Is Hydrogen the Next Big Green Trade?

It has long been the hope of clean-energy proponents to use renewable energy sources to create “green hydrogen.” This dream has been frustrated by technological limitations, but that may now finally be changing.

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    Is Hydrogen the Next Big Green Trade?

    Is Hydrogen the Next Big Green Trade?

    It has long been the hope of clean-energy proponents to use renewable energy sources to create “green hydrogen.” In fact, President Clinton saw it as a key to moving away from fossil fuels. This dream has been frustrated by technological limitations, but that may now finally be changing.

    Hydrogen: What is it Good for?

    Hydrogen is a critically important element, used primarily in refining oil and gas and producing fertilizer, methanol, and a range of other everyday consumer and industrial chemicals. Unfortunately, it is extremely scarce in nature, requiring it to be extracted from other elements, primarily natural gas, though it can also be extracted from water. Producing it results in over 800 million tons of carbon dioxide emissions every year—not very climate friendly.

    A Two-Act Revolution

    Recent research shows how hydrogen production may become more environmentally friendly by using solar and wind power to produce hydrogen via a “power-to-gas” system to power the extraction process that uses renewable energy during times of excess and when rates are lower.

    Another benefit —currently capturing the attentions of investors—is its use as a transportation fuel. This may be the second and biggest act to the hydrogen revolution. As a fuel for cars and trucks it has the utopian benefit of being zero emissions. Plus, fuel cells (the storage for hydrogen power) are generally seen as having a longer use and faster recharge than current EV batteries.

    The hydrogen revolution will not occur overnight. Expect first the adoption in concentrated industrial zones (i.e., the northeast or Gulf Port region) and commercial transportation.

    Obstacles to the Revolution

    There are challenges if the world is to benefit from the lower carbon footprint that a hydrogen future promises.

    As was the case with renewable energy, hydrogen still has a distance to travel to be cost competitive with incumbent, carbon-based energy sources. Prices are falling, though, thanks to declining renewable energy costs and growing economies of scale. Hydrogen fuel cells will need to shrink to gain wider adoption, especially in the automobile market.

    Today, there is a virtual absence of the infrastructure needed to produce, transport and recharge fuel cells. It will require massive amounts of investment, though some existing infrastructure can be converted, (e.g., natural gas pipelines).

    Regulations need to be developed and harmonized nationally and internationally to ensure safety and insurability.

    Finally, the public and policy makers will need to be educated to the hydrogen future in order to ease the path and lower the cost of moving toward a new chapter in energy’s history.

     

    Please reference disclosures: https://blog-dev.americanportfolios.com/disclosures/

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