Special Focus: Pathways for Sustainable H₂

R. BHAMIDIPATI, Victaulic, Houston, Texas

The rapid growth and deployment of H₂ generation projects for energy storage, decarbonization and clean energy initiatives are gaining momentum. This quest for clean energy production and storage will be ongoing for decades, as the energy transition focuses on long-term, larger-scale and clean fuel production and storage solutions. However, for this movement to truly take hold, the cost of production must be low enough to increase the investment in H₂ production technologies. 

Who is investing in green H₂? According to a recent industry report¹ from the globally led Hydrogen Council, there are more than 200 H₂ projects in the works, exceeding $300 B in total investment. Approximately $80 B of this investment comprises mature projects. More than 30 countries have released H₂ roadmaps, and governments worldwide have committed public funding in support of decarbonization through H₂ production technologies.

In support of these initiatives, large-scale partnerships are forming to build localized H₂ hubs for the emerging H₂ economy. The partners who are investing in green energy production in support of net-zero emissions targets include: 

• Global oil and gas companies
• Governments
• Power producers
• Equipment manufacturers
• Transportation firms.

One such initiative, the NEOM Project in Saudi Arabia, plans to produce 650 tpd of green H₂ via electrolysis powered by 100% renewable sources. Partnerships in Europe, Australia, North America, Asia and South America have also announced large-scale H₂ infrastructure development projects. 

The bridge to green H₂ production. Brown and gray H₂—produced from fossil fuels via steam methane reforming (SMR)—account for approximately 95% of global H₂ production. Blue H₂ is defined as SMR with carbon capture, utilization and storage (CCUS). The International Energy Agency (IEA) has said that H₂ production is responsible for roughly 830 MMtpy of carbon dioxide (CO₂) each year. The increased global focus on decarbonization goals may reduce future investments in the development of SMR, thereby impacting the production of brown and gray H₂. Presently, SMR will continue to remain as a primary H₂ production method, with added CCUS features allowing the CO₂ to be stored or utilized for industrial applications.

According to Frost & Sullivan, green H₂ accounts for less than 1% of total H₂ produced globally.² A bridge to green H₂ is needed, and blue H₂ will likely remain as that bridge. 

The power mix, and an increasing need for larger-scale energy storage. As the global power generation mix continues to grow toward wind and solar, long-term storage on a large scale is a crucial factor required to offset closures of coal, nuclear and other baseload assets. 

How can utilities best store large quantities (gigawatts or terawatts) of power for longer durations than battery energy storage systems (BESS) or other short-duration methods? Historically, there has been only one primary and proven means of storage—pumped energy storage (PES) with hydroelectric plants. Therefore, there is room for more large-scale projects, but these projects can take many years to permit and develop, often requiring billions of dollars to build, and can also be limited by geographic constraints. 

As history has shown with solar photovoltaic (PV) and wind technologies, when investments advance and technology use increases, then costs come down. The U.S. Energy Information Administration (EIA) has noted that 1) the cost of utility-scale battery storage in the U.S. fell almost 70% between 2015 and 2018, 2) projects from the U.S. National Renewable Energy Laboratory (NREL) have increased battery production, and 3) market competition will continue to drive costs down. The NREL also recently said that it sees mid-range costs for lithium-ion batteries falling another 45% by 2030. Similarly, several sources are predicting that costs related to electrolyzer technology will decrease by 60% or more by 2030. 

What will drive down green H₂ production capital costs? Although the cost of electrolyzer technology is expected to decrease over the next 10 yr, the current cost of generating green H₂ via electrolysis is significantly higher than that of natural gas production. So, what can be done to improve the economics of decarbonization? 

Two areas of focus to move green H₂ toward parity with other fuel and energy storage measures include: 

1. The cost of energy
2. Capital costs for H₂ plants.

The push toward economies of scale for green H₂ is driving innovation in H₂ production technologies, but that is not the only way to drive down costs. As a proven technology, electrolysis systems continue to grow rapidly in scale. These plants utilize conventional utility systems such as process water, high-purity water, cooling water, inert gas, instrument air and other process fluids, and can benefit from proven technologies and workflows to reduce total installed cost (TIC), enhance construction productivity and expedite construction schedules. These benefits can be realized while maintaining world-class safety, enhancing system reliability, and reducing the capital costs associated with the installation of electrolysis systems and the critical infrastructure powering these facilities. 

Based on virtual design concepts and advanced work packaging approaches, concepts like prefabrication and modularization contribute to the speed and certainty of construction projects and address the challenges associated with shrinking skilled labor and variations in the construction process. Owners and developers, as well as engineering, procurement and construction (EPC) firms, can rely on the expertise of proven technology partners and net-zero construction methods to achieve project certainty and reduce TICs. 

From planning and construction through production and maintenance, reducing the capital costs associated with green H₂ production requires the industry to adopt best practices from other industrial construction markets. 

Proven construction best practices from the power, mining, oil and gas, and infrastructure industries include: 

• Lean construction
• Upfront manufacturer expertise to improve plant optimization
• Offsite fabrication and modularization
• Simplified material handling
• Onsite module installation.

These proven approaches, standardized processes and reliable system solutions within the emerging green H₂ industry are driving improvements in productivity, efficiency and quality. However, this different way of thinking requires a higher level of coordination among owners, engineers, EPC firms and suppliers.H₂T 

LITERATURE CITED

¹ Hydrogen Council and McKinsey & Company, “Hydrogen Insights: A perspective on hydrogen investment, market development and cost competitiveness,” February 2021, online: https://hydrogencouncil.com/wp-content/uploads/2021/02/Hydrogen-Insights-2021.pdf 

² Frost & Sullivan, “Global green hydrogen production set to reach 5.7 million tons by 2030, powered by decarbonization,” January 19, 2021, online: https://www.prnewswire.com/in/news-releases/global-green-hydrogen-production-set-to-reach-5-7-million-tons-by-2030-powered-by-decarbonization-843908562.html#:~:text=Currently%2C%20green%20hydrogen%20accounts%20for,to%20handle%20production%20and%20delivery.%22

RAVI BHAMIDIPATI is the Vice President of Global Oil, Gas & Chemicals at Victaulic. He has more than 25 yr of experience cultivating strategic partnerships and implementing business development strategies for global engineering and technology licensing companies in the oil and gas sector. He is dedicated to engineering solutions that mitigate safety risks and maximize construction productivity on capital projects, including green H₂ and carbon capture projects.