Hydrogen, often touted as the fuel of the future, holds immense promise as a clean energy source. However, understanding the nuances and demand of hydrogen is crucial in evaluating its potential for widespread adoption. GLG’s Sam Stopps interviewed industry expert Dr. Kris Hyde, the former Technology Development Manager at ITM Power and a leading authority in the hydrogen market with more than 20 years of experience in the space, to delve into the intricacies of hydrogen demand and its applications.
Can you provide a breakdown of hydrogen production, covering how much is green, grey, and blue?
Worldwide hydrogen production at the moment is around 95 million tons per year. Of that, around 0.7% is low carbon, and the vast majority of that is blue hydrogen. Blue is hydrogen that is made in a traditional way from natural gas – split it into hydrogen, carbon dioxide – but with blue hydrogen, you sequester the carbon dioxide and essentially bury it underground somewhere. So that leaves the amount that’s green at somewhere around 0.16% of the overall hydrogen market.
What are the current market status and growth projections for green hydrogen?
It very much depends on whom you listen to. The IEA (International Energy Agency), is quite an authoritative body and they produce an annual report on the current state of hydrogen and their expected growth figures. A lot of people take stock in what they’re saying. But they’re projecting 38 million tons of hydrogen projects announced for 2030. Now, that’s equivalent to about 260 gigawatts of green hydrogen electrolysis.
I think some of these numbers are absolutely way off base. They’re based on announced projects. And there’s a big, big difference between announced projects and actually getting things on the ground. Ignoring everything else, these quite large projects they’re dealing with in order of perhaps two, three, four, five years of lead time, even once purchase orders have been signed. Personally, I think a more realistic target is probably much, much lower, for actually on-the-ground operational by 2030. I suspect we’re somewhere in the region of 20 to 30 gigawatts, maybe 50 gigawatts on the outside. So considerably smaller than the IEA projections.
Can you provide an overview of the key technologies required for hydrogen production, and are there any areas that demand improvement or investment?
The key technologies that are required are in place in one form or another. We have electrolyzers, compressors, pipelines, and fuel cells. And by far, the vast majority of the market for hydrogen is pre-existing. The industrial market for hydrogen, as I said, is 95 million tons a year. So there are no new technologies really that are required, but there are certainly technologies that require improvement.
I’d say within the electrolyzer, there are the AC/DC power supplies. They take the incoming AC power from the grid and convert it to DC power, which needs to be fed into the electrolyzers. At a large scale, these are very bespoke and very expensive. If you’re looking at the cost of an electrolyzer system as a ballpark figure, about a third of it will be the cost of power conversion, so the transformers and these AC-to-DC converters. I think there’s definitely a need for people to start investing in low-cost, high-quality power supplies for these larger systems.
In terms of the rollout, liquefaction is important. There are a lot of projects, particularly large transport projects the scale of ferries and ships that require liquefied hydrogen. And to go to the US there’s a big demand for liquified hydrogen trucks. At the moment, on both sides of the Atlantic, there is very, very little capacity for liquefying hydrogen. You’re talking the order of 20 or 30 tons per day on each side of the Atlantic, that’s the sort of ferries and ships people are talking about per vessel. So the existing capacity is already used up, and there is nothing available to do these large projects. There’s a lot of these quite large transport projects that are stalled because of a lack of liquefied hydrogen. Up until now, of course, there’s been no demand, so nobody’s made the investment, but it’ll be nice for that chicken and egg to be broken and for people to go forth and make some of these large liquefaction plants to produce liquified hydrogen that is needed.
And the third technology that would benefit from further investment would be solid oxide electrolyzers. At the moment, nearly all of the industrial electrolyzers that are out there are based on alkaline or PEM technology. I can go into those if people aren’t familiar with the differences. These are established, pre-existing technologies. They’ve been around for a reasonable amount of time. Solid oxide is something different. It runs much hotter, and that makes it more efficient.
What are the current applications for hydrogen and how do you see this evolving this year and in the coming years?
I guess by far the biggest application, is the preexisting market for industrial hydrogen. That’s a nice 95 million tons a year. If we’re talking green hydrogen, there are a lot more electrolyzers sold in industrials than anything else. Now that breaks down primarily into oil refining. After that it is generally ammonia production or hydrogen for other chemical uses. Steel is something that is starting to grow: People are very interested in using hydrogen as a reducing agent instead of coke in the production of steel. Obviously coke is very polluting and hydrogen is potentially green and it gives you the chance of making some low carbon footprint steel. I think there are several demonstration projects that have started around the world on this, and that’s only going to grow in the next few years.
We’ve also briefly touched on the transport market. It’s small but growing. The transport market grew about 40% last year. There are about 8,000 trucks in the world, about 58,000 cars and vans running on hydrogen. Should be said the bulk of these vehicles are in China. They are pushing very hard on hydrogen vehicles. After that, I think South Korea is pushing hard. In the West, there are relatively low sales per year for cars at the moment in Europe, but buses and trains are taking off.
It’s been a mixed year. There have been a few projects where people were doing trials, and they were canceled. Equally, there are a few new companies who have come on and are trialing it in the next few months. So overall, it is still growing in that area. In the US, again, cars were the focus. If you went back five or 10 years, there’s a big rollout of hydrogen refueling stations. However, that has slowed down and trucks are presently the focus.
About Dr. Kris Hyde
Dr. Kris Hyde is a leading UK authority on the hydrogen market with more than 20 years of experience in this space. He’s a director at Hollingworth Design and is a consultant to the European Marine Energy Center. He also operates his own consultancy firm, HYDErogen, and serves as Director. Previously, he was a Technology Development Manager at ITM Power between 2004 and 2018 where he worked on translating ITM’s newly developed membranes and cells initially into working demonstrations of fuel cells and electrolyzers and then bringing those products to market.
This article is adapted from the GLG Teleconference “Hydrogen Demand and Applications in 2024” hosted on January 31, 2024. If you would like access to this event or would like to speak with experts like Dr. Kris Hyde, or any of our industry experts, please contact us below.