A new application of hydrogen is being deployed which is helping solve humanity’s ever-evolving energy woes. Traditionally, hydrogen has a large number of applications – used in everything from industrial products to food packaging. Ammonia used in fertilizer and industrial processes amounted to 160 million tons worldwide in 2011; hydrogen is a primary component in ammonia. The market demand for new, less expensive sources of hydrogen is driven heavily by fertilizer and manufacturing, however, a new market demand is emerging for hydrogen in another sector – energy. Power plants in Germany as well as Canada (using wind and natural gas, respectively) are today supplementing their primary electrical generators with advanced configurations of hydrogen technologies. These retrofits help the plants save money by smoothing supply, converting excess electricity generated into storable hydrogen gas which can be returned to electricity using a turbine generator or a fuel cell.
For natural gas fired plants, there exist huge expenses associated with starting the generators from stop – both from the amount of fuel it takes, and the time it takes to reach speed. To mitigate this concern, operators often continuously run their turbines regardless of demand for the electricity supplied therefore using fuel even though the electricity the plant generates is more than the plant will be paid for. Wind farms face a similar supply-demand problem, but while wind is free – unlike natural gas – the economics are still concerning for wind farm operators. Wind energy is often generated at times when there isn’t a demand for the electricity that is being produced (known as off-peak) and therefore there is an abundant supply of low cost, renewable energy that goes unused – and unpaid for. To cut costs and expand margins, the new hydrogen power plant strategy is simple; store extra electricity supply as high energy hydrogen gas, and deliver it later as electricity when it is demanded and revenue generating. In the last two years there has been a lot of public and private attention towards hydrogen technologies, especially in distributed generation and renewable hydrogen energy.
To be clear, hydrogen is an energy carrier not a source,as it doesn’t actually make energy – it needs the reaction with a catalyst and oxygen to release its contained energy, which often occurs in a fuel cell. Hydrogen is not naturally occurring anywhere on Earth like, say, oil or coal or even sunlight. Rather, hydrogen must be obtained from processes like electrolysis (running direct current through water to make H2) or reforming natural gas (which contains hydrogen.) Seeing as the former method demands energy usually derived from fossil fuel, and the latter is derived directly from a fossil fuel, it would seem that hydrogen isn’t a clean energy solution after all. Hydrogen produces only pure water when used for energy, but, if it takes carbon intensive fuels to make the hydrogen, then why explore it as a source of clean energy at all? Well, as there are many crayons in a box, there are also many sources of energy in the world and many don’t contain fossil fuels at all. Indeed, hydrogen can – and has been – created through electrolysis powered by clean energy, and more projects combining renewable energy and hydrogen are being developed right now.
In no industry are the benefits of supplemental hydrogen systems more apparent than for wind energy. Diminishing tax credits and subsidies have encouraged developers, operators and owners to explore new ways to increase margins on current and developing wind projects. Additionally, in the wind industry, everyone knows and fears the concept of ‘curtailment’ – the forced shutdown of renewable energy infrastructure by utilities or other PPA recipients. Curtailment occurs when the grid is overloaded by electrical supply, and utilities have contracts with suppliers other than renewable wind and solar. Therefore, when curtailment occurs, wind turbines and solar panels lay idle providing no energy to the grid even when there is wind or solar resource to be harvested. During curtailment, renewable energy operators’ assets sit and depreciate, generating little or no revenue. In certain regions, like Texas and Oklahoma, curtailment occurs as often as 50% of generating time.
A hydrogen based energy storage system provides operators of wind generation assets a solution to the issues of both 1) curtailment and 2) diminished returns from generating during off-peak hours. Storing less valuable energy generated in curtailment or off-peak periods, wind farm operators can return the energy to the grid in higher value on-peak times using a hydrogen fuel cell. The differences in tariff price written into wind farm PPAs is often considerable enough to consider storage, and many inherent characteristics of fuel cell technology make it a front runner for future energy storage projects.
In a commercial sense, the hydrogen debate has been gridlocked for years, without much attention in political and business agendas because of the perceived high costs of the technology. Today though, hugely innovative technologies and unique business models present a strong case for implementing hydrogen based energy storage – especially paired with intermittent renewable energy sources. Compared to alternate energy storage methods, hydrogen has real advantages that all consummate cost reduction and margin expansion.
For one, the cost of electrolyzers (what makes hydrogen from electricity) has decreased 25% in the last 10 years and new innovations in fuel cell technology have made the systems much more efficient. For perspective, average U.S. coal fire power plants are 40% efficient. In fact, the round-trip efficiency of hydrogen storage systems – ‘round-trip’ referring to the energy loop of electricity-to-hydrogen-to-electricity again – has reached 45% efficiency. Innovative electrolysis techniques have reduced the need for additional transformers so systems can adapt to the current and voltage of wind turbines and transmission facilities. This reduces capital cost for additional transformers and increases system efficiency due to the system losses associated with transformer technology. Finally, fuel cells are a much more suitable storage technology for grid applications because they provide a constant level of energy as opposed to alternative methods like batteries or compressed air which decrease in output over time.
Niche markets and more innovative regions appear to be fully embracing the potential of hydrogen. Germany has hydrogen power plants and a new transportation project building 50 new refueling stations to supply hydrogen powered vehicles. Hydrogen powered forklifts have increased in popularity dramatically, with large companies like Sysco switching their entire distribution fleet to hydrogen power because of the benefits over traditional systems. In the U.S., hydrogen buses are in operation in Austin, Birmingham, Cleveland and several other cities; there is also a large bus fleet in Reykjavik, Iceland where there is a vast supply of renewable energy to cheaply create hydrogen fuel. Hydrogen energy, it seems, is no longer an idyllic power solution but, rather, a market-based clean energy solution. In instances where electricity is plentiful and therefore cheap, hydrogen power is a viable option.
The demand for hydrogen is perhaps not as once predicted – talk of hydrogen powered automobiles has been discussed in academia for decades now. While hydrogen powered transportation is still a future goal, the immediate marketability of hydrogen energy is better suited for unique situations that call for clean, on-demand energy. The most clearly defined energy market for hydrogen is renewable energy operators looking for a long term solution to low off-peak and curtailment energy prices. In regions where transmission congestion and curtailment practices are commonplace, augmenting wind farms with efficient storage technology is a practical solution to maximizing revenue.
As costs continue to decline and hydrogen supply rises, other market applications like transportation will become more popular; major automobile OEM are already predicting this market transformation with a planned rollout of hydrogen fuel cell vehicles starting in 2014 from Mercedes Benz, BMW, Toyota, General Motors, Nissan, Honda, and Ford.
Market control by fossil fuels and business tendency of focusing on short term returns has prevented maximum innovation in renewable energy technology, but government and private equity supporting research has nonetheless advanced the hydrogen technology to its present marketability in the energy sector. Of course with the price of natural gas, innovations in coal gasification, and other energy storage options in research, the hydrogen industry must continue to innovate and improve. For now though, hydrogen has finally found a seat at the table.
[Editor’s note: Angstrom Advanced Inc. is a technology manufacturer based in Braintree, MA (US). The company specializes in designing and deploying residential, commercial, and industrial scale electrolyzers used for: renewable energy storage, industrial processing, transportation fuel, natural gas plant peaking, and distributed generation.]
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