Hydrogen As Renewable Fuel

The hydrogen generation market is projected by the industry research firm MarketandMarkets to reach a value of $264 billion by the year 2027.   The forecast implies a compound annual growth rate of 10.5% from the current year valued at $160 billion.  Two rather incongruous growth drivers are at play:  fuel cell powered electric vehicles on the ground and rockets aimed at space.  Hydrogen has particular appeal for applications that are resistant to decarbonization because electrification is technically difficult.  Examples are vehicles used in heavy industry, shipping and aviation.  However, there is new-found interest in hydrogen among manufacturers of consumer vehicles.  Electric vehicle owners are particularly motivated to drive an environmentally friendly car.   

This is somewhat surprising given that most of the current hydrogen supply is still produced by reforming fossil fuel.  In other words, hydrogen is not very ‘green’.  It is possible to produce hydrogen using electrolysis, a process that uses electricity to split water with hydrogen and oxygen.  Since the process gives off no carbon, the only environmental concern with hydrogen produced by electrolysis is the source of electricity. 

Electrolysis demonstrates hydrogen role as an energy carrier.  Zapping water with a jolt of electricity simply transports energy created by another element  -  H2O into H and O.  The chemical energy in hydrogen is the conversion of electrical energy from the original source of the chemical energy of hydrocarbons.  Even more energy is lost in fuel cells.   

Unfortunately, about 30% of the energy in water is lost in the electrolysis process, nearly double that lost in producing hydrogen from fossil fuels.  That means hydrogen produced by electrolysis costs about $3.00 to $8.00 per kilogram compared to $0.50 to $1.70 per kilogram for conventional fossil fuel-based hydrogen.  Such costs comparison may stand in the way of realizing the MarketandMarkets forecast.  New technologies are needed to improve the hydrogen production process if the world is serious about achieving net zero emissions goals by 2050.

 

This post begins a series on recent developments among hydrogen fuel producers and technology developers.

 

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.