Green Hydrogen’s Future is Starting Now: Resiliency and Sustainability in Impact Investing

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Posted by: Christian Tasser Category: Environment, Impact Investing

Green Hydrogen’s Future is Starting Now: Resiliency and Sustainability in Impact Investing

We live in a time where it is crucial to find alternative green sources of energy, and nations around the world are aiming to achieve net zero carbon emissions in the near future. Green Hydrogen has the potential to be key in the decarbonization process of the world’s economies.

What is Green Hydrogen?

Green hydrogen is generated from renewable power sources. An electrolyzer uses electricity to split water into hydrogen and oxygen. If that electricity comes from renewable sources like hydropower, wind turbines, or solar this process releases no greenhouse gases. Factories, power plants, and even jet aircraft can then be powered with green hydrogen emitting no carbon. With the cost of solar projects significantly reduced in recent years, the International Energy Agency forecasts that electrolyzer technology will significantly reduce costs, key to the green hydrogen economy. The cost of electrolyzers to produce hydrogen has been reduced significantly in recent years, and the technology continues to be further optimized, with costs targeted to drop by 70 percent. To help drive this cost reduction, in October 2021 the Department of Energy announced its Hydrogen Shot initiative to reduce the cost of green hydrogen to $1 per kilogram by the end of the decade.

Two years ago, the German American Business Association in Southern California held a networking event highlighting the opportunity to use green hydrogen in the transportation and stationary energy sectors. A new method of storing hydrogen in the solid state was featured by GKN Hydrogen with showcase projects in the Italian Alps, including seasonal energy storage at an off-grid mountain chalet. In storing hydrogen with metal-hydrides, the hydrogen atoms are chemically bound with metal powders and released on demand by controlling the temperature resulting in the safest way to store hydrogen.

A year later, the California Energy Commission awarded funding to GKN Hydrogen for a demonstration project in the desert of California at a renewable energy microgrid showcasing the production of green hydrogen generated from onsite solar. The hydrogen is safely stored until needed (from hours to months) in the metal hydride storage and returned to electricity using an onboard fuel cell acting as an energy storage system and superior to lithium-ion batteries for long-duration energy storage applications.

Green Hydrogen Hotspot

At a site of a former dairy farm in the California desert with 2.2 MW of onsite solar panels, a renewable energy microgrid is growing. With landscape familiar to offroad enthusiasts making their way to California’s famous El Mirage dry lakebed, researchers are gathering equipment to support research and advance green hydrogen production.

Another sustainable method to produce renewable hydrogen is using renewable methane sources such as biogas produced from the biodegradation of manure or other types of organic waste – the hydrogen produced is converted into high-purity hydrogen after appropriate purification and enrichment steps. In this renewable microgrid location in the California desert, the California Energy Commission awarded Technology and Investment Solutions and the University of Southern California project funding to demonstrate the technology to convert biogas from food waste to green hydrogen at an average cost of below $2 per kg. Professor Tsotsis from USC and his team have been testing over the last five years at this site technology to efficiently convert renewable biogas into hydrogen.

The site is also the deployment site for another California Energy Commission-awarded demonstration project showcasing the production of green hydrogen generated from onsite solar using GKN Hydrogen’s system that integrates an electrolyzer with safe and compact hydrogen storage using metal hydrides and a fuel cell. This integrated system behaves like a fully autonomous energy storage system to help this isolated site manage its electricity demand and support the green hydrogen development projects.

Why is this energy sector transformation happening now?

At a renewable gas conference in 2019, a former oil & gas executive stated that “hydrogen will always be the fuel of the future” we now see the irony of this perspective. Many recognize and articulate the course and imminent adoption of green hydrogen across all sectors of our economy. This vision is articulated in ‘Hydrogen Revolution, a book by Marco Alvera, the time CEO of the Italian gas group Snam. This vision is shared by Bill Gates in “How to Avoid Climate Disaster,” which sends the vital message that hydrogen is the best method to decarbonize large industries that cannot be electrified, such as cement production. One of the key reasons is that renewable hydrogen production costs continue to decrease dramatically, new funding sources, incentives, and new and improved technologies are all becoming available, and it’s apparent the adoption of green hydrogen is accelerating.

Electrification of the energy and power sectors is a key competitor. However, not everything should and can be electrified. Elon Musk may be correct that electric cars and light trucks make the most sense to be electric. But heavy trucks, maritime and heavy industry heating demands, presently met with natural gas, will be challenging to electrify but can readily be fueled by green hydrogen without emitting carbon.

With the advent of affordable solar power in the sunny regions of California and the Southwest, excess generation is presently becoming a critical technical challenge. Long-duration energy storage is a must to avoid curtailment of this abundant renewable energy, and here green hydrogen can play an important role. The use of novel metal hydride technology for hydrogen storage shows a significant advantage in utilizing intermittent and excess renewables and matching the energy supply to demand.

To help accomplish this at the grid scale, GKN Hydrogen is currently deploying the most extensive commercial metal hydride hydrogen storage system at the National Renewable Energy Laboratory (NREL) along with industrial partner SoCalGas Co. This project is funded with a $1.7M award by the Department of Energy (DOE). The project will integrate metal hydride hydrogen storage with a megawatt-scale electrolyzer and fuel cell at a renewable microgrid, demonstrating the value of large-scale green hydrogen production, storage, and conversion to electricity to balance intermittent renewables to better match the grid load. Alan Lang, from GKN Hydrogen, said on the project, “It is a great step forward to demonstrate hydrogen at scale. The project will enable us and our partner, SoCalGas, to run real-world use cases to build confidence that hydrogen solutions are feasible and viable from an economic standpoint.”

Investments in the new energy sectors are leading the way to a quicker transformation by impacting the deployment of clean technologies. As an example, Vanguard Renewables, a producer of renewable methane from organic waste and manure, was recently acquired for $750 million by BlackRock.

This is strong evidence that large institutional investors recognize the value of these clean energy technologies and the increasingly urgent need to help decarbonize the economy. Experts in this critical subject include Christian Tasser of Carollo Engineers, Theo Tsotsis of the University of Southern California, and Alan Lang of GKN Hydrogen.

Other Signs of the Green Hydrogen Revolution

The adoption and deployment of green hydrogen are accelerating, as evidenced by some of the other significant developments and announcements, including The Department of Energy (DOE) announcing a funding opportunity to provide funding to create four regional hydrogen hubs in regions of the USA integrating hydrogen production and utilization.  Many states are working to secure this funding and are well-positioned to reduce the emissions of their energy sector on the way to zero.

Italian Gas giant Snam has established a net zero goal by 2040 and is evaluating the conversion of natural gas pipelines in Italy to carry hydrogen from the North African desert into Italy and Germany, providing affordable and accessible green hydrogen to these regions.

The replacement of natural gas with biogas is increasingly being implemented in many parts of the industrial world. The success of technologies to convert biogas into hydrogen, like the one pursued by the California Energy Commission, Technology and Investment Solutions, and the University of Southern California, are destined to accelerate such a conversion.

Hydrogen will also fill the gap where organic material waste cannot be fully converted to biogas. The sources of hydrogen may include the gasification of woody biomass and green hydrogen from solar to help fill this gap. The future of green hydrogen is NOW.

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