Hydrogen: help or hype?

Hydrogen can be used for transport, as in this Toyota Mirai, a fuel cell electric vehicle (FCEV). However, due to energy losses in the process of creating and supplying hydrogen, they are less efficient than battery electric vehicles (BEVs).
Australia’s government is currently developing a strategy for including hydrogen in a future low-carbon energy system. Renew’s energy projects team has looked at where it has potential, and where it doesn’t.

Much is being made of the announcement that at the Tokyo Olympic Games next year, hydrogen will burn in the Olympic torch and even power the athletes’ village. By some accounts, in the not-too-distant future we’ll all be using this high-energy, ‘clean’ fuel to run our cars, heat our homes, cook our food and power our electric appliances. But as we transition to a low-carbon energy system, how much of this posited ‘hydrogen economy’ is realistic, and how much is hype?

Australian federal and state governments are working on a hydrogen strategy document to be completed by the end of this year. Renew’s energy projects team has been involved in the roundtable discussions for the strategy, and has developed a discussion paper exploring the areas in which hydrogen for energy has potential, and where it is better avoided in favour of more efficient alternatives. In this article, we take a brief look at some of the team’s findings.

What is hydrogen?

Hydrogen is a gas which burns very cleanly, leaving behind only water vapour. It can be used to generate heat or electricity, including for use in transport, with no greenhouse gas emissions. It can act as energy storage and can also be transported, opening the door for energy export. However, thus far its use for energy purposes has been very limited. Currently, it is produced from fossil fuels and used in industries such as metalworking, glass and electronics.

The main barrier to more widespread use has been obtaining the hydrogen—unlike fossil fuels there are no geological deposits; instead renewable hydrogen must be created by splitting water, a process that requires energy. (In fact, more energy must be expended to create it than the hydrogen contains.) Thus, hydrogen is only a carrier of energy rather than an energy source.

When produced using renewably generated energy such as solar and wind, hydrogen is a renewable, emission-free fuel. Its main downside is inefficiency, because the required conversions waste a lot of the original energy in losses.

Renewable energy for transport: Hydrogen vs batteries

A heavily promoted use of hydrogen is for transportation. In a fuel cell electric vehicle (FCEV), hydrogen from the car’s fuel tank is fed into a fuel cell which generates electricity. This is then stored temporarily in a small battery and used to power the car’s electric motor.

Because of the significant energy losses in the process of creating and supplying hydrogen, an FCEV is much less efficient than a battery electric vehicle (BEV) in which renewable electricity is used more directly via the car’s larger battery.

Figure 1 illustrates how energy losses accumulate for four scenarios all starting with newly generated renewable energy: an energy efficiency from generation to propelling the car of 53% to an impressive 77% for the battery vehicles, and just 15% to 34% for the fuel cell vehicles.

Figure 1. Electric vehicle efficiency. Scenarios modelled: 1. A battery electric vehicle (BEV) is charged at home from rooftop solar using a well-sized charger. 2. A BEV is fast-charged at night at a shopping centre using electricity generated at a remote wind farm as part of a 100% renewable grid. 3. A fuel cell electric vehicle (FCEV) equipped with a relatively efficient fuel cell is filled at a station with hydrogen produced with a high-efficiency electrolyser and compressor. 4. A FCEV equipped with a less-efficient fuel cell is filled at a station with hydrogen produced with lower-efficiency electrolyser and compressor.

Although these numbers include many uncertainties, when comparing the range of results in these four scenarios it’s clear that renewable hydrogen is an inefficient option to propel a vehicle, compared to using renewable electricity via a battery. Figure 2 presents this in a different way, showing how many more solar panels would be required for a daily 30 km commute using hydrogen and an FCEV than using a BEV.

FCEVs also face a chicken-and-egg problem; manufacturers won’t export them to Australia until there’s a refuelling network, but investors won’t build the fuelling stations until they’re confident of business.

The CSIRO is relatively optimistic about the economics of hydrogen for road transport (bit.ly/csiro-nhr), but its study considered only vehicles powered by fossil fuel rather than batteries, which are the real competitor for hydrogen vehicles. In a few years a BEV’s running cost will be much lower than a petrol car’s. Because of this and the relative inefficiencies of FCEVs, we conclude that Australia should not devote resources to a network of hydrogen refuelling stations. Such efforts should instead be devoted to chargers for BEVs.

Figure 2. Since hydrogen is a relatively inefficient carrier of renewable electricity, it requires more generators to supply it. For example, it would take five solar panels to power a battery electric vehicle (BEV) on a daily 30 km round-trip commute (in Sydney, on an annual average basis). On the other hand, a fuel cell electric vehicle (FCEV) would require 14 panels to generate the hydrogen needed for the same commute: 2.8 times as many as the BEV. This is based on averages of the ‘high’ and ‘low’ scenario efficiencies in Figure 1.

Hydrogen in homes and businesses

Natural gas is widely used in Australian homes and businesses for space heating, hot water and cooking. It has traditionally been considered a cheaper and ‘greener’ option than the electric alternative, but this is no longer the case as gas tariffs have risen and efficient electric appliances have been developed. As gas becomes increasingly sourced from coal seams and grid electricity from wind and solar, natural gas will become a liability in the context of reducing emissions.

It’s possible to pipe renewable hydrogen to gas appliances instead, but this has many downsides. Existing gas appliances must all be replaced, as well as valves, meters and so on. Appliances could not be replaced gradually—rather installation must coincide with the gas change-over. We don’t believe this is a realistic prospect; in addition, CSIRO projections indicate that compared to natural gas, consumer bills would increase with hydrogen.

We contend that for powering homes and businesses, efficient electric appliances are a much better option than both fossil natural gas and hydrogen. (Although we note that renewable hydrogen gas may make sense for some large businesses with industrial processes in which electricity is no substitute.)

Hydrogen as exportable energy

One area where a hydrogen industry has significant potential is as exportable energy. For example, Japan is energy-poor and currently relies almost entirely on imports of fossil fuel and uranium, much of it from Australia. It has little suitable land available to host solar farms or wind farms. Japan’s response is a strategy to move toward hydrogen for energy, which states that by 2030 the country will develop supply chains to import 300,000 tons of hydrogen annually. The clear intent is to import multi-use hydrogen generated from renewable energy rather than from fossil fuels, to meet Japan’s commitment to the Paris agreement. Korea and China may adopt similar strategies.

In contrast to Japan, the Pilbara region of Western Australia has an enormous, high-quality renewable energy resource but no significant market, as the remote area has no transmission line to Perth, let alone the eastern states. A massive project, the Asia Renewable Energy Hub, is in early-stage development. It aims to generate electricity from wind and solar and use it to produce renewable hydrogen for export. Allowing for cost reductions over the next several years, the developer claims that it will produce “the cheapest power in Asia”.

Australia has a great opportunity to develop an industry to export renewable hydrogen (possibly in the form of ammonia, see box) and meet global demand. We are the world’s largest exporter of fossil natural gas; in a future where the world stops burning fossil fuels, our hydrogen exports could displace those of coal and gas.

Producing renewable steel

Coal is important in traditional steel refining processes not only for its heat but also for its carbon, some of which ends up in the steel. Unfortunately, emissions are high: iron and steel manufacture is responsible for 7% to 9% of all direct emissions from fossil fuels. One way to produce emission-free steel is using hydrogen: a pilot plant is currently under construction in Sweden to test the technology.

Since Australia is currently a major exporter of both iron ore and energy, in a future low-carbon world it would seem logical to develop a local industry processing iron ore into steel, using renewable hydrogen. This adds value to the raw commodity, saves energy and cost by transporting a more compact product and reduces energy consumption by our customers, making it easier for them to achieve their own fully renewable energy supply.

Inter-seasonal energy storage

As we progress to a future high-renewable grid, energy will need to be stored in large quantities ready for supply during periods of low generation due to cloudy, calm weather. The Snowy Hydro 2.0 pumped hydro facility will meet some of this requirement, since it can supply as much power as a large coal-fired power station for a whole week. However, this asset alone will be insufficient.

One option to boost energy storage is to create renewable hydrogen whenever there’s an oversupply of wind and solar generation. It could be stored for long periods (in salt caverns, or potentially in facilities such as the Iona Underground Storage Facility, a depleted gas field near Port Campbell, Vic, currently used for storing fossil natural gas) and used to generate electricity when required.

Supporting renewable microgrids

On a smaller scale, hydrogen could displace diesel as a backup for off-grid communities supplied by solar and wind.
A prime example is the Daintree region in far north Queensland; the federal government has granted nearly $1 m to design and plan a solution for a local electricity grid including a solar farm and hydrogen storage. Such projects have great potential to reduce diesel consumption, and hydrogen’s inefficiency is not so important in situations where excess renewable energy is otherwise wasted.

Ammonia: Hydrogen in disguise

Shipping hydrogen is very challenging-It must be either pressurised or liquefied, and both option involve heavy energy losses and other practical difficulties. An alternative is to create and transport ammonia. This gas can be produced from renewable hydrogen, shipped more easily in a standard type of ship much more efficiently than hydrogen, and then converted back or used as a fuel itself. It emits no carbon dioxide when burnt.

Figure 3 illustrates two options to supply enough renewable, stored energy to power one million Japanese homes: an 11.5km square local solar farm plus a pumped hydro facility, and a 14.7km square solar farm in the Pilbara providing energy to create hydrogen-rich ammonia that is shipped to Japan and burned in a turbine to generate electricity.

Although efficiency losses mean a larger scale solar farm is required for the Pilbara option, land there is cheap and and abundant compared to Japan, and this option is attractive.

Figure 3. Two options to supply renewable, stored electricity to 1 million Japanese homes.


So, is hydrogen a help or just hype? As with most things, the answer lies somewhere in between, and there are various pitfalls and issues requiring consideration.

For a fast transition to a low-carbon energy system, we must make maximum use of renewable energy such as wind and solar. The most efficient use of renewable electricity is to employ it directly via transmission lines or via energy storage. If it’s converted into hydrogen, much of its energy is lost in the process; thus, hydrogen should be used only where more direct methods are not practical. For example, for road transport we believe resources should be devoted to battery electric vehicle chargers rather than to a network of hydrogen refuelling stations for FCEVs.

Proposals exist to supply hydrogen produced from fossil fuels. Such proposals have been termed ‘brown hydrogen’ and should be viewed critically for their impact on climate change. Most make little sense, as oil, gas and black coal are easier to handle and transport than hydrogen. A variant is ‘blue hydrogen’, which still uses fossil fuels but adds the unrealistic suggestion of carbon capture and storage (CCS) to clean up its emissions.

Water consumption is significant: it takes nine litres of water to produce a kilogram of renewable hydrogen. The impact on our water supplies can be managed by using recycled water and desalination, but this will increase hydrogen’s cost over currently published estimates. Also, safety issues must be managed when transporting hydrogen or ammonia.

However, renewably generated hydrogen is potentially useful in several niche applications as summarised in Table 1.

For export to energy-poor countries, hydrogen’s inefficiency is countered by Australia’s high-quality renewable resources and abundance of land. In a low-carbon future, hydrogen could replace our present fossil fuel exports. To ease shipping challenges, hydrogen may be converted into ammonia.

Within Australia, hydrogen may be very useful for inter-seasonal storage as we approach a fully renewable electricity grid, and perhaps to supplement solar and wind power for off-grid communities.

For deeper analysis and references, please refer to the discussion paper on our website: renew.org.au/research/hydrogen-help-or-hype
Energy exportsYes, e.g. to energy-poor Japan. Possibly in the form of ammonia.
Inter-seasonal energy storageYes. Supplementary supply during cloudy, calm weeks.
Industrial, e.g. producing steelYes. Longer-term priority.
Road transportOnly in niche roles. Battery electric vehicles are much more efficient.
Main electricity supplyNo. More direct use of renewable generation is more efficient.
In homes and businessesNo. Efficient electric appliances are much more economic.
Table 1. Potential uses of renewable hydrogen


About the author
Andrew Reddaway is an Energy Analyst in Renew’s Energy Projects team.
Other reports
Briefing paper: Gas-free suburbs for Geelong

Briefing paper: Gas-free suburbs for Geelong

Well-overdue changes to the Victorian Planning Provisions and Plumbing Regulations would open the way for Geelong’s first gas-free suburbs.

Read more
Creating Victoria’s First Gas-Free Suburbs

Creating Victoria’s First Gas-Free Suburbs

Cleaner, cheaper power for new homes, and the regulations holding us back. Read the report from Environment Victoria and Renew.

Read more
Creating Victoria’s First Gas-Free Suburbs

Creating Victoria’s First Gas-Free Suburbs

Cleaner, cheaper power for new homes, and the regulations holding us back. Read the report from Environment Victoria and Renew.

Read more