Hydrogen, an energy carrier solution, is enjoying a resurgence among energy ecosystem and clean transportation stakeholders. Almost two decades ago, hydrogen was seen as the primary solution to ending reliance on fossil fuels at some point in the future, however the transition to hydrogen did not occur then because of the high cost of generating hydrogen from renewable energy sources. But today, a variety of governments and private sector vendors are experimenting with new applications for green and blue hydrogen. Though many of these efforts are focused on large-scale infrastructure plays, arguably the greatest innovation is occurring with smaller distribution systems applicable for microgrids, according to new research from Guidehouse Insights.
Declining costs and increased adoption of hydrogen technologies such as fuel cells, electrolyzers, and fuel cell vehicles have provided a platform for infrastructure development discussions. As electricity accounts for 70% of hydrogen production costs via electrolysis, the steep decline in solar PV and wind costs is enabling an emerging green hydrogen economy.
The conversation has shifted from whether hydrogen will play a role in decarbonization to how and when hydrogen will play a role. As hydrogen demand continues to be driven by policy, decarbonization goals, greater renewables integration, and decreasing renewable electricity costs, the demand for the necessary infrastructure will likely naturally follow, the report states.
Microgrids offer unique applications for distributed hydrogen but face barriers. Most microgrids are retrofits incorporating both fossil and renewable generation technologies and fuels. Increasingly, new microgrids also integrate some forms of energy storage (typically different kinds of batteries) while incorporating load management and EVs as a grid resource. This dynamic shapes future development strategies because microgrids lend themselves to incremental upgrades.
As of early 2021, more attention has been placed on large-scale infrastructure in the industrial sector — that is, plays that match the level of scale of offshore wind in Europe. Bigger is better for these scenarios to make economic sense. For microgrids — self-sustaining networks of distributed energy resources (DER) that can operate autonomously as a single controllable entity — such endeavors bear little in common with near-term opportunities. The majority of microgrids deploying distributed hydrogen systems as of early 2021 have been remote microgrids developed in locations where there is no traditional grid, let alone pipeline infrastructure for natural gas that could be repurposed for hydrogen, the report shows.
Earlier this year, Frost & Sullivan predicted that global green hydrogen production will skyrocket at a CAGR of 57% between 2019 and 2030, rising from 40,000 tons to 5.7 million tons. Increasing concerns about carbon emissionsand the need to decarbonize the industrial, commercial, transport, and power sectors have forced countries to reduce their dependency on fossil fuel-based systems and increase investments across alternate low-carbon technologies, including green hydrogen.
This article is reproduced at www.environmentalleader.com