Study on the viability of green hydrogen in the U.S.

“ABEI Energy and Rice University leads a market study on the viability of green hydrogen in the U.S. concluding on the potential of hydrogen sector as an essential alternative for the energy transition commitment”

There are a number of proposed roadmaps for the future of hydrogen and specifically green hydrogen. Long term success requires major investments from corporations, governments, and individuals which will need to agree on which path is most feasible and full adoption and adherence.  

Entire industries must agree on how new technology is rolled out and commit to hydrogen to get all the moving pieces to develop simultaneously and then in succession of one another in order to have the resources for the following stages.  

 

Figure 1: Roadmap for U.S. / Source: Cite Road map to a us hydrogen economy

Light-duty and medium-duty vehicles, material handling equipment are targeted first for development now, while implementation will occur in the 2023-2025 period as well as movements into heavier-duty trucks and finally buses and rail in the latter part of the decade.  

Starting in 2030 green hydrogen really starts to accelerate its growth potential and begins to penetrate hard-to-abate sectors such as refining, steel production, chemical productions and transportation.

Different initiatives are foreseen to promote this new technology:

Figure 2: Subsidies and incentives / Source: MBA students handover

Market drivers

Fuel cell and hydrogen energy are rapidly growing technologies, with Asia and the EU heavily investing in hydrogen-related industries as an energy source of the future.

  • The US is paving the way in the commercialization of hydrogen technology, with the greatest number of fuel cell electric vehicles (FCEVs) in the world1 representing half the global inventory.
  • In total, there are over 550 MW of installed or planned fuel-cells for stationary power in the US, several fuel cell and electrolyzer manufacturers, and multiple applications for hydrogen as a vehicle fuel.

Some states are looking at alternative supply to their grids during seasonal and weather-related issues, while others seek to decarbonize their gas grid possibly by blending hydrogen into their natural gas networks or using it as a feedstock. Still others are investigating ways to shore up vulnerable power grids, provide resiliency, or diversify risk.

  • The US market will remain fragmented, with individual states establishing their own policies and road maps for implementation. Central federal policies and guidelines will help give some direction.

Conclusions

A green hydrogen economy will emerge in the United States within the next 10-20 years. The main costs hindering hydrogen market entry are identified as the electricity price for renewables which is the largest driver of green hydrogen costs and the electrolyzer Capex which is the second largest driver

It is not profitable to produce green hydrogen without subsidies, etc. But subsidies are temporary, so it is important to watch for technology advances and/or opportunities to charge premium prices.

For transportation, the price of hydrogen is $14.00/kg and this is equivalent to $5.60/gallon of gasoline when adjust for efficiency.  Current price of gasoline in California is arround $2.86/gallon. The predictions conclude that through multiple incentives and policies already in place, prices of $8-10/kg could be achieved by 2025.

For combusted hydrogen it is shown that has a lower energy density than methane, so more much be burned for heating.  It does lower the carbon footprint.  As hydrogen costs come down and carbon emissions Cost go up, they predict blending will become more economical in the future.

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