Today, the world is facing one of the most critical problems i.e. global warming caused by excessive use of fossil fuels as source of energy. Carbon di oxide (CO2), the major greenhouse gas, is released into atmosphere when fossil fuels are burnt to produce energy. The greenhouse gases lead to global warming. Today, 37 billion tonnes of CO2 is emitted from energy related use of fossil fuels. Together with other greenhouse gases including Methane, total energy related greenhouse gas emission amounts to 41 billion tonnes of CO2 equivalent. Global warming level at present is 1.2 degree Celsius relative to pre-industrial levels, which is likely to increase to 1.5 degree Celsius in 2030. Paris Climate Agreement has set a target to limit global warming to well below 2 degree Celsius and preferably 1.5 degree Celsius relative to pre-industrial levels. If global warming has to be limited to 1.5 degree Celsius after 2030, CO2 emission will have to be reduced from present level eventually leading to net zero CO2 emission by 2050.
At present, global energy-mix is predominantly fossil fuels based wherein fossil fuels (oil, coal and natural gas) constitute approximately 80% of primary energy sources and non-fossil fuels (solar, wind, hydroelectric, nuclear and bioenergy) just about 20%. If net zero emission has to be achieved by 2050, the share of fossil fuels in primary energy-mix has to be reduced to just over 20% and non-fossil fuels just under 80% by then. Even such use of fossil fuels shall be accompanied with carbon reduction method known as carbon capture utilization and storage (CCUS) as much as possible.
Low-carbon hydrogen can play a significant role in CO2 emission reduction and hence achieving net zero emission by 2050. It is likely to account for 6% of total final energy consumption in 2050. It’s potential application as source of energy will be in transportation sector, industries and residential and commercial buildings. To that extent, low-carbon hydrogen shall replace fossil fuels and hence contribute to CO2 emission reduction. In industrial applications, it has potential to replace natural gas and coal. It can replace natural gas or coal in chemical industries such as ammonia and methanol, refineries and steel industry. In transportation sector, it has potential to replace natural gas and oil. In residential and commercial buildings, it can replace oil and natural gas in heating applications.
Low carbon hydrogen can be produced in two ways. One, from natural gas by steam reforming process using CCUS technology. The hydrogen produced by this method is usually called blue hydrogen. Two, by electrolysis of water using electricity produced from renewable energy sources such as solar, wind, hydroelectric, etc. The hydrogen produced in this process is commonly known as green hydrogen.
Choice of blue hydrogen or green hydrogen depends upon the cost competitiveness of one vis-à-vis other. While cost of production of blue hydrogen majorly depends upon natural gas price, cost of production of green hydrogen is largely influenced by renewable electricity cost and electrolyzer cost. As per International Energy Agency (IEA), at a natural gas price of USD 10 per million BTU, levelized cost of production of blue hydrogen is USD 2.5-3.0 per kg. On the other hand, levelized cost of production of green hydrogen is in the range of USD 3-4.5 per kg depending upon the renewable electricity cost and electrolyzer cost. Lower end of the range is applicable in the markets where solar or wind electricity cost is less and electrolyzers are cheaper such as China. The higher end is applicable in the markets such as Europe where renewable electricity and electrolyzers are relatively costlier. In between are the markets such as middle east where renewable electricity cost and electrolyzer cost are in between the two extreme ends.
It’s due to technology and cost constraints that the share of low-carbon hydrogen (green or blue) in total hydrogen production is still negligible. Today, approximately 95 million tonnes per annum (MMTPA) hydrogen is produced globally, out of which only 0.7 MMTPA is blue hydrogen and under 0.1 MMTPA is green, remaining all i.e. 99% is conventional hydrogen whose production involves high CO2 emission. The cost of production of conventional hydrogen i.e. hydrogen from natural gas by steam reforming process without CCUS (also sometimes called grey hydrogen) is significantly less than that of blue hydrogen or green hydrogen. However, with technological developments and electrolyzer manufacturing reaching the scale capacity, cost of production of green hydrogen is expected to come down in future-to USD 1.5 per kg by 2030 and USD 1.0 per kg by 2050 potentially making it competitive vis-à-vis blue hydrogen.
About Author: Satyendra Kumar Singh, B.Tech. (Chemical Technology) + M.B.A., is proprietor of Satsha Management Services-an award winning design engineering and management consulting company (www.satshamanagement.com). He possesses approximately 30 years’ experience in engineering consultancy in process and energy industries. Satyendra has authored several papers on energy, business and management, which have been published in some renowned journals/magazines such as ‘Chemical Engineering’, ‘Process Worldwide’, ‘Modern Manufacturing India’. He may be reached at satyendra.singh@satshamanagement.com, Ph. +919811293605.
