|
By
Felicity Bradstock
October 20, 2023
Is Green Hydrogen An Opportunity Or Distraction For The U.S.?
-
Green
hydrogen production is gaining momentum in the U.S., driven by
substantial funding and ambitious goals.
-
Some
experts argue that green hydrogen projects should prioritize new
renewable energy sources rather than relying on existing grids, while
others see it as a distraction from direct electrification.
-
The U.S.
is facing regulatory challenges and differing viewpoints on the role
of green hydrogen in achieving clean energy and climate objectives.
There has been great enthusiasm in the energy world around the
increased production of hydrogen, which can be used in a range of ways
as a cleaner alternative to fossil fuels. However, an increase in
green hydrogen capacity would require a significant amount of clean
electricity from renewable resources. Many energy experts in the U.S.
are now asking whether the production of hydrogen is the best use of
solar, wind and other clean energy sources or whether they could be
better used directly.
Green hydrogen is produced using renewable energy sources to power an
electrolysis process, which separates the hydrogen and oxygen in
water. The process emits no carbon dioxide, making it much cleaner
than grey hydrogen, which is derived from fossil fuels. There has been
increasing interest in green hydrogen as, in contrast to many other
clean energy sources, it is suitable for a wide range of applications.
The International Energy Agency calls hydrogen a versatile
energy carrier, which can help to decarbonise a range of sectors,
including long-haul transport, chemicals, and iron and steel, where it
has proven difficult to reduce emissions.
In the U.S., the 2022 Inflation Reduction Act (IRA), the country’s
most comprehensive climate policy to date, provides huge amounts of
funding to the hydrogen industry. Before the introduction of the
policy, the U.S. was lagging behind in the green hydrogen industry, as
Europe took the lead, with the Middle East and other parts of Asia
following closely behind. The IRA authorised a tax
credit for hydrogen producers through the 45V programme, with a
value of up to $3 per kilogramme, depending on the carbon footprint of
operations. This financial incentive was aimed at encouraging
innovation in the sector to help lower the price of green hydrogen,
which is much more expensive to produce than fossil fuel-derived
hydrogen.
This month, President Biden and Secretary of the U.S. Department of
Energy Jennifer Granholm announced the seven regional hydrogen hubs –
H2Hubs – chosen to be awarded $7 billion in federal funding. Financing
comes from the 2021 Bipartisan Infrastructure Law. The H2Hubs are
expected to produce 3 million metric tonnes of hydrogen a year, or
around one-third of the country’s 2030 production target, aimed at
reducing emissions in industries that are hard to decarbonise. These
hubs are expected to reduce carbon emissions by around 25 million
metric tonnes a year, equivalent to taking 5.5 million cars off the
roads. They are also expected to boost the local economies of the
regions and create thousands of jobs.
Granholm stated:
“Unlocking the full potential of hydrogen – a versatile fuel that can
be made from almost any energy resource in virtually every part of the
country – is crucial to achieving President Biden’s goal of American
industry powered by American clean energy, ensuring less volatility
and more affordable energy options for American families and
businesses… With this historic investment, the Biden-Harris
Administration is laying the foundation for a new, American-led
industry that will propel the global clean energy transition while
creating high-quality jobs and delivering healthier communities in
every pocket of the nation.”
However, not everyone is so supportive of the widescale development of
U.S. hydrogen capacity. At present, green
hydrogen production accounts for just one percent of total U.S.
hydrogen production, with most projects continuing power production
with fossil fuels. The 45V programme is aimed at accelerating
low-carbon hydrogen production, whether it is green or grey – using
carbon capture and storage systems to reduce carbon emissions. But now
the Treasury must put rules and regulations in place to ensure that
hydrogen is produced using clean methods.
Jesse Jenkins, a professor of macro-scale energy systems at Princeton
University, stated,
“The IRA’s section 45V production tax credit is the most generous
clean hydrogen subsidy in the world.” She added, “But without proper
implementation, 45V could backfire, wasting a tremendous opportunity
for the United States to become a global leader in new clean
industries and causing a significant increase in domestic emissions
that imperil U.S. climate goals.”
Some climate experts believe that green hydrogen can only be
considered green if new renewable energy sources are developed to
power production operations, rather than using the existing grid and
questionable carbon accounting schemes. However, BP America disagrees
with this view, stating “Strict
additionality rules requiring electrolytic hydrogen to be powered by
new renewable energy is not practical, especially in the early years,
and will severely limit the development of hydrogen projects.”
Other energy experts believe that green hydrogen production detracts
from the direct use of renewable energy sources. Robert Howarth, a
professor of ecology and environmental biology at Cornell University, explained,
“Renewable electricity is a scarce resource. Direct electrification
and batteries offer so much more, and much more quickly. It’s a huge
distraction and waste of resources to even be talking about heating
homes and passenger vehicles with hydrogen.”
While there is significant optimism about the expansion of U.S. clean
hydrogen capacity, and there are high levels of funding backing the
sector, the widescale development of truly green hydrogen projects is
not so simple. There are several hurdles that the U.S. must overcome
to build a low-carbon hydrogen industry, with many energy experts
demanding better regulations to manage sectoral development and others
questioning whether this is the best use of the country’s renewable
energy sources.
By Felicity Bradstock for Oilprice.com
Green Play Ammonia™, Yielder® NFuel Energy.
Spokane, Washington. 99212
509 995 1879 Cell, Pacific Time Zone.
General office: 509-254 6854
4501 East Trent Ave.
Spokane, WA 99212
|
