Hydrogen’s Seven Missing Pieces – CleanTechnica

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I wrote another technoeconomic assessment of why hydrogen will not be cheap, and the reaction from hydrogen advocates was familiar. They focused on small pieces of the analysis and treated each point as if it existed in isolation. That pattern confirmed something important. The debate is not about one technology or one assumption. It is about whether people are willing to think in systems. Energy carriers succeed or fail because multiple conditions align at the same time. Hydrogen as a broad energy carrier needs many things to be true. The evidence shows that these conditions do not hold together.

A simple comparison from Laurent Segalen is a useful starting point. He often looks at the cost of a BTU of energy from hydrogen and compares it to the cost of a BTU from oil. Even in optimistic scenarios where hydrogen is assumed to be cheap, the cost per BTU is still multiples of oil, gas, or electricity. That comparison steps around the usual debates about electrolyzer designs or storage pathways. It reduces the question to basic energy value. Hydrogen starts with a disadvantage, and the rest of the system must compensate for that disadvantage. The next sections explain why the system cannot close that gap.

Hydrogen remains necessary in several industrial processes. Fertilizer, petrochemicals, and biofuels production depend on hydrogen today and will continue to depend on it, if at lower amounts. These sectors will need low-carbon hydrogen to meet climate goals. The argument here does not touch those uses. The argument is about whether hydrogen can become a common energy carrier for heating, transport, and power. To reach that position, seven separate conditions must all be true at the same time. Each one matters, and the chain breaks when any one fails.

The first condition is that electrolyzers must follow the same cost trajectory that made solar panels and batteries affordable. That would require rapid doubling of cumulative global output. Solar reached that scale because consumer markets drove demand into the hundreds of gigawatts. Batteries followed a similar path through consumer electronics and electric vehicles. Electrolyzers do not have anything close to that production volume. Their doubling rate is slow, their learnings per doubling much lower than solid-state solar panels or batteries, and their discounting rate mirrors that reality, a key point in the article which triggered reactions. Without rapid cost reduction in electrolyzers, hydrogen cannot become a cheap energy carrier.

The second condition is that electrolyzers must dominate capital costs so that falling stack prices have a major effect on the overall project. This is not the case. The stack is only one part of a complex system. Water purification, compression, cooling, storage handling, transformers, switchgear, and safety systems add large costs that do not fall with stack price reductions. These are commoditized components assembled into a major industrial facility. Even if electrolyzers become much cheaper, the total capital cost shifts only a small amount. Hydrogen cannot become a cheap energy carrier unless the stack is the largest cost component, and it is not.

The third condition is that curtailed renewable electricity must be available in the right places and in the right amounts. Hydrogen production only becomes low cost if it can run on near-zero-cost electricity for much of the time. Curtailment happens in remote areas or in parts of a grid that lack load and transmission. Industrial hydrogen demand exists in very different places. There is no easy way to match these two realities. Hydrogen cannot scale as an energy carrier unless electricity that is nearly free is both abundant and available near demand, and this does not occur.

The fourth condition is that hydrogen must be cheap to distribute. Production and demand are rarely in the same place, so cheap distribution is essential. Moving hydrogen by truck costs more than producing it. Building pipelines introduces leakage challenges, embrittlement problems, and steady compression costs. Even well managed pipelines deliver hydrogen at high cost compared to moving electrons or moving natural gas. Hydrogen cannot become a cheap energy carrier unless distance does not matter, and distance does matter.

The fifth condition is that hydrogen storage must be cheap and available in many places. Energy carriers must not only move energy across space but also move energy across time. Compressed hydrogen tanks are expensive. Liquid hydrogen storage is even more expensive and carries large energy losses. Chemical carriers add conversion steps and safety issues. Salt caverns are low cost but exist only in a few regions and often far from industry. Without low cost storage options, hydrogen cannot serve any of the roles expected of a broad energy carrier.

The sixth condition is that hydrogen demand must grow across heating, mobility, and industry so that pipelines and storage networks have enough throughput to be cost effective. Natural gas pipelines only made sense because homes, commercial buildings, power plants, and industry used the same fuel. Hydrogen does not have that demand profile. Trials of hydrogen home heating have been cancelled, and now over 60 independent studies find it has no cost competitive place in building heating. Arup’s safety efforts found that its explosive force potential is much higher than for natural gas, requiring large passive ventilation holes in any building that would use it. Hydrogen vehicles are in retreat even where they once had support, with even heavy fuel cell vehicles in China seeing a 45% drop in sales in the first nine months of this year. Battery electric buses dominate sales globally. Industrial heat is shifting to electric systems. Without major end uses, the pipeline backbone does not appear, and without the pipeline backbone, distribution costs stay high.

The seventh condition is that low cost renewable electricity must not be taken by higher value loads. Electricity has many uses with strong willingness to pay. Electric vehicles, heat pumps, data centers, industrial equipment, and battery chargers all outbid hydrogen producers. Hydrogen needs very low electricity costs to overcome its efficiency losses. As long as higher value loads take the lowest cost renewable electricity, hydrogen producers never gain the low electricity price needed to become competitive as an energy carrier.

Hydrogen plays an important role in several industries and will continue to do so, but that role does not make it a broad energy carrier. Seven conditions must line up for hydrogen to reach that position. These conditions do not align in the real world. Energy systems reward efficiency, scalability, low distribution cost, and strong end use demand. Electricity meets those tests. Hydrogen does not.