Author: Forbes Ariel Cohen Contributor with assistance from Natasha Orehowsky and James Grant
As the global energy transition unfolds, conventional power sources that rely on hydrocarbon-based fuels are gradually relinquishing market share to low and zero emission alternatives. These shifts have been most dramatic in the power sector, where cheap wind and solar energy have already started to displace dirty coal.
The transportation sector is no different. Full battery electric vehicles (BEVs) and plug-in hybrid vehicles (PHEV) like the Tesla Model 3, the Chevy Bolt, and the Toyota Prius Prime (respectively) are disrupting in an industry that has been dominated by the internal combustion engine (ICE) for the past 100 years. In fact, the electric vehicle market showed year-over-year growth of 57% in 2018 with over 3 million electric vehicles now on the road. But when it comes to substitutes for petroleum powered engines, electric cars aren’t the only game in town.
Enter hydrogen fuel cell vehicles (FCVs).
Hydrogen fuel cells – the heart of the FCV concept– are a different kind of battery: pressurized hydrogen (H2) is the ‘fuel’ in the tank, which then interacts with Oxygen (O2) in the air to create electricity through a chemical reaction. Fuel cells are inherently more efficient than combustion engines, which must first convert chemical potential energy into heat, and then mechanical work. They are also cleaner than ICEs: the only by product is H2O – water—and its clean enough to drink. Hydrogen fuel cells can be thought of as batteries that never run flat as long as the H2 keeps coming.
Hydrogen power is making a splash in countries all over the world, from the U.S. to Japan, thanks to the element’s impressive energy storage potential and low emission profile. The resources is also in ample supply: think the global ocean.
Hydrogen is the most abundant element in the universe. The easiest way to produce it is to separate it from the other elements in the molecules where it occurs. Hydrogen atoms can be taken from water; natural gas; and methane from biomass. One common form of hydrogen extraction is the electrolysis of water which involves using electrical energy to separate water into gaseous hydrogen (H2) and oxygen (O2), thereby converting electrical energy into chemical energy.
This hydrogen can then be stored or transported, or it can be converted back to electricity in a fuel cell. If the energy used for the process comes from renewable energy, the process is entirely emissions-free (so-called green hydrogen) with water and oxygen as the only by products.
Japan has heavily invested in hydrogen FCVs as it looks towards the future with ambitious goals to become a hydrogen-fuelled society, showcasing its effort when its hosts the 2020 Olympics with the rolling out of hydrogen-fuelled buses and aiming to have 40,000 FCVs on the road. Toyota (NYSE:TM) has gambled on the hydrogen technology as well, introducing its hydrogen-fuelled car, the Mirai, and has partnered with the Japanese government to fund fuelling stations for hydrogen fuel cell cars, hoping to have 900 fuelling stations by 2030.
Japan is not alone in its push towards hydrogen. Australia is aspiring to become a hydrogen exporter, releasing a report in August 2018 by the Hydrogen Strategy Group to galvanize support and propose strategies for Australia to harness its hydrogen production capabilities. Japan would be a key customer in its hydrogen export plan. In fact, Australia successfully exported a small amount of clean hydrogen, powered by solar, to Japanese petroleum conglomerate JXTG Holdings, Inc. (NYSE:JXHLY) in April.
China has committed to further research into hydrogen production into its transportation sector, with China Petroleum and Chemical Corp. (NYSE:SNP) indicating continued progress in its hydrogen industry plan. Government subsidies have already helped propel China to become an industry leader in renewable energy and electric vehicles.
Even smaller communities are benefiting from clean hydrogen. Orkney Islands, a rugged archipelago off the coast of northern Scotland, turned to hydrogen when they faced an abundance of clean energy from wind, waves, and tides. The community of islands has become remarkably successful in incorporating hydrogen into daily life – soon to have the world’s first car and passenger ferry run on hydrogen.
The push towards clean hydrogen is important for the future of a sustainable environment and provides an opportunity for countries to introduce a new market, in turn energizing economies and creating jobs.
However, clean hydrogen has its downfalls. Generating ‘green hydrogen’ is an energy-intensive process, as a significant amount of power is needed for the electrolysis process. Perhaps most critically, the infrastructure needed for the hydrogen power supply chain does not exist yet. Subsequently, producing clean hydrogen is costly to implement, but industry experts anticipate that costs will drop by roughly 70% in the next 10 years thanks to increased electrolysis capacity and scaling up of relevant technologies. Remember how expensive wind and solar used to be?
As policymakers combat climate change, clean hydrogen has the potential to reduce global emissions and be an important resource emission-free energy. It’s adaptable enough to be used in the transportation and industrial sectors – both of which are heavily reliant on fossil fuels., It allows for the safe storage of energy, as liquified hydrogen (similar to liquified natural gas) can be easily transported to other markets.
While challenges of cost and technological advancement may slow progress for clean hydrogen, these are known and surmountable difficulties. Commitments by Australia, Japan, and others have shown that creating a market for the abundant zero-carbon fuel is possible. In the race between hydrogen fuel cells and all-electric batteries to power the future of global transportation, however, the ultimate loser will be the internal combustion engine.