Digital Technologies
R. BECK, AspenTech, Boston, Massachusetts
There is significant interest and a corresponding level of innovation activity in the key opportunity areas of the hydrogen (H2) economy. These opportunity areas include green and low-carbon H2 production, storage and delivery to market, carrier fluids and end uses (e.g., fuel cells and H2/natural gas mixtures). These areas of opportunity are driving major investments in the sector as well as global capital project activity. However, hurdles persist.
In his recent book on climate solutions and breakthroughs, Bill Gates talks about the “green premium.”1 In other words, the world must pay more for green energy, and the extra cost must be eliminated. Gates argued that through trillions of dollars of investments, innovation and breakthroughs will accelerate, reducing and eliminating the green premium. For H2, those levels of investment are expected. Today, H2 activity is being jump-started through government incentives, favorable regulations, taxes and research subsidies. The U.S. Department of Energy (DOE), through the Inflation Reduction Act, is providing multiple billions towards moving green H2 toward economic parity as an energy source.
According to a report by McKinsey and Company, H2 is expected to account for 20% of global carbon abatement by 2050.2 According to a May 2022 analysis by H2Tech, there are 930 H2 projects globally, 47 of which the Hydrogen Council calls giga-scale projects. Today, the world’s H2 production is approximately 100 MM metric tpy. The majority is for captive use in refining and chemical processes. The World Bank projects the number will grow by more than 9%/yr through 2030, with global H2 production reaching 500 metric MMtpy–680 metric MMtpy by 2050.3
This sounds good, but why are some of the largest initiatives developing so slowly? As long ago as 2003, the U.S. and Europe agreed to collaborate on accelerating the H2 economy, but it is finally becoming a reality. What are the remaining hurdles to scaling up the global H2 value chain and realizing the projects from the World Bank, Hydrogen Council, International Energy Agency, McKinsey and others?
The biggest hurdles are the economics of H2 production, delivery and use. According to the International Renewable Energy Agency (IRENA), H2 energy is 2–3 times more expensive than fossil energy (not counting the carbon cost), and H2 pipelines are 10%–50% more expensive than natural gas and oil pipelines.4
Digital technologies will provide the magic bullet that will level the playing field, and it can do so quickly for the players who embrace it. The author’s company has developed a sustainability pathway for the H2 economy that makes the key digital technologies easy to adopt for supporting the innovation, execution and scaling of H2 projects across the value chain, from renewables to H2 production to storage and delivery of H2 to end use (FIG. 1).
Six steps to adopting digital technology in the H2 economy are discussed here:
For H2, digital twin feedback will be crucial in the expected progressive implementation strategy. Digital twins provide uniquely accurate and complete modeling approaches for green and blue H2 (electrolysis, reforming, ammonia production and associated carbon capture). The author’s company is working with Emerson Electric to link its rigorous models with Emerson’s operator training (OTS) digital twin and augmented reality operator training, which will accelerate training and H2 startup projects. Air Products has published a case study describing the use of digital twin models across its network of H2 plants and pipelines throughout the U.S. Gulf Coast. That case study documents more than $1 MM/yr in operation cost reduction, as measured in one of the 15 plants managed with the help of these models.
Takeaway. Digital technology is already—and will continue to be—a strategic element in reducing cost across the H2 value chain, accelerating the scaling and speed of implementation, and ensuring the safety and reliability of H2 solutions. Discussions and workshops between organizations are necessary to accelerate efforts and opportunities in the H2 market.H2T
Notes
a AspenTech OSI Continua
b Aspen Unified PIMS
LITERATURE CITED
1 Gates, B., “How to avoid a climate disaster,” Alfred A. Knopf, 2021.
2 McKinsey and Company, “Hydrogen’s potential in the net-zero transition,” May 2023, online: https://www.mckinsey.com/~/media/mckinsey/email/rethink/2023/05/2023-05-10d.html#:~:text=Our%20work%20with%20the%20Hydrogen,a%20%24460%20billion%20investment%20gap
3 World Bank, “Green hydrogen: A key investment for the energy transition,” June 2022, online: https://blogs.worldbank.org/ppps/green-hydrogen-key-investment-energy-transition#:~:text=The%20demand%20for%20hydrogen%20reached,680%20million%20MT%20by%202050
4 IRENA, “Hydrogen,” 2022, online: https://www.irena.org/Energy-Transition/Technology/Hydrogen#:~:text=Hydrogen%20is%20produced%20on%20a,of%20a%20mix%20of%20gases
5 U.S. White House, “Hydrogen economy fact sheet,” June 2003, online: https://georgewbush-whitehouse.archives.gov/news/releases/2003/06/20030625-6.html
About the author
RON BECK is the Senior Director of Solutions Marketing at Aspen Technology. He works with global energy and chemical companies on digitalizing sustainability and decarbonization pathways. Beck has more than 40 yr of experience in the intersection of the energy industry, digital technology and environmental science. His work in sustainability and energy security goes back to the first U.S. energy crisis in 1973 and 1974 when he was involved in the U.S. DOE strategy work and innovation, including conducting one of the first economic studies of wind energy, waste conversion through pyrolysis and new approaches to enhanced oil recovery.