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How Low Cost Wind & Solar Push The Market For Renewable Hydrogen

With help from low cost wind and solar, renewable hydrogen could squeeze natural gas out of ammonia production and other major industrial markets.

Natural gas gets a lot of credit for toppling coal out of first place for power generation in the US, but gas stakeholders might want to put that celebratory champagne back on ice for a while. Wind and solar already beat natural gas on price in some parts of the US grid, a trend that is likely to spread. On top of that, renewable hydrogen could quickly replace natural gas in two other major markets, fuel and fertilizer production — with an assist from wind and solar power.

A Pathway For Renewable Hydrogen

For those of you new to the topic, hydrogen is an abundant fuel, but it does not exist in nature. It has to be extracted from something else, and right now that something is mainly natural gas.

On the plus side, more sustainable alternatives have begun to emerge. Substituting biogas for natural gas is one option. Another is using renewable energy to separate or “split” hydrogen from water with an electrical current.

Water-splitting (aka electrolysis) makes no sense from a sustainability perspective, if the electrical current is generated from fossil fuels. Wind and solar have changed the game.

However, even with low cost wind and solar the economics still don’t quite work out. Electrolysis requires a catalyst to kick off the reaction, and conventional catalysts are based on platinum and other expensive metals.

Bad news!

Help Is On The Way

Back to the good news. A few years ago, CleanTechnica took note of the company Dioxide Materials, which is among those working on the catalyst issue. In 2015 Dioxide Materials received a $2 million slice of funding from ARPA-E, as part of a $125 million round of awards aimed at accelerating “transformational” energy R&D.

The company’s name also popped up again last December in connection with plans for a zero emission ferry in the San Francisco Bay.

Last week CleanTechnica reached out to Dioxide Materials for an update, and learned that the company spun off the renewable hydrogen work into an outfit called Alchemr.

Rich Masel, who is CEO of Dioxide Materials and chair of the Alchemr board of directors, graciously shared some thoughts on the renewable hydrogen market in a phone interview with CleanTechnica.

As Masel sees it, the market for renewable hydrogen in the auto sector is going to take a long time to develop. In contrast, opportunities exist here and now in the market for ammonia, the main ingredient in fertilizer production (following comments edited for clarity and flow):

CleanTechnica: What is the market for renewable hydrogen?

Masel: There is a big market for hydrogen, but not for cars. That’s going to take a long time. The big market is in ammonia plants.

Ammonia is typically made from natural gas. Until two years ago that was cheapest way to make it. Now that is slowly changing in some areas.

In China, for example, there is a shortage of natural gas in winter so they turn off fertilizer plants. In Italy, they don’t have enough natural gas to make the fertilizer they need. In Africa, the fertilizer needs to be made close to the marketplace. In Chile natural gas is very expensive, but they just built a two cents per kilowatt hour wind farm [note: solar is also super cheap in Chile].

In these kinds of applications, electrolyzing water is economical.

Look at Colorado. Renewable energy was 1.8 cents average per kilowatt. At that price electrolysis is reasonable. You’re close to natural gas.

What About That New Catalyst?

Mr. Masel emphasized that as far as Alchemr is concerned, the high-volume market for renewable hydrogen right now is in ammonia production and industrial applications, not hydrogen fuel cell vehicles.

That’s pretty evident, considering the sluggish pace of fuel cell passenger cars. The prospects for future growth look better for shipping and logistics (think semi trucks and forklifts). Still, Masel is focused on the present:

Masel: California refineries used 1 billion cubic feet of hydrogen annually, all made from natural gas.

When I look at the market for renewable hydrogen it’s not for cars. It’s going to replace natural gas or coal for industrial uses.

CleanTechnica: What innovation is Alchemr bringing to electrolysis?

Masel: There are two ways to make hydrogen. One is an old fashioned electrolyzer, but you can’t turn it on and off so easily. They are also gigantic.

The other is PEM (polymer electrolyte membrane) electrolyzers. They work perfectly fine but they use a lot of platinum. We get the same performance with nickel, iron, and stainless steel.

The problem is that the capital expenditure is pretty high for both PEM and old fashioned electrolyzers. We’ve built a system that’s the size of a PEM unit, without the platinum. That also reduces operating costs because replacement of the catalyst is less expensive.

CleanTechnica: Who are your customers?

Masel: We can’t right say anything specific right now about major companies, but we are working with two. For hydrogen you have to look at the real market opportunities — to lower the carbon footprint of various major industries, like making fertilizer.

For CO2 it’s the same kind of thing. The Europeans have said they are banning fossil fuels, so oil companies are looking for alternatives. You have to have a carbon source aside from biofuel.

Onward And Upward For Renewable Hydrogen

Masel wrapped up the conversation by nothing that the total hydrogen market last year was $160 billion.

Look for the company’s signature renewable hydrogen under the trademarked name Cleandrogen. The Alchemr website also provides these details about the company’s trademarked Flexolyzer electrolyzer, billed as a “complete alkaline anion exchange membrane water electrolyzer:”

…The unit includes corrosion resistant 5 cm2 anode and cathode flow fields, an MEA with base metal catalysts, metal gas diffusion layers, o-ring seals, and Teflon gasketing.

Got all that? On a side note, the ammonia angle is also interesting from a transportation perspective. Researchers are beginning to work on the idea of using sustainable ammonia as an economical transportation and storage medium for hydrogen.

As for Dioxide Materials, the company has some interesting carbon dioxide recycling projects up its sleeve, including a room temperature system designed for use on Mars. Yes, we are going to Mars.

Circling back around to that thing about wind and solar being cheaper than natural gas in some electricity markets, don’t just take our word for it. The trend was recently underscored by researchers at the University of Texas at Austin, who crunched the numbers on a county-by-county basis.

Follow me on Twitter.

Image: via Alchemr.

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Tina specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Views expressed are her own. Follow her on Twitter @TinaMCasey and Google+.


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