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Will the Hydrogen Economy Take Off?

Hydrogen is hot, but whether it really will fly is another story.
Fortnightly Magazine - July 1 2003

between the price of natural gas and hydrogen won't cross for at least 15 years. But should the current upward price pressure on natural gas continue, that may change. "If we assume natural gas prices stay the same, it's going to be a while before hydrogen is as cheap as natural gas is now. But if there's a big shortage of natural gas and prices increase, then we could see [a shift to hydrogen] sooner," says Scheer.

In addition to supplying the natural gas to make hydrogen, natural gas companies could well develop a role in transporting or storing hydrogen. Figuring out how to store hydrogen is one of the three biggest hurdles to get across to make the hydrogen economy a reality, according to Scheer. "Storage is the most onerous, difficult technical question facing the hydrogen economy," he says. "It may be the toughest problem to solve."

The pressure to reduce power plant emissions may pave the way for hydrogen to enter the power stream, albeit through a bit of a back door. Small amounts of hydrogen, when mixed with natural gas during combustion, can lower NO X emissions. For utilities in non-attainment areas, a hydrogren/natural gas mix can lower NO X emissions enough to come into compliance without the need to install selective catalytic reduction equipment, which is more expensive than using hydrogen as part of the fuel mix, according to Navigant's Walls.

Megawatts Are Megawatts

If the upward pressure on natural gas prices continues, electrolysis could become a rival to natural gas reformation for hydrogen production, or indeed could become the next step in the transformation to a hydrogen economy. And should that occur, Taub says, electric utilities stand to benefit in the same manner as gas utilities would from a hydrogen economy.

A core question to ask, before thinking about using electricity to produce hydrogen, is whether there is enough cheap excess generating capacity to do so, Rastler says. He sees hydrogen production as most likely to be powered by natural gas reformation and off-peak power electrolysis.

Fundamentally, using electrolysis for hydrogen production translates into more power down the same wires-in other words, more demand for megawatts.

Electric utilities could become hydrogen production facilities, and possibly get into the business of storing and transporting hydrogen too, according to Taub. Regardless of whether there is central production of hydrogen, or whether electrolysis is performed on a more distributed basis, electric utilities stand to benefit from the increased demand for megawatts if electrolysis becomes the method of choice for producing hydrogen.

The Holy Grail of Hydrogen

Scheer calls the development of durable, reliable, and affordable fuel cells one of the top three barriers to moving to a hydrogen economy. While he is not one who thinks that a hydrogen economy cannot exist without fuel cells-"we could burn hydrogen in turbines and engines"-he concedes that a true hydrogen economy without fuel cells would be tough to envision. "It's not likely to have the Holy Grail of a hydrogen economy with hydrogen replacing everything else, unless you've got fuel cells," Scheer posits.