Image Credit: Matti Blume [@CC-BY-SA 4.0 Matti Blume] via Euractiv
This is a guest post by David K. David worked in the oil industry for many years in the Middle East, Europe, Asia and New Zealand.
Will hydrogen technology be a useful part of New Zealand’s climate response? Is it a potential export commodity?
Earlier this month, Prime Minister Jacinda Ardern mentioned hydrogen in a speech about the future. Business Desk reported:
The government wanted to “ensure New Zealand is well-positioned to produce green hydrogen at scale and exploit this economic opportunity”, said Ardern, who also focused on reducing the country’s long-term reliance on fossil fuels as a way to “control and protect our economic future”….
Ardern said its versatility, low weight and wide range of uses could make it a particularly valuable and sought after export commodity NZ was “uniquely placed” to produce.
While hydrogen may well turn out to have a niche role internationally in long distance heavy transport, in my view it will not be a major contributor. Nor do I believe it can be an export opportunity for New Zealand.
On Earth, hydrogen exists in enormous quantities but always in combination with other elements. One of the more common is water – one oxygen atom bound to two hydrogen atoms – which forms our oceans, clouds, rain, snow, ice and rivers. It is an extremely stable molecule, which is why any hydrogen gas produced by nature (or used in a vehicle) immediately combines with oxygen to form water. Reversing this reaction by splitting water using electricity is possible, but it takes a tremendous amount of electricity.
The proposal to use green electricity to split water in New Zealand would need to satisfy the following three requirements:
a) The use of electricity to produce hydrogen for transport must be more efficient than using electricity in electric vehicles directly.
b) The use of electricity to produce hydrogen for transport must make more economic sense than using that electricity for other purposes.
c) To export hydrogen, there must be an international traded market for hydrogen. Currently, there is not.
Hydrogen for Transport
The huge amount of electricity required to split water into hydrogen and oxygen means powering a car with hydrogen is about one third as efficient as using the electricity directly in an electric car. The hydrogen route is also very much more expensive.
Hydrogen can be burnt directly as a fuel or used in a fuel cell to produce electricity to drive a conventional motor.
Using hydrogen directly has some safety issues and requires high pressure storage and highly engineered fittings. For this reason, most hydrogen vehicle research and development has focused on hydrogen for fuel cells. Most car companies have now abandoned this path as being around five or six times as expensive through the life cycle compared to electric batteries. A quick internet search will show a few public council examples of early adopters of hydrogen buses moving to electric after experiencing prohibitive costs. The laws of physics are unlikely to change so this barrier will remain.
New Zealand’s Future Sources of Green Energy
While New Zealand’s electricity generating capacity at present is about 86% renewable, the balance is produced by hydrocarbons. However, the future demand for electric power will be immense. Electric vehicles, data hubs and natural growth will require a huge investment in renewable generation. Even if Tiwai Point closes, New Zealand will need a lot more green energy to meet these future demands in a climate friendly future. With one proposed exception (Lake Onslow NZ Battery), major hydro schemes are not possible, and nuclear is not a good fit for New Zealand. The options are therefore geothermal, wind and solar, with supplementary biofuel, plus more efficient use of the electricity produced. This has been well set out by the Climate Commission and many others.
The principal point here is with the unavoidable demands on the green fraction of energy in our known future, the energy for any additional large consumer such as green hydrogen electrolysis doesn’t exist now, has to be separately constructed and needs to justify its place on climate change and/or economic grounds. The major power generators and Transpower have some investment proposals, but even if Tiwai Point closes, the green electricity available will all be needed elsewhere.
Export Hydrogen: Why is There Such a Lot of Noise About Hydrogen Lately?
At present hydrogen is almost exclusively produced by the oil and petrochemicals industry for their internal use. They use a cheaper, but still very expensive, process which splits methane into hydrogen and CO2.
This is obviously not compatible with climate change ambitions. Why would the major industries want to pivot this way, given hydrogen can’t compete with electricity on efficiency grounds, for most vehicles?
Part of the answer is that hydrogen may have a role in decarbonizing the steel, cement and fertilizer industries. Also, due to the weight of the batteries required, electricity hasn’t been a solution for long distance air travel or heavy long-distance trucks. Hydrogen fuel cells are lighter and are a potential solution for the heavy transport problem.
Therefore the oil/petrochemicals industries are attempting to set up hydrogen hubs in places like Europe to convert heavy transport and assist with decarbonizing steel and cement production. There would be big environmental benefits if they succeed.
However, all the oil/petrochemical companies currently make their own hydrogen as close as possible to where it’s consumed, normally within just a few metres. Why?
Some more science
Hydrogen is the smallest molecule found in nature, which gives it unique properties. It’s a very low-density gas so needs to be stored at high pressures; think dive bottles not petrol tanks. It can easily burrow through steel and other containers, so they need to be thick. And therefore, heavy. If it escapes it ignites easily and burns with a colourless flame. This all makes hydrogen very costly and hazardous to move around, and more economic not to. Although the handling and storage challenges are solvable, the hazards mean it is unlikely to ever be suitable for the general public to use directly.
For all these reasons of handling and economics, hydrogen trading doesn’t exist at present.
This point is worth repeating – no hydrogen trading, long distance transport or export system exists anywhere today. The oil companies and others have the resources and the motive and are moving as fast as possible to set one up, but it will certainly take years and huge amounts of money to do so. Even then, it will probably only be viable in the next decade in dense industrial areas in Europe, North America and China. Hydrogen will be manufactured where the cheapest excess green (including nuclear) energy is available, or it will be manufactured close to the consumer, where the transport efficiency penalty is least.
To go from that to a fully international trading infrastructure will take more years and much bullion.
And once it’s finally in place, who would our customers be? Australia could more easily produce green hydrogen using vast solar resources. All the big transport, steel and cement consumers are in the northern hemisphere and shipping costs would be prohibitive.
Meanwhile, Battery Technology Keeps Improving
It’s also worth noting that the transport part of the hydrogen vision may be overtaken at any time by a breakthrough development in low weight battery technology. Already, an electric bus has been driven from Auckland to Wellington with only one 2.5 hour charge mid-way.
Since hydrogen burns to water, what’s not to like? Well, quite a lot. But it seems that consultants can make a lot of money pushing this New Sensation.
The sensible strategy for New Zealand is to focus our limited resources on what really makes a difference.
If our problem is climate change then green electricity should be used to directly power electric vehicles (while also reducing the demand for vehicle travel).
If our problem is wanting to develop a new profitable export industry, then based on these arguments, green hydrogen is not it. For those old enough to remember Muldoon’s Think Big, this has a sense of déjà vu all over again…