It is increasingly frequent to hear about hydrogen and its potential of becoming the “energy of the future”. But what exactly is hydrogen? What are the possible applications of hydrogen and what is the current state of this market?
In this study, we will focus on the current global market of hydrogen as well as all the business applications regarding Surfeo’s activity.
As the most abundant element in the universe, hydrogen is also in abundance on Earth, associated with other elements such as water, oxygen, or carbon. However, the hydrogen used by industries must be perfectly pure, which is not the case at its natural form. Thus, all the hydrogen used worldwide in industry and other applications is industrially produced.
To do this, three main processes are possible:
– Hydrocarbon reforming, mostly natural gas, by superheated water steam to separate the atoms constituting methane and rearrange them into dihydrogen H2.
– Coal gasification, releasing at extremely high temperatures the gases contained within the coal, such as dihydrogen.
– Electrolysis, usually of water, chemically decomposes the element under the effect of an electric current, obtaining dihydrogen
The first 2 processes are very energy-intensive and very polluting, releasing a lot of greenhouse gases. On the contrary, electrolysis is green, producing no greenhouse gas, but it is still very expensive and thus not used by the hydrogen producers. Nowadays, 95% of the produced hydrogen worldwide comes from hydrocarbon reforming and is then very polluting. Thanks to R&D and reduction costs, hydrogen could be produced exclusively from water electrolysis in the future. However, nowadays, hydrogen production and thus hydrogen utilization is not green at all.
The produced hydrogen will be used for three main usages. Firstly, most of the produced hydrogen is used in industrial processes, such as oil and fuel refining and ammonia production. The rest of the produced hydrogen is used as a fuel on its liquid form, mostly for the space industry, and finally as an energy vector, such as in the transportation industry. We can here add that hydrogen is not an energy but is an energy vector which is used for the transportation and storage of energy.
There are 2 ways to recover the energy contained in hydrogen. The first one is by using a fuel cell. The fuel cell directly converts the internal energy of hydrogen into electrical energy. By doing so, the fuel cell will only produce electricity, water, and heat. Thus, the production of electrical energy by a fuel cell is decarbonized. The second way is by burning the hydrogen as a fuel in a combustion engine. Here, the hydrogen must be liquefied, and is mixed with oxygen to create the propulsion. This process is used in the space sector, whereas the fuel cells are mostly used in vehicles for the transportation sector.
Hydrogen has been known for a long time, as its first discovery was in 1766. However, its use really developed after WWII, and the first hydrogen vehicles only appears on the market during the 90s.
As explained before, most of the produced hydrogen is used for industrial processes, such as oil and fuel refining and ammonia production. However, hydrogen has a huge potential within other applications, mostly on Surfeo’s markets, as space, defense, transportation and of course energy.
One of the biggest potentials for hydrogen is within the transportation sector: hydrogen vehicles, trains, planes, and boats. A hydrogen vehicle is an electrical vehicle which draws its energy from a hydrogen-powered fuel cell.
Regarding hydrogen vehicles, the development of the hydrogen sector relies in part on fuel cell technology. This technology has already been successfully developed but is still particularly expensive today. In fact, the production cost of one fuel cell reach up to 5,000$. The price of the fuel cell therefore remains the brake on the large-scale commercialization of hydrogen vehicles. This cost would have to be drastically reduced for hydrogen vehicles to be sold at the same price as a conventional car. Thus, R&D is extremely active on this field, and cost’s reductions should happen in the next years. Fuel cell technology can also be improved, regarding for instance its compactness, energy efficiency and durability. Hydrogen vehicles could be the solution for a decarbonized mobility, not directly emitting greenhouse gases. However, hydrogen’s production as well as the vehicle’s production are not “green” today.
Hydrogen can also be used for rail transportation, as the first hydrogen powered train came into service in 2018 in Germany, also powered by a fuel cell. In France, the first hydrogen trains are expected to start operating by 2025. For hydrogen-powered rail mobility, Alstom is already playing an important role as the manufacturer of the first hydrogen-powered trains.
Regarding hydrogen aviation, Airbus also saw the opportunity of hydrogen and plans to introduce the first commercial hydrogen aircrafts by 2035. These aircrafts would be powered by a conventional combustion turbine running on liquid hydrogen. Aeronautics manufacturers and equipment suppliers are also turning to hydrogen.
Finally, several maritime projects using hydrogen are also being developed, as hydrogen has an interesting potential in the field of freight transport. For instance, a bi-fuel engine using only 15% diesel and 85% hydrogen is already available on the market.
For the transportation sector, hydrogen represents a strong potential for all the different sections of this market.
Hydrogen is also used intensively by the space sector. In fact, space industry is the largest consumer of liquified hydrogen worldwide, being using as fuel for the spacecraft engines. Since the 60s, hydrogen has been used by the space industry as fuel, firstly by the NASA for the American Space Suttle and then since the late 70s by the ESA for the Arianne space program. Nowadays, Hydrogen is used for the Ariane 5 and Delta IV propulsion systems, and is at the heart of various projects, especially by the American company Blue Origin. Indeed, this hydrogen powered motor will be used for the propulsion of for the propulsion of the New Glenn launcher, and is also being considered for the propulsion of the second stage of the United Launch Alliance’s Vulcan rocket planned for 2021.
As well as for the transportation and space industries, hydrogen is also is also very seriously considered by the defense industry. For instance, the French army is currently developing several projects using hydrogen, such as an armored vehicle with hybrid motorization, a fuel cell to supply energy to a soldier’s equipment or even hydrogen powered drone. In total, the French army has invested €65 millions for the R&D of hydrogen military projects. The Italian and German army are also using hydrogen for the powering some hybrid submarines, using a fuel cell allowing discretion and autonomy for several weeks underwater. Finally, the US army is also looking for hydrogen utilization for its military equipment and has recently begun using hydrogen powered vehicles.
Hydrogen is already call by many the “energy of the future”. Hydrogen presents indeed several advantages regarding conventional energies. For instance, hydrogen generates a large amount of energy during its combustion, about 3x more than gasoline in equal amounts. Furthermore, hydrogen combustion is carbon-free. Hydrogen can thus be a 100% green energy if its production is also carbon-free. Hydrogen can thus address 2 issues of the energy transition: decarbonizing of the transportation sector and compensating for the variability in the production of renewable energies, by storing and restoring electricity. However, to make hydrogen truly green energy, its production must be totally decarbonated. In addition, technological advances are still needed to reduce costs and give everyone access to hydrogen. Only then could hydrogen be the “energy of the future”.
The worldwide hydrogen consumption was 74 million tons (Mt) in 2018, with only 1 Mt in France. In comparison, the worldwide energy consumption was up to 13,800 Mt (petroleum equivalent) in 2017. To be transported from its production location to its consumption place, pipelines are widely used, mainly in Europe and in the US, with respectively 1600km and 2500km out of the 4500km worldwide. Hydrogen can also be transported by trucks or boat. However, hydrogen is a voluminous gas. Indeed, at normal air pressure, 1kg of hydrogen requires 11 cubic meters to be stored. Thus, it is essential to increase its density and thus compress it so that it occupies less space. Storage and transport of hydrogen can be made at high pressure in gaseous form, at extremely low temperature under liquid form or even hydride-based in solid form.
The global hydrogen market has been constantly increasing in recent years and is expected to grow steadily in the next years. Regarding green hydrogen, the global market represented $787 million in 2019 and is expected to grow by 14% per year between 2020 and 2027. Green hydrogen being the solution for a decarbonized energy, lot of investments are specifically towards the green hydrogen production technologies, for hydrogen to become the “energy of the future”.
The hydrogen mobility market remains small nowadays. There are only 10,000 hydrogen cars in the world, 50% of them being in the US. 3 main manufacturers are sharing the leadership on the hydrogen cars market: Toyota, Hyundai, and Honda. Nevertheless, other automobile manufacturers seem to have finally understood the potential of hydrogen for the mobility and transportation industry. Thus Mercedes, Audi, Renault, and PSA Group are working on some hydrogen vehicles projects.
Because of the expensive prices of hydrogen vehicles, hydrogen mobility remains a niche market. For instance, the last hydrogen car produced by Toyota, the Toyota Mirai, costs at least €78,900.
Obviously, most people cannot afford a hydrogen car and remains loyal to gasoline-powered vehicles. Furthermore, even in the most developed hydrogen countries, such as Germany, very few hydrogen recharging stations are already running. Because of these elements, the development of hydrogen mobility is slow. R&D should allow to counteract these barriers, such as the high prices, and should allow the hydrogen market to develop further in the next years and decades.
With this idea in mind, the French government announced in September 2020 within its economic stimulus plan a €7 billion investments for the French hydrogen industry by 2030. The objectives or these massive investments are mainly to develop France’s production capacity, to foster the development of hydrogen heavy-mobility and to support R&D in this area. In the next 10 years, 50,000 to 150,000 direct and indirect jobs should be created thanks to these investments. At the same time, Germany announced also massive investments for its hydrogen industry. With the ambition of becoming the N°1 hydrogen country in the world, Germany will invest €9 billion euros in the next years.
Regarding hydrogen production, 4 key players are almost sharing the monopoly: Air Products, Air Liquide, Praxair, and Linde. Engie, Total, Airgas, Messer Group or even Taiyo Nippon Sanso are also big groups producing hydrogen. If hydrogen production is mainly assured by big international groups, hydrogen related technologies, such as fuel cells, are mainly develop and produced by smaller companies, or by subsidiaries of these big hydrogen producers’ companies.
In 2022, the French company Hydrogène de France plans to launch the world’s first mass production plant for high-power fuel cell by 2022.
Europe regroups lots of hydrogen clusters companies, the largest one being Hydrogen Europe, based in Bruxelles, regrouping industrial, research and national association members. When it comes to hydrogen, most activity is in northern Europe, such as Germany. Thus, a lot of company clusters are located in this part of Europe, being generally the most active for new technologies and renewable energies.
The hydrogen industry is a dynamic market, with numerous actors, investments and technological research and development. Thus, big events are organized frequently all over Europe. Thus, Paris will host in May 2021 the HyVolution trade show that will bring together hydrogen producers, storage and distributors, technology manufacturers and decarbonated hydrogen services providers. Other events will be hold throughout 2021 such as Hydrogen Fuel Cells in Hanovre in April specifically on the topic of hydrogen production, fuel cells and batteries. Some events are already planned online, as the Hydrogen Online Conference in October 2021, the biggest hydrogen online event.
Hydrogen regroups thus several strengths that make this market such interesting for the future of energy. Indeed, hydrogen technology has been known for a long time and is nowadays already existing and mature. In other words, even if hydrogen technology still needs improvements and R&D, most of its initial faults and inherent problems have been removed or reduced by further development. Hydrogen has already many business applications and its combustion is decarbonized, thus placing hydrogen as the potential alternative to fossil fuels, and therefore the green “energy of the future”.
However, as explained before, because of the high prices, the hydrogen market remains a niche market. Therefore, several years of R&D are still necessary for the hydrogen to become economically available for most people and for the market to develop. Furthermore, the hydrogen production is currently highly polluting, and hydrogen is still not a green energy.
Many opportunities stand out for the development of the hydrogen market, such as the energy transition. Hydrogen will obviously play an active role in the transition towards decarbonized energy in the next years and decades. New applications in defense and mobility are developing and numerous projects are running one. Of course, this is the results of massive investments towards the hydrogen industry, by governments and companies.
However, the hydrogen market could also be threatened by other industries. For instance, the improvement of the conventional electric cars’ autonomy could lead consumers to electric vehicles and take them away from hydrogen powered vehicles.
Nevertheless, as demonstrated in this article, hydrogen potential is huge and should massively develop in the coming years!
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