The Global Clean Energy Transition: Green Hydrogen
Zero-carbon sources now account for more than 40 percent of global energy generation capacity, according to a BNEF analysis released this week. Green hydrogen could be the missing piece to total dominance for the renewable energy sector.
Zero-carbon sources now account for more than 40 percent of global energy generation capacity, according to a BNEF analysis released this week. A stunning 91 percent of all new power capacity added in 2023 came from solar and wind, compared to only 6 percent from fossil fuels, according to the research.
BNEF’s Power Transition Trends report gathers data from more than 140 markets to track energy trends globally. China is far and away ahead of the pack in renewable energy deployment, consistent with its fast-paced record on wind and solar development over the past 10 years. “The U.S., Brazil, Canada and India rounded out the top five, which accounted for 60 percent of the world’s renewable generation last year,” .
Green hydrogen can overcome obstacles to even more clean energy development in the U.S.
The U.S. ranked second behind China for new renewable energy investments in the first half of 2024, according to BNEF. But some obstacles continue to slow the pace of change, including a subset of lawmakers who seem determined to reverse the clock on clean energy.
Aside from partisan politics and local objections, gaps in the electricity transmission network and a bottleneck for grid connections continues to impede renewable energy development. The emerging green hydrogen industry offers a solution for both at once.
In contrast to conventional hydrogen extracted from natural gas or coal, green hydrogen is produced from renewable resources. Most green hydrogen is made by splitting water in electrolyzers, which use an electrical current to extract hydrogen and oxygen from water molecules. Using electricity supplied by wind or solar farms to produce green hydrogen essentially creates a large-scale, long-duration energy storage platform.
Green hydrogen can be transported by rail, truck, pipeline or ship instead of relying the existing grid network to transport renewable electricity. Electrolysis systems can also run at night when excess wind power is available or during daytime periods when solar generation outstrips demand.
Accelerating the U.S. hydrogen economy with renewable energy
Despite the obstacles, the 2022 Inflation Reduction Act championed by President Joe Biden is rightfully credited with spurring a powerful new wave of renewable energy investment. But it’s not the only significant new law stimulating the renewable energy sector. The 2021 Bipartisan Infrastructure Law also contains a key hydrogen provision that will help.
Though passed one year before the Inflation Reduction Act, the hydrogen component of the infrastructure law requires a lengthy pre-implementation period that is still ongoing. The provision designates $7 billion for a new program to stimulate the U.S. hydrogen market. Called the Regional Clean Hydrogen Hubs program, the goal is to organize the unique energy resources, market opportunities and infrastructure strengths in different regions of the U.S.
Some funding is reserved to support hydrogen production from natural gas with carbon capture, but the bulk of the effort is focused on renewable energy resources along with a measure of nuclear energy.
Last fall, the U.S. Department of Energy selected seven regional hubs for potential funding. Following a period of negotiation, three of those hubs progressed to the funding award stage.
One is the Pacific Northwest Hydrogen Association, which covers Montana, Oregon and Washington, three states with relatively low populations, ample space and abundant renewable energy resources that include offshore wind.
The group plans to cut the cost of electrolysis systems by supporting the electrolyzer manufacturing industry. “The Pacific Northwest Hydrogen Hub’s vast use of electrolyzers will play a key role in driving down electrolyzer costs, making the technology more accessible to other producers, and reducing the cost of hydrogen production,” the group explains.
The ultimate goal Is to supply green hydrogen to fuel a low-emission, heavy-duty freight network for the entire West Coast. “Other hydrogen uses include agriculture (fertilizer production), industry (generators, peak power, data centers, refineries), and seaports (drayage, cargo handling),” the group adds.
Meanwhile a sister hub in California, the Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES), intends to produce hydrogen from biomass along with water electrolysis. It plans to use the hydrogen it produces to decarbonize seaports in the state and export the excess to other markets.
Natural gas gets some support, but diversification is the key
The third awarded hydrogen hub is the Appalachian Regional Clean Hydrogen Hub (ARCH2). This group focuses exclusively on natural gas with carbon capture, covering West Virginia, Ohio and western Pennsylvania. That approach may not pay off in the long run if the other new hubs fulfill the promise of flooding the market with low-cost green hydrogen. And it is certainly not consistent with the urgent guidance of climate scientists and policymakers who cite the need for rapid decarbonization. Nevertheless, the Bipartisan Infrastructure Law does stipulate a carveout for natural gas.
In sharp contrast to ARCH2, the other six hubs demonstrate how different renewable resources can be called upon to support a robust, diversified domestic hydrogen industry. Of the four remaining hubs that are still negotiating their final awards, none focuses exclusively on natural gas.
Eastern Pennsylvania, for example, joined with Delaware and New Jersey to form the Mid-Atlantic Clean Hydrogen Hub consortium, aimed at leveraging renewable and nuclear energy for water electrolysis. New Jersey and Delaware have access to offshore wind areas leased by the U.S. Department of the Interior to further power the effort.
The Gulf Coast Hydrogen Hub in Texas plans to focus on both water electrolysis from the region’s vigorous wind and solar industries as well as natural gas with carbon capture. Spearheaded by the firm HyVelocity, the consortium aims to push down the overall cost of hydrogen by deploying low-cost natural salt caverns and pipeline infrastructure for storage and distribution.
Similarly, the Heartland Hub of Minnesota, North Dakota and South Dakota will leverage different renewable and non-renewable energy resources to stimulate the regional hydrogen market, with a particular focus on decarbonizing fertilizer production.
A fourth diversified hub awaiting negotiation is the Illinois-Indiana-Michigan Midwest Hydrogen Hub. Under the umbrella of the Midwest Alliance for Clean Hydrogen, this hub aims to decarbonize heavy industries like steel- and glass-making along with power generation, refining, heavy-duty transportation and aviation fuel.
As the full effect of the Regional Clean Hydrogen Hubs program begins to materialize over the coming years, the Inflation Reduction Act is also motivating the introduction of new financing tools that support renewable energy and energy storage projects. However, these important new policies should not be taken for granted. To achieve the maximum impact on rapid decarbonization, they will need consistent, strong support from the next president, and from Congress, state lawmakers and the American public.
Questions/Answers-:
1.Which countries were the top five in renewable energy generation according to the BNEF report?
1. Top Five Countries in Renewable Energy Generation According to the BNEF Report:
According to the latest Bloomberg New Energy Finance (BNEF) report, the top five countries in renewable energy generation are:
China: The largest producer of renewable energy globally, leading in solar, wind, and hydroelectric power generation.
United States: A major player in wind and solar power, with a growing investment in offshore wind and utility-scale solar projects.
India: Significant growth in solar and wind capacity, supported by government policies and ambitious renewable energy targets.
Germany: A leader in the European Union's renewable energy efforts, particularly in onshore and offshore wind and solar power.
Japan: Strong growth in solar power generation and investment in offshore wind projects, supported by favorable government policies.
2.What are the main challenges slowing down renewable energy development in the U.S.?
2. Main Challenges Slowing Down Renewable Energy Development in the U.S.:
Grid Infrastructure Limitations: The current electricity grid in the U.S. is aging and not adequately designed to handle the variable nature of renewable energy sources, such as solar and wind. Upgrading the grid infrastructure to accommodate more renewable energy is costly and time-consuming.
Permitting Delays: Lengthy permitting and regulatory processes for new renewable energy projects, including environmental impact assessments and local government approvals, can significantly delay project timelines.
Transmission Constraints: Lack of sufficient transmission capacity to transport renewable energy from remote generation sites (like wind farms in the Midwest) to demand centers (like cities on the East and West coasts) slows down deployment.
Land Use Conflicts: Securing land for renewable energy projects can be challenging due to competition with agriculture, conservation, and other land uses. Public opposition and concerns over visual, environmental, and noise impacts can also pose barriers.
Supply Chain Issues: The U.S. faces supply chain challenges for critical components, such as solar panels, wind turbines, and battery storage systems, which are often imported. Trade tariffs, geopolitical tensions, and raw material shortages can further exacerbate these issues.
3.How does green hydrogen differ from conventional hydrogen, and how is it produced?
3. How Green Hydrogen Differs from Conventional Hydrogen and How It Is Produced:
Green Hydrogen:
Production Method: Produced through the electrolysis of water using renewable energy sources like wind, solar, or hydroelectric power. The process splits water molecules (H₂O) into hydrogen (H₂) and oxygen (O₂) without emitting carbon dioxide (CO₂).
Emissions: Zero carbon emissions during production, making it a fully sustainable option.
Distinguishing Features: Considered a "clean" form of hydrogen due to its production using renewable energy and its potential to decarbonize various sectors.
Conventional Hydrogen:
Production Methods: Primarily produced through steam methane reforming (SMR) of natural gas (resulting in "grey hydrogen") or coal gasification, both of which emit significant amounts of CO₂. "Blue hydrogen" involves the same production process as grey hydrogen but uses carbon capture and storage (CCS) to reduce emissions.
Emissions: High emissions for grey hydrogen; lower emissions for blue hydrogen, but still not zero due to incomplete carbon capture and potential methane leaks.
Distinguishing Features: Relies on fossil fuels and contributes to greenhouse gas emissions unless coupled with CCS.
4.What role does green hydrogen play in overcoming the limitations of the electricity transmission network?
4. Role of Green Hydrogen in Overcoming Limitations of the Electricity Transmission Network:
Energy Storage Solution: Green hydrogen can act as an energy storage medium, storing excess renewable energy (e.g., solar or wind power) generated during periods of low demand. This stored energy can be used later, helping to balance supply and demand without the need for massive grid expansions.
Transportation and Flexibility: Green hydrogen can be transported through existing or modified natural gas pipelines, reducing the need for new, costly transmission lines. It can also be used in sectors that are difficult to electrify, such as heavy industry and long-haul transport, providing a flexible energy source where direct electrification is impractical.
Distributed Energy Resource: Green hydrogen can be produced locally at distributed sites (e.g., near renewable energy plants or consumption points), reducing dependence on long-distance transmission lines and enhancing grid resilience.
5.How does the U.S. Inflation Reduction Act impact renewable energy and hydrogen investments?
5. Impact of the U.S. Inflation Reduction Act (IRA) on Renewable Energy and Hydrogen Investments:
Tax Credits and Incentives: The IRA provides significant tax credits and incentives for renewable energy projects, including solar, wind, geothermal, and green hydrogen production. These credits aim to lower the cost of capital for clean energy projects and stimulate private investment.
Hydrogen Production Credits: The IRA introduces a new production tax credit (PTC) for clean hydrogen production, offering up to $3 per kilogram for green hydrogen, depending on the carbon intensity of the production process. This makes green hydrogen more cost-competitive with grey and blue hydrogen.
Support for Domestic Manufacturing: The Act includes incentives for developing a domestic supply chain for renewable energy technologies, such as solar panels, wind turbines, and electrolyzers, reducing reliance on foreign imports and creating local jobs.
Grid Modernization: The IRA allocates funding for grid modernization projects, including upgrading transmission infrastructure and integrating distributed energy resources, to support the expansion of renewable energy and green hydrogen.
Decarbonization Goals: By promoting clean energy deployment and reducing costs, the IRA is expected to accelerate the U.S. transition to a low-carbon economy, reduce greenhouse gas emissions, and support the growth of a sustainable hydrogen economy.
These measures make renewable energy and green hydrogen more attractive for investors, helping to drive rapid expansion and decarbonization efforts in the U.S. energy sector.
Here is a YouTube Video for better understanding-:
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