While hopes for hydrogen as a major energy carrier go back decades, a new generation of hydrogen plans are now coming forth from companies, industry groups and countries. The EU’s ambitious plan for hydrogen is complemented by a growing number of national and regional plans in Europe, Asia and elsewhere. The remarkable number of hydrogen plans around the world indicate that a significant threshold has been reached. They cover an extensive range of applications. But they share a perspective that sees hydrogen as an indispensable energy intermediary in a future 0-carbon economy, one that carries the power of renewable solar and wind sources to diverse end uses.
Intrinsic in the plans are two basic geographical arrangements. One is dispersed, with hydrogen becoming a fuel for buildings, heating homes and businesses, and a fuel for cars and trucks in a network of hydrogen refueling stations. The other is concentrated, in industrial centers and ports, where hydrogen and hydrogen-derived fuels are produced to supply nearby industries, power plants and freight shipping.
Of the two arrangements, hydrogen in industry clusters appears to be best positioned to succeed in the next decade. It is already there, where industries requiring high energy intensities in their operations use ‘gray hydrogen’ derived from natural gas. Many plans call for transitioning first to ‘blue hydrogen’ derived from fossil fuels with carbon capture and storage (CCS) systems, then to ‘green hydrogen’ derived solely from renewable energy sources.
Rather than in widely distributed networks of hydrogen and hydrogen-based heating and fuel stations, where it will face strong competition from direct electrification, the advantage may well be with industrial concentration where hydrogen can meet unique needs and quickly achieve economies of scale.
Highlighting hydrogen hubs
While the major energy agencies advocate comprehensive public policy that supports a full range of uses for hydrogen – what might be called an ‘all of the above’ approach – they see advantages in concentration.
In its recently published report Green Hydrogen: A guide to policy making, the International Renewable Energy Agency (IRENA) places a strong emphasis on industrial clusters, ports and cities where synergies among producers and users can arise. It is here that electrolytic production of hydrogen on a large-scale can reduce costs, thereby encouraging demand among local industries and further enabling production to expand.
IRENA identifies such places as settings where public policy will find the highest value applications of clean hydrogen. They should offer larger economies of scale to lift clean hydrogen and hydrogen-based fuels into viable commercial use in the next decade. IRENA sees development of ‘hydrogen valleys’ (e.g. cities) and ‘hydrogen hubs’ (e.g. ports) in stages beginning with the building of basic infrastructure. Its report states, “Transparent plans and timelines for hydrogen network backbones, storage, fueling stations and port infrastructure can be useful at the early stages to indicate the future routes,” (Green Hydrogen, p. 32). Then, with production capacity in place, synergies should arise that increase demand and realize economies of scale in industrial clusters.
The International Energy Agency (IEA) also recognizes the importance of industrial clusters in the development of low-carbon and 0-carbon hydrogen. In its Energy Technology Perspectives 2020 report, it includes hydrogen among four critical technology value chains that must be developed to achieve a carbon-neutral world. But the agency’s analysis of hydrogen appears in detail in its 2019 report, The Future of Hydrogen, in which it identifies four key economic sectors or value chains that offer the best opportunities to scale up hydrogen supply and demand.
Among these are industrial clusters, especially key clusters of industrial activity located near coasts and ports, where much of the existing demand for pure hydrogen already exists. In these locations there is diverse industry, existing pipeline networks, potential CO2 storage sites (for hydrogen production from natural gas and other fuels with CCUS), and nearby ports for an international hydrogen shipping trade. The report highlights the North Sea region, which offers particular advantages for clean hydrogen development with its numerous ports, strong industrial base and high potential for offshore wind power.
Hubs in planning
Regional planning for hydrogen hubs is underway in Northern Europe, as well as in China, Japan and Korea. The planning is still early stage, assessing technology readiness and hydrogen transport modes. Project planners do not foresee actual blue hydrogen production before the mid-to-late 2020s. They are mostly looking to have green hydrogen from renewable sources in the 2030s and beyond, although some projects see green hydrogen even sooner.
Two large hubs are foreseen in Britain. In the northwest, a large project called HyNet North West seeks to establish a low-carbon cluster by 2030 and a net-zero carbon industrial cluster by 2040. It will build a hydrogen distribution network at an industrial area along the English-Welsh border south of Liverpool. The project is being undertaken by a consortium of industrial companies led by the utility Cadent and the development company Progressive Energy. It has backing from the British government through its Industrial Strategy Challenge FundHyNet North West will undertake the development of an electrolytic hydrogen production plant and hydrogen pipeline. It will bring hydrogen production and supply close to users, developing an extensive hydrogen network with production from natural gas with carbon capture and storage (CCS). Storage will occur in offshore reservoirs by means of a CO2 pipeline.
A similar project is in planning stages in the Northeast, with the development of a low-carbon hydrogen production facility at Saltend Chemicals Park. Set in an extensive array of industries in the Humber River region near Hull, the Hydrogen to Humber Saltend (H2H Saltend) project is led by the Norwegian energy company Equinor (formerly Statoil). It will convert natural gas to hydrogen, supplying a nearby power plant and chemicals industries, and eventually supplying hydrogen-derived marine fuels for ships at the Port of Hull. Hydrogen production will occur with CCS and offshore carbon storage below the North Sea.
Two more large projects are in planning in the Netherlands along the North Sea coast. H-Vision Rotterdam is a blue hydrogen project seeking to create a hydrogen value chain that extends from production to industrial end-users in the Port of Rotterdam. The Port and a consortium of industrial companies are involved in the project. It should begin well before 2030, with CO2 storage in depleted gas fields under the North Sea.
Much further north at the Port of Eemshaven, the NortH2 project will use North Sea winds to produce hydrogen for port logistics and nearby industries. It is a green hydrogen project that will initially install an offshore wind complex of between 3GW and 4GW by 2030, with a large electrolyzer facility to be working by 2027. A consortium led by Shell, the port operator Groningen Seaports, and gas infrastructure company Gasunie leads the project.
Across the globe in China, planning is underway to create hydrogen hubs in several regions. In northern Hebei province, the city of Zhangjiakou is undertaking four government-backed demonstration projects that utilize renewable power. These will be complemented by other electrolytic facilities producing gray hydrogen. Hebei, which enjoys significant wind resources, is a center of China’s steel industry. These factors are compelling the province’s plans to become a key center of hydrogen production for transport and industry in China.
Other countries in Europe and Asia are developing clusters based on advanced electrolyzer technology. H2Cluster Norway, a national business association, is supporting the development of the world’s largest production facility for alkaline electrolyzers at Heroya near Oslo. Meanwhile in Japan’s Fukushima Prefecture, a consortium supported by the government’s New Energy and Industrial Technology Development Organization (NEDO), has opened a 10,000kW-class hydrogen production facility, utilizing energy from 20 megawatts of solar PV in the prefecture. It is the world’s largest-scale facility for producing hydrogen from renewable sources, opening new development opportunities in an industrial area that is finally recovering from the disastrous 2011 nuclear accident.
Hubs and spokes
Regional plans foresee the local production of hydrogen, both blue and green. They find places to store captured carbon below the ground and seafloor. And they see ample opportunity to power electrolyzers with winds from the North Sea and other nearby renewable sources.
Yet the buildup of major industrial clusters requiring growing amounts of clean hydrogen, through the 2020s and ‘30s, may open opportunities to develop new more far-flung sources of it. The development of hydrogen hubs suggests their linkage with the other pole of regional planning for clean hydrogen, namely major global supply areas.
IRENA sees industrial users can drive the development of dedicated “green hydrogen corridors” that connect regions generating low-cost renewable energy with demand centers. The IEA sees the need to get international shipping routes for the hydrogen trade going. These corridors (‘spokes’) will inevitably appear where the varying cost of hydrogen production among countries and regions favors resource-rich areas.
Europe and Japan, having relatively high costs and strong policy support for hydrogen, are likely importers. Big exporters would be Australia, Chile, the Southern US, the Middle East and North Africa, and other regions. To take advantage of an emerging global clean hydrogen market they will have to overcome an enormous challenge in the form of transportation costs.
Current planning for these clean hydrogen source regions will be discussed in part two of this article.