Where should hydrogen be produced?

𝘚𝘩𝘰𝘶𝘭𝘥 𝘪𝘵 𝘣𝘦 𝘱𝘳𝘰𝘥𝘶𝘤𝘦𝘥 𝘢𝘵 𝘴𝘪𝘵𝘦 𝘧𝘰𝘳 𝘴𝘮𝘢𝘭𝘭-𝘮𝘦𝘥𝘪𝘶𝘮 𝘶𝘴𝘦 𝘤𝘢𝘴𝘦𝘴?

(See all my decarbonization posts – Net Zero by Narsi – from here – https://lnkd.in/gjrf59dk )

I have been working in climate tech for 15 years, and my work has touched almost every prominent energy/fuel domain.

Across all these, the 𝐩𝐫𝐨𝐝𝐮𝐜𝐭𝐢𝐨𝐧 𝐜𝐨𝐬𝐭 of fuel/energy dominates most other costs associated with it.

Even though we would like renewable energy to be produced in a distributed manner, closer to or at the user location, most renewable energy/fuels are produced at scale and transported some distance – biofuels, ground-mounted solar, wind power, biomass briquettes & pellets… the cost of transport (transmission, if it is electricity) usually is a small percentage of the total landed cost of energy. (in some cases such as loose biomass transport over long distances, these could be quite significant).

For green hydrogen, transport cost could play a far more important role if done on a small scale, and over road.

Hydrogen needs to be compressed or liquefied for transport, and enough safety precautions are needed at every stage of the transport & storage. There are many fixed cost components for these, making economies of scale play an outsized role.

I remember talking to an industry expert in India a few months back and he said that for small-volume road transport for some regions in India, the cost of transport of hydrogen could be 50%-100% that of its production. At the current green hydrogen production cost of $5/Kg – already expensive – that would imply a landed cost of $7.5-10/Kg – whew!

So, one question that has been hotly debated is: In cases where use is in small or medium volumes, should green hydrogen be produced at site of usage to minimize, or totally avoid, transportation?

This question, even if relevant, is an infeasibility for many other fuels owing to feedstock availability challenges. But for green hydrogen, all you need as inputs are water and green electricity – the former is available in most places, and the latter can be derived from rooftop solar or solar power despatched from off-site solar or wind power plants.

The question of hydrogen transport cost might be much less important for some forms of transport like pipeline transport where transport cost could be only a small fraction of production cost. But for some others, the topics of storage and transport are worth discussing because, for all its pedigree as a wonderful energy carrier, hydrogen has two intrinsic properties about which I don’t see what anyone can do anything: 𝐈𝐭 𝐢𝐬 𝐬𝐮𝐩𝐞𝐫 𝐥𝐢𝐠𝐡𝐭, 𝐚𝐧𝐝 𝐢𝐭 𝐢𝐬 𝐬𝐮𝐩𝐞𝐫 𝐟𝐥𝐚𝐦𝐦𝐚𝐛𝐥𝐞.

PS: One alternative could be to transport it not as hydrogen – convert it into something more easily transported such as ammonia, but this route has its own challenges, and we will consider this in a separate post.
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