Investors seem to be head over heel in love with hydrogen, judging from a visit to Bloomberg’s BNEF Summit in New York City last month. The news was not all good for fans of fuel cell electric vehicles, though. CleanTechnica’s takeaway from the conference is that renewable hydrogen is breaking into some key sectors of the economy, but fuel cell EVs have a longer row to hoe.
After the conference, a bit of news popped up that illustrates how hydrogen could squeeze fossil fuels out of some industrial sectors, so let’s start with that.
Hydrogen Trap Shuts On Steelmaking, Eventually
With the exception of certain outliers (looking at you, JP Morgan and Wells Fargo), global investors are finally beginning to pull the big bucks away from new coal-fired power plants.
That doesn’t mean necessarily the end of coal mining. Demand for coal in steel making could still provide enough incentive to keep the mines humming along.
Or, maybe not. Last week the sprawling mining and steelmaking behemoth ArcelorMittal announced that it will construct a demonstration-scale project at its Hamburg plant, aimed at using hydrogen instead of coal as a reducing agent in steelmaking.
According to the company, the goal is to “produce steel with the lowest CO2 emissions.”
That’s a pretty smart move considering how steel dovetails with the solar industry. A steel company that touts a “lowest emission” brand will gain a competitive edge as wind and solar companies pressure their supply chains to reduce greenhouse gas emissions.
Researchers from the University of Freiberg will work with the Hamburg plant to monitor the new H2-based process. Initially it will run on “gray” hydrogen from the plant. The eventual goal is to run it on “green” hydrogen from renewable sources.
Here in the US, the Energy Department is also bullish on using H2 in steelmaking.
The State Of The H2 State
Circling back around to the BNEF Summit, CleanTechnica squeezed into a standing room only conference room for a session on investor opportunities in the hydrogen field.
On the bright side, hydrogen can be viewed as a vector of decarbonization. According to the presenter, the Hydrogen Council foresees that hydrogen could account for 18% of final energy demand by 2050. The big question for investors is how to strategize their activity in this field.
The Bloomberg presenter (sorry — lost that name in my notes!) — was pretty confident that the cost of renewable H2 is on a pathway to compete in the low carbon economy in the future. The cost of electrolysis is dropping, partly due to the falling cost of wind and solar. Scale-up in the electrolysis industry will also help cut costs.
On the other hand, Bloomberg is not confident that global wind and solar resources can provide enough energy to power enough electrolysis to meet the global demand for hydrogen (btw electrolysis is fancyspeak for “splitting” H2 from water).
Even if wind and solar resources are sufficient, using them for electrolysis may not be the most efficient way to meet the overarching goal of global decarbonization across all sectors of the economy.
The Fossil H2 Ghost Haunting Global Decarbonization
That brings us back around to strategic investing. Bloomberg pinpoints on-site electrolysis for industrial use as one promising area for investors in the near term.
If that rings a bell, you may be thinking of the ArcelorMittal project at the top of this page. Steelmaking is just one of many major industrial sectors that lean on hydrogen.
Fuel cell EVs don’t fare as well in Bloomberg’s analysis, although that probably won’t stop auto manufacturers from making them.
As for satisfying global demand for hydrogen, Bloomberg zeroed in on one potential solution: fossil-sourced H2 plus carbon capture.
Yikes! Talk about out of the frying pan, into the fracking fire.
If you have any thoughts about that, drop us a note in the comment thread.
Meanwhile, keep in mind that the purpose of BNEF is to provide a fact-based knowledge base for high dollar investors. Considering that natural gas is the primary source of hydrogen today, investing in fossil hydrogen plus carbon capture makes sense within that bubble.
Renewable Hydrogen, Eventually
High risk, high reward investment is a whole ‘nother kettle of fish. That’s why we have a sprawling network of taxpayer funded national laboratories working on cutting edge energy projects like renewable H2.
Legacy fossil fuel companies are another potential source for new approaches that could push more commercially competitive, renewable H2 into the market. The French company Engie, for example, recently leveraged its natural gas know-how to deploy a fleet of fuel cell vans running on renewable H2.
Biogas and other renewable H2 pathways could also come into play, so there’s that.
Follow me on Twitter.
Don't want to miss a cleantech story? Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!
Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.