But perhaps hydrogen’s greatest potential lies in its ability to store energy for rainy days. While fossil fuels are stores of energy from prehistoric sunlight, hydrogen can be used to store the solar energy of the previous 12 hours. “You need green hydrogen to continue to increase the amount of renewable power,” says Mowill. Once an electricity grid gets to a critical mass of renewable inputs from sources such as wind and solar, something has to step in to stabilize and smooth out those peaks and troughs of supply and demand. “You can’t solve that with batteries; it’s at a scale that wouldn’t be practical,” Mowill says. “Hydrogen is a very good way of balancing out this.”
And unlike batteries, hydrogen can be efficiently transported. It can be compressed into liquid hydrogen, which does require some energy, or it can be converted into ammonia, which is already transported around the world, then “cracked” back into hydrogen and nitrogen at its destination.
Countries like Japan and South Korea, which are home to energy-intensive industries (such as steel and the manufacturing of cars and ships) but lack the renewable resources to power them sustainably, are eager to import hydrogen from countries with an excess of renewable energy, such as Australia.
“The idea is basically that you produce those hydrogen molecules or hydrogen direct derivatives in countries with abundant renewable resources,” says Carlos Trench, head of hydrogen projects at Engie Australia & New Zealand. “Then you transport the molecules—whether it’s ammonia or any other derivative—and then you reconvert that molecule into green power at the destination where a direct development of renewables is not feasible.”
Japan has already declared its intention to be a world leader in the hydrogen economy as part of its carbon-neutrality strategy. South Korea is hoping hydrogen will supply around one-third of its energy by 2050.
But Percy stresses that despite all the excitement, green hydrogen is still currently a bit player in the global decarbonization game. “It’s really very small-scale right now,” he says. But it is ramping up.
China’s state-owned energy company Sinopec has started construction on what will be the world’s largest green hydrogen facility. When completed, it will produce 30,000 tons of green hydrogen each year. (At the moment, less than a million tons of low-carbon hydrogen is produced annually, and much of that is created using fossil fuels, with the resulting carbon then captured.)
Spain is also striding ahead with production and in 2020 unveiled its plans to become a major hydrogen producer. It set a target of producing 4 gigawatts of green hydrogen annually by 2030—but it has already surpassed this four times over and has plans for more production facilities.
Cost is still an issue. About 60 percent of the expense of green hydrogen is the cost of the renewable energy used to produce it, Percy says, so as renewable energy gets cheaper, hydrogen will too. The cost of the electrolyzer technology is another major component of hydrogen’s relatively high price, but Mowill says electrolyzers are becoming more efficient. There are also the logistics of storage, compression, and transportation, which further bump up the price of a molecule of green hydrogen.
But as hydrogen’s star rises, these costs will inevitably come down, Percy says. “If you look at what happened with solar, both solar and battery systems came down about 80 percent in about 10 years,” he says. He predicts the same will happen with hydrogen once it finds more solid technological ground. “The trials that are happening now are really important for the industry to learn from,” he says. “While it’s a pilot scale today, in five years’ time they’re likely to be ready for something bigger.”