cost assumptions for hydrogen, which are substantially lower than current costs. Duke assumes a cost of $1 per kilogram (kg) of so-called green hydrogen, which is made using carbon-free electricity. $1/kg translates to a fuel cost of $7.40 per million Btu (MMBtu).
These cost assumptions were based on the Department of Energy ("DOE") price target for clean hydrogen and are not a reflection of current costs for hydrogen fuel produced using the methods outlined by DOE. Currently, hydrogen from renewable energy costs about $5/kg, which translates to a fuel cost of $37/MMBtu.
Duke also notes the uncertainties surrounding whether there will be an adequate supply of hydrogen fuel for these facilities, as powering these facilities with green hydrogen would necessitate the construction of an entirely new supply chain. As a result, Duke's heavy reliance on hydrogen to achieve carbon neutrality is highly speculative.
WSJ noted that there was an obvious answer to the quandary - using nuclear to electrolyze hydrogen. Strangely, however, that's the one zero-emissions technology environmentalists and politicians avoid:
Nuclear is the obvious solution. Due to its ability to produce near-constant power, only seven gigawatts of installed nuclear capacity are required to produce one million metric tons of hydrogen. But Brussels, egged on by nuclear skeptics in Germany's government and elsewhere, is dragging its heels.
"Obvious" is an understatement. Nuclear is by far the most efficient energy producer. The EU's choice is either (a) have 7 gigawatts of nuclear capacity to produce the green hydrogen or (b) build so much new intermittent solar and wind capacity that, if it wasn't used for electrolyzing hydrogen, it could power all of Germany.
This insight is similar to the sensibility brought by our analysis to the NCUC. Our model Least Cost Decarbonization portfolio employs battery storage but doesn't charge them with intermittent, unreliable sources like solar and wind. Instead, they are "charged using reliable nuclear power plants, ensuring the storage resources would be available when needed most."
Using nuclear generation to charge battery storage would ensure Duke Energy could meet peak demand without capacity shortfalls (blackouts) even during the darkest cold of winter or the worst summer heat wave. Other Carbon Plan portfolios all risked capacity shortfalls.
The Carbon Plan does at least find that "ARs [advanced nuclear reactors] provide flexible operations that can support hydrogen production, thermal storage, and integration with variable renewable energy resources."
If green hydrogen is to make economic sense - and the law behind the Carbon Plan requires the NCUC's choices to be least-cost and reliable - then as with charging battery storage, nuclear power, not expensive solar and wind, must be used to produce it.
Go Back
The Wall Street Journal on February 16 took careful note of "Europe's Lesson in Green Hydrogen." That lesson places significant doubt on hydrogen as the "carbon-neutral fuel of the future":
A series of policy fights in Brussels is highlighting the perils of the new "hydrogen economy" even as political enthusiasm for it reaches a new peak.
It's hard to overstate how much the green agenda relies on hydrogen's alleged promise. It holds out the prospect of carbon-free transportation even if electric-vehicle battery technology never improves. Hydrogen also could be used in industrial processes that can't easily be electrified to run directly on renewable power.
There's one problem: physics. Hydrogen atoms don't appear in isolation in nature so they must be produced, usually by splitting water molecules via electrolysis. A lot of energy is lost in this process, and hydrogen is only as green as the electricity used to electrolyze it.
As WSJ explains, the European Union wants to triple the amount of hydrogen energy in the European Union (from 6.5 million metric tons to 20), see at least half of the hydrogen be produced in Europe, and then require that "by 2028 hydrogen is electrolyzed using power only from newly installed renewable sources such as windmills or solar panels."
That would be quite a grid-crippling rule - hence the fight:
Producing one million metric tons of hydrogen would require 11 gigawatts of installed capacity for offshore wind, 22 gigawatts of onshore wind, or 52 gigawatts of solar, according to S&P Global Commodity Insights. The numbers are different to account for the intermittency of those sources. Installed capacity in Europe today is 17 gigawatts for offshore wind, 188 gigawatts for onshore wind and 196 gigawatts for solar.
Put another way, meeting the EU's domestic clean-hydrogen production target in 2030 would require about 500 terawatt-hours of electricity. That's roughly equivalent to Germany's current annual power consumption. Since renewable power production across the EU currently measures 1,100 terawatt-hours, making so much hydrogen would require increasing renewables by 44%.
WSJ blasts politicians and environmentalists for painting a false picture of green hydrogen, warning:
The public is about to discover that hydrogen doubles down on all the costs of renewables-skyrocketing prices, unstable electric grids, and dependence on China for rare-earth metals.
Hydrogen in the Carbon Plan
This news is important to North Carolina because some part of the initial Carbon Plan is based on the question of being able to transition natural gas-fired plants to hydrogen. In our analysis before the North Carolina Utilities Commission (NCUC), Locke's Center for Food, Power, and Life (CFPL) warned that costs, supplies, and other aspects concerning green hydrogen were riddled with uncertainties:
Carbon Plans Are Highly Dependent on Hydrogen Assumptions
It is important to note that in order to achieve 100 percent carbon neutrality by 2050, each scenario in Duke's Carbon Reduction Plan would rely heavily on the use of hydrogen fuel at new and some existing natural gas units, which constitute between 8,800 MW-9,900 MW of capacity, depending on the scenario.
The primary shortcoming of this strategy is Duke's fuel-cost assumptions for hydrogen, which are substantially lower than current costs. Duke assumes a cost of $1 per kilogram (kg) of so-called green hydrogen, which is made using carbon-free electricity. $1/kg translates to a fuel cost of $7.40 per million Btu (MMBtu).
These cost assumptions were based on the Department of Energy ("DOE") price target for clean hydrogen and are not a reflection of current costs for hydrogen fuel produced using the methods outlined by DOE. Currently, hydrogen from renewable energy costs about $5/kg, which translates to a fuel cost of $37/MMBtu.
Duke also notes the uncertainties surrounding whether there will be an adequate supply of hydrogen fuel for these facilities, as powering these facilities with green hydrogen would necessitate the construction of an entirely new supply chain. As a result, Duke's heavy reliance on hydrogen to achieve carbon neutrality is highly speculative.
WSJ noted that there was an obvious answer to the quandary - using nuclear to electrolyze hydrogen. Strangely, however, that's the one zero-emissions technology environmentalists and politicians avoid:
Nuclear is the obvious solution. Due to its ability to produce near-constant power, only seven gigawatts of installed nuclear capacity are required to produce one million metric tons of hydrogen. But Brussels, egged on by nuclear skeptics in Germany's government and elsewhere, is dragging its heels.
"Obvious" is an understatement. Nuclear is by far the most efficient energy producer. The EU's choice is either (a) have 7 gigawatts of nuclear capacity to produce the green hydrogen or (b) build so much new intermittent solar and wind capacity that, if it wasn't used for electrolyzing hydrogen, it could power all of Germany.
This insight is similar to the sensibility brought by our analysis to the NCUC. Our model Least Cost Decarbonization portfolio employs battery storage but doesn't charge them with intermittent, unreliable sources like solar and wind. Instead, they are "charged using reliable nuclear power plants, ensuring the storage resources would be available when needed most."
Using nuclear generation to charge battery storage would ensure Duke Energy could meet peak demand without capacity shortfalls (blackouts) even during the darkest cold of winter or the worst summer heat wave. Other Carbon Plan portfolios all risked capacity shortfalls.
The Carbon Plan does at least find that "ARs [advanced nuclear reactors] provide flexible operations that can support hydrogen production, thermal storage, and integration with variable renewable energy resources."
If green hydrogen is to make economic sense - and the law behind the Carbon Plan requires the NCUC's choices to be least-cost and reliable - then as with charging battery storage, nuclear power, not expensive solar and wind, must be used to produce it.
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