Hydrogen continues to advance as a promising source in the global energy mix. I had a wide-ranging discussion with Emerson’s Martin Van Der Merwe as part of our Asia-Pacific Sustainability & Decarbonization podcast series to discuss the trends, challenges, and solutions for hydrogen as an energy carrier.
The discussion was wide-ranging, so I’ll include part 1 of our conversation today and part 2 a little later.
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Jim: Hi everyone. This is Jim Cahill with another “Emerson Automation Experts” podcast. We continue our Asia-Pacific Sustainability & Decarbonization podcast series with a closer look at hydrogen as an energy carrier and its growing role in the energy mix in this region. I am joined today by Emerson’s Martin Van Der Merwe to discuss hydrogen.
Martin: Hi Jim. Thanks for having me on.
Jim: Martin, it’s great to have you here with us. Let’s begin by asking you to share your background and path to your current role with our listeners.
Martin: Thanks Jim. Well, I completed two bachelor degrees in South Africa in the early 2000’s, one in electronic engineering and one in IT. Giving away my age, but back then the concept of a dual degree did not exist, but I could see how the two fields started merging so I went for it. After graduating I joined Emerson’s Local Business Partner and eventually moved to Australia in 2008 joining Emerson here as a project engineer. One of my first projects I got assigned was to implement the control system for a first-of-its-kind Carbon Capture pilot with the government research agency CSIRO. This was at a coal-fired power station in the Hunter region. So you could say I’ve been interested and involved in sustainability technologies from then on. I later moved into management roles, responsible for the service organization that supported our key clients in Australia and New Zealand, and until recently I managed the systems and software business unit here. In the last 4 years in that role I noticed a very significant move in our clients focus towards projects that support the global shift to improve sustainability and decarbonization. That shift prompted me to, just very recently, move into my current role where I support the Sustainability & Decarbonization business for Emerson Automation Solutions in the Asia Pacific region. So my new role aligns well with my passion and Emerson’s purpose, to help customers across the various industries in Asia, make measurable progress towards their Net zero targets.
Jim: That’s great Martin. So we are talking about Hydrogen specifically today and there seems to be a lot of talk about hydrogen and its potential. Perhaps you can start our discussion off by just explaining why Hydrogen is such a hot topic now?
Martin: Sure Jim. Hydrogen is indeed spoken about a lot recently. In fact looking at google trends, the interest in “green hydrogen” – this is hydrogen produced from water electrolysis using renewable energy such as wind & solar – its interest grew exponentially from Dec 2019 and remains at its peak now since Oct last year. Hydrogen certainly has a lot going for it. It is abundant in our universe and in its pure form, has a very high specific energy per unit of mass of 120 MJ/kg that is 2.6x better than gasoline and 2.3x better than natural gas, that’s why NASA uses Hydrogen to power space rockets.
But I think the most important reason why a hydrogen is gaining such momentum NOW, is the culmination of two trends we never experienced in the past so called “false starts for Hydrogen”
First, we have seen a dramatic drop in the cost of renewable power 82% for solar PV and 40% for onshore wind over the last decade according to IRENA. As renewable energy continues to reduce in cost, and fossil fuels become more costly to extract and process, the economic feasibility of hydrogen becomes more compelling. But there is another variable in the economics, which is the second unique trend; The push for Net-Zero emissions globally and an accepted cost associated with carbon emissions in the operations of every sector in society.
So these two unique market trends has enabled the beckoning of a hydrogen revolution.
Hydrogen’s potential as a zero-carbon energy carrier if produced from renewable energy is unmatched in its versatility – It can act as a battery to store excess energy, that energy can then be converted back to electrical energy using fuel cells or be combusted without any carbon emissions. This combustibility provides a great alternative for heating applications to replace fossil fuels in hard to abate end-uses. There are already many examples for hydrogens application in transportation using fuel cell EV and for heavy duty trucks, busses and even large haulage used in mining, but we also see rapid development of applications for iron and the manufacture green steel, and for the use of H2 directly in gas turbines to power planes and marine vessels and electricity generation. It is conceivable that Hydrogen could one day support all our consumer, transport, and manufacturing infrastructure energy needs – with no net carbon emitted.
But we are not there yet, there are significant R&D effort in all these sectors to support a transition to hydrogen – especially to improve production efficiency and cost as well as in end uses and application. Most governments are investing large amounts specifically in hydrogen technologies. Some reports estimate a $5tn investment is needed in hydrogen alone to achieve net zero by 2050.
So yes, everyone is talking hydrogen right now and it’s little wonder – it is a perfect fuel to support our current global energy needs and it is recognized by researchers, industry and governments as a critical segment in a suite of solutions to help the world achieve a lower carbon future. Just to be clear, I believe hydrogen will feature significantly in a energy mix that will include large scale electrification, biofuels and even some fossil fuel derivatives that are abated through carbon capture for example.
Jim: So you mentioned governments are recognizing the potential of hydrogen, can you elaborate on what countries in Asia are communicating as their strategies for Hydrogen?
Martin: You’re touching on a very interesting point Jim. Japan was really the first country globally to identify and publish its Basic Hydrogen Strategy back in 2017. Closely followed by detailed roadmaps and strategies from France in 2018 then Korea and Australia in 2019 and then a flurry of other countries since then. These roadmaps and strategies are essential to stimulate investment in hydrogen and provide commitments and a vision by these governments for hydrogen in their respective economies. Roadmaps are nice, but Jim I like to look at what are the real drivers for them to consider if they will deliver meaningful outcomes.
So when looking at these roadmaps it is very interesting when you compare and put them next to each other. You start to notice the emergence of an international trade market – some counties in the AP region like Japan, Korea and China’s strategies have a significant hydrogen importer requirement, while Australia and India have very clearly stated their ambition, in their strategy, to be hydrogen export powerhouses.
This supply and demand is really no different to today’s energy demand supply map in the region for say LNG, and that makes sense right? The only difference is that counties don’t need fossil fuel reserves they just need good solar irradiance and high constant wind speeds.
There are other parallels to the emergence of hydrogen and the Asian LNG market boom of the 80’s, when the oil price surged and industrial countries like Japan, Korea and Taiwan shifted to LNG. There was again strong intent and strategies declared by these countries to develop alternatives to oil and coal.
Today we again see fossil fuel prices at near record highs, largely due to the conflict in Europe and production levels struggling to keep up with demand. And strategies to develop alternatives to fossil fuels.
But there is a new variable this time around, as I hinted before, that is different to the LNG boom and that favors hydrogen, and that is the UN Climate Change COP countries and their commitments to global emissions reductions.
These commitments have been a big the driving force behind these government roadmaps and investments. Governments need to take this action not only to achieve their targets but the interconnected global market requires countries to support a global decarbonization thread.
We can already see the impact that the EU’s Carbon Border Adjustment Mechanism have on counties that rely on exporting their goods and materials to the EU. Having restricted trade or higher cost of exports will have a detrimental impact on their gross domestic product GDP. This cost to carbon emissions will be a benefit and driver for a faster renewable energy transition, including hydrogen.
Another point to mention about these roadmaps, is that they all include versions of what can be termed as hydrogen-hubs or clusters. These are areas where clean hydrogen can be produced and consumed within an industrial complex or manufacturing hub. These hubs are critical as it addresses the supply and demand equation. This is again similar to what we have today where refineries sit at the center of many industrial manufacturing complexes and there are many hydrogen production projects identified in Asia which aim transition these existing fossil-fuel dependent manufacturing hubs to low-carbon hydrogen hubs.
The roadmaps recognize, not only the need to transition, but increase energy resources aligned to each counties energy demand forecast based on population and middle class growth. In fact Asia’s electricity demand is expected to double by 2050 according to the latest IEA report so not only do we need hydrogen to support the transition of high-carbon energy networks, but also to augment the current energy supply to sustain the forecasted growth.
So to summarize the major AP countries have demonstrated an understanding of the impact and opportunity that a global energy transition represents and they have outlined their strategies and committed over $35bn in investment to deliver on their roadmaps. It’s going to be a busy few years to 2030 I think Jim!
Jim: It is clear from what you outlined that hydrogen is a viable energy carrier for the future and governments are investing in the region to ensure they participate in this new clean energy economy, what is holding it back then? And, what challenges are you seeing in the Asia region?
Martin: Yes Jim it all seems too good to be true. There are real challenges in this transition to hydrogen.
The first and obvious one is cost. Even with the significant drop in renewable energy cost to-date, green hydrogen is not competitive with fossil-fuel based alternatives of blue and grey hydrogen. Where grey hydrogen is typically being produced from natural gas using a process called Steam Methane Reforming, and Blue hydrogen being that grey hydrogen, with the associated carbon emissions captured and stored. It is widely accepted that a supply cost of US$1.5/kg for green hydrogen is needed to cross the cost barrier.
The recent Goldman Sachs Carbonomics report on Hydrogen does make a compelling case that this threshold is on the horizon. In particular the report looked at different hydrogen manufacturing locations and their associated levelized cost of energy. Their analysis considered a continued drop in the cost renewable energy, the reduction in the cost of electrolyzers and increase in cost of fossil-based fuels including the requirement carbon offsets. The result of their analysis proposes that green hydrogen could reach parity with grey hydrogen as early as 2025 in countries with low renewable energy costs and high natural gas prices, and by 2030 for countries with low renewable energy and gas prices.
This timeframe also aligns with current forecasts of when many announced projects will come online, significantly increasing global hydrogen production capacity to over 20GW by 2025 and 80GW by 2030, with around ¼ produced in Australia alone.
The second big challenge is the demand and application of hydrogen. Earlier we spoke about the versatility of hydrogen but today the demand for hydrogen is predominantly in traditional refining for hydrocracking and other chemical processes totaling only 70Mt per year.
To accelerate the demand for hydrogen, we need sectors that have a high energy demand and significant carbon footprint to transition to H2. Where companies in these sectors can co-locate their operations near H2 production facilities or share existing infrastructure, that is even better.
The early applications that will stimulate demand in this sweetspot are Fuel Cell vehicles, gas blending, methanol production and iron and green steel manufacturing. FCEV have been around since 2013, and Emerson technology with its TESCOM brand have been used in fuel cell applications for some time. I think you’ve had Nicholas Marti talk a bit about that on your podcasts so I would dwell on that. I would say though that thinking back to hydrogen’s superior energy to weight ratio, it is a great fit for trucks and busses, freight trains, planes and marine vehicles. These are vehicles where the use of batteries would negatively impact their freight carrying capacity. They also typically have depo locations where hydrogen refueling infrastructure could easily be co-located and produced to lower cost. Japan, Korea and China are leading the world with the number of active hydrogen refueling station’s of >270 (HRS) and rollout plans reaching over 1,500 by 2030, all backed with strong FCEV adoption incentives & policies.
In terms of gas blending, several trials and research projects across the world have shown that most existing natural gas pipelines can support up to 20% hydrogen blends with minor retrofit upgrades required. Emerson have been involved in many of these hydrogen injection skids. One project here in Australia was with ATCO’s Clean Energy Innovation Hub and they have some great video’s about the project and demonstration of blended hydrogen & natural gas. At 20% most downstream appliances, like your gas stovetop or gas ducted heating, don’t have to be upgraded. The biggest challenge relates to the actual pipeline materials and integrity which pipeline operators often need to upgrade or extend so the impact is minimized. Most countries with extensive gas networks, like the US, UK, India and Australia, and all have projects announced for hydrogen gas blending to various % by 2025.
Other challenges include the transportation of hydrogen, especially large volumes between countries. Hydrogen actually has a very low energy density, which makes it hard to transport in volume. Even in liquid form it’s energy density is less than 1/3 of LNG and at much lower temperatures of 253 deg C. At these low temperatures movement and management becomes very tricky but not insurmountable. In fact the first LH2 shipment from Australia arrived late Feb this year in Japan on the Suiso Frontier. Emerson again have technology and continue to develop products that will support LH2 production and transportation. An alternative to ship hydrogen is of course in the form of ammonia. Much more stable and easier to handle than LH2 but its drawback is the conversion cost to ammonia and back to hydrogen.
So several challenges exist Jim but with all of them there are solutions being developed and the learning rate is very high and here at Emerson we certainly see ourselves as partners to finding those solutions to overcome them.
-End of Part 1 Transcript-