Pic: Hydrogen ship

Mass production of renewable fuels will be a key component in decarbonising the planet. The key to solving this global challenge is the new hydrogen economy, in which so-called green hydrogen is used directly as fuel or developed into other synthetic fuels. Economics will determine the optimum choice of future fuel for each application.

Global energy production turns steadily towards a 100% renewable energy future. In enabling this transition, solar and wind power hold great promise, but an energy source that may have an even greater impact on a fully renewable energy future is so-called ‘green’ hydrogen.

Hydrogen gas can be manufactured from water by using electricity to split water molecules into oxygen and hydrogen. Green hydrogen refers to hydrogen that is produced with renewable electricity such as solar and wind power. The hydrogen can then be used directly as fuel or as raw material for other renewable fuels.

Today’s global energy industry is not built to use pure hydrogen, so the widespread adoption of hydrogen fuel will require massive infrastructure investments in addition to new industrial regulations. However, hydrogen is also a key building block for other carbon-neutral synthetic fuels that are needed to accelerate the decarbonisation of energy production. Power-to-X (P2X) -technology can be used to produce green hydrogen, but also synthetic methane, methanol, ammonia, kerosene, gasoline and diesel.

Sushil Purohit, President, Wärtsilä Energy & EVP Wärtsilä points out the responsibility of politicians, in addition to the major role of investors and companies such as Wärtsilä, when it comes to questions like infrastructure. “Countless governments have set ambitious carbon neutral targets, but these are yet to be matched by clear strategies and firm action plans,” he says.

Flexible fuel source

Using pure hydrogen as a fuel will require new infrastructure such as pipelines, storage facilities, hydrogen-ready engines and other power generation technologies, as well as hydrogen-powered cars, all of which will take time to design and deploy. While this infrastructure is being built, companies can leverage P2X to produce, for example, synthetic methane and use it as a drop-in fuel.

Around the world, many countries are envisioning a hydrogen economy in which green hydrogen is used as a fuel for industry, power generation, heat and transportation. In the future, green hydrogen and other carbon-neutral synthetic fuels could replace, for example, gasoline as a transport fuel or natural gas as fuel for power generation.

“Hydrogen and synthetic fuels through Power-to-X are key components in reaching a 100% renewable energy future”, says Sushil Purohit. “Our team focuses on long-term planning to understand the optimal way to build energy systems and power generation technology in the future. Power systems with a high share of renewables need to be balanced in the most sustainable way possible, first with natural gas, and later with future fuels such as hydrogen.”

Renewable electricity is key

Hydrogen produced from fossil fuels has a long history of use in various industrial processes. In the last few years, it has come to the forefront as part of decarbonisation and the transition to renewable energy sources. “For many processes, for example in the chemical and steel industries, using green hydrogen instead of grey hydrogen as a fuel is basically the only possible and most viable way to reduce emissions in the future,” says Ville Rimali, Director, Growth and Development, Africa & Europe, Wärtsilä Energy. “Further into the future, green hydrogen will also offer a lot of possibilities for decarbonising power generation and transportation.”

As the production of green hydrogen depends on using excess renewable electricity, the geographic availability of cost-effective green energy is a key factor that will shape the global hydrogen economy. “At the moment, generating hydrogen from water with solar power is the most economical way, so it’s no surprise that green hydrogen projects are currently being undertaken in regions such as the Middle East, Australia, North Africa and Chile,” notes Rimali. “The challenge is that these areas don’t correspond to the locations that would have the most demand for green hydrogen fuel.”

Scaling up the global infrastructure

To meet supply with demand, hydrogen needs to be transported to its final place of use. Pressurised storage as in gaseous form is currently the only feasible way of storing and transporting hydrogen on an industrial scale, but this method offers a relatively low energy density and is not suitable for long-term storage. As a way of meeting this challenge, hydrogen can be combined into another compound such as ammonia for transport and storage. In the end, the economics of manufacture and logistics will determine the optimum choice of fuel.

“The scaling up of global hydrogen production and infrastructure will take time,” says Ville Rimali. “In certain sectors such as the marine industry, companies will essentially have no other option but to adopt some form of hydrogen-based fuel in order to meet their emission targets. As a result, these customers will also be ready to invest more in moving towards hydrogen-based operations. At the other end of the spectrum, we have industries such as power generation that have a wider range and more mature decarbonisation options, so in these applications green hydrogen will need to be even more competitive from a cost standpoint and its adoption will take a bit more time.”

Europe leads the way

At the moment, the move towards a hydrogen economy has largely been driven by Europe. “The European Union is investing heavily to ensure leadership in this area and to become the global technology hub and dominant market for green hydrogen,” says Ville Rimali. “Another factor in the EU’s favour is Europe’s extensive gas pipeline network that could potentially be converted for hydrogen use in the future. Many areas such as northern Germany also have large underground gas storage facilities that could be upgraded to be used for hydrogen.”

Ultimately, the key to a successful entry into the new hydrogen economy will depend on a finely tuned balance of geographic, economic and technical factors, as companies and countries seek the optimum combination of where and how to manufacture, transport and use the new renewable fuel source. Rimali notes that even the Nordic countries could find a role to play.

“At the moment, everyone is looking towards Africa and the Middle East for green hydrogen production, but the Nordic countries actually have a lot of potential since they have access to competitively priced wind and hydro power. Unlike solar power, these energy sources can power hydrogen production around the clock, offsetting the initial investment with a higher capacity utilisation rate. So I think the Nordics would do well to take a more strategic role in seizing these opportunities.”

Whatever the future brings, it is certain that green hydrogen has a high potential for becoming the fuel of the future, helping societies move towards decarbonisation. Wärtsilä wants to take an active role in exploring how hydrogen can be used as a fuel for balancing power generation.

“The market for hydrogen engines will emerge in the years to come as the use of fossil fuels is gradually reduced and new technology around future fuels matures,” says Sushil Purohit. “We want to make sure our technology is future-proof, ready to help nations balance their cleaner power systems first with natural gas, and later with 100% renewable fuels.”

Marex Media