Here is part 1 of the study
Part 2
Figure 4 illustrates that fossil gases and coal are currently predominantly used for the production of hydrogen. Only around four percent of the hydrogen generated in 2018 was produced by (clean) electrolysis in connection with renewable energy. Conversely, this means that 96 percent of the amount of hydrogen produced has been produced using input materials that are still primarily responsible for climate change.
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You have to know that the majority of gray hydrogen is obtained from natural gas or other fossil fuels. In the production process used for blue hydrogen, too, gas and / or coal are used as the most important input materials.
Green hydrogen is the most expensive and complex production method.
water (H2O) is broken down into the two molecules O2 (oxygen) and H2 by means of the chemical process of electrolysis – completely without harmful CO2 emissions. If the electricity needed for electrolysis also came from renewable energy sources, the entire value chain would be CO2 neutral. This is the reason why green hydrogen is the only sensible, future-oriented hydrogen variant for many experts. But the technological and financial hurdles are high: In comparison to blue hydrogen, the production costs per kilogram of hydrogen produced are two to three times higher, like Figure 5 clarifies.
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The challenge of establishing a green and therefore really clean hydrogen economy is that immense investments have to be made in different technology areas that are simultaneously coordinated. In order to achieve this long-term goal, the expansion and promotion of green electricity, additional infrastructure and efficient electrolysis capacities are essential. Because currently up to 36 percent of the energy used is lost in the production of green H2. According to various studies, large-scale investment programs over many years are necessary to ensure a comprehensive infrastructure and efficient technology. But this could succeed – also because of the economies of scale that then set in – significantly lower the production costs like this Figure 6
implies. The first successes in the cost-cutting measures have already been achieved.
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Diverse areas of application conceivable
The opportunity to have a positive impact on climate change through the increased use of green hydrogen in particular is an important point why public funding for H2 is being discussed and seems sensible. But hydrogen has other important properties that make it interesting for a broader application: Despite its lower density compared to other gases, it can be stored (which is an advantage over electricity, the storage capacity of which is limited), and can be transported (for example also in existing gas networks, but basically also by ship and truck), it can be used as a wholesale product (for example in the chemical industry), it can be used to generate energy, fuel and excessive heat and is available in a large number can be used in different industrial sectors, which so far have almost exclusively used fossil fuels in their production processes.
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Another advantage is the positive interaction with the electricity generated in the area of renewable energies. Because the generation of hydrogen could serve as a “buffer technology”. Figure 8 illustrates this simple but important connection.
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According to Union Investment, the chances that arise from the broader use of hydrogen in the medium to long term are considerable – especially from a climate perspective. But it must also be pointed out that – in addition to the immense costs, the complexity and the long-term nature of the projects – hydrogen also has some disadvantages: This is how hydrogen must be produced; this means that H2 always has a (cost) disadvantage compared to fossil energy sources that only have to be extracted or mined. Due to its lower density (compared to other gases), hydrogen is more difficult to store. H2 storage systems therefore require comparatively more space and therefore tend to be more expensive.
Hydrogen can be transported relatively well in pipes. However, the often necessary unit conversions of hydrogen during transport, for example on ships and with trucks, increased the costs for industrial end users and led to energy loss. It is therefore a decisive factor, but also cost-intensive and lengthy, to first ensure the infrastructure for a reliable and inexpensive supply of hydrogen.
Part 3 of this study will be released on Monday, June 29, 2020
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