First is the market in the context of large scale production for trade.
There’s always been use of hydrogen for industrial purposes but generally that has been produced on site either from electrolysis (for small amounts) or natural gas (large volumes).
In the context of using it as a fuel though, the market itself is uncertain given alternatives of the use of electricity directly or via batteries or using synthetic fuels.
Electric trains exist and are widely used. Hydrogen trains have been built but aren’t common. Synthetic fuel could certainly be done.
Battery powered buses have been built. Hydrogen also have been built. Synthetic fuel’s also an option.
And so on. How we’re actually going to move trains, ships, aircraft and even buses in the future is not yet resolved, there’s more than one alternative method in the mix and in some cases they directly compete. Pretty much any rail line can be electrified if we really want to for example, any use of hydrogen to power trains is competing against other ways of moving a train.
High grade industrial heat likewise. Hydrogen versus electric arc furnaces. Then there’s induction heating and for lower intensity uses simple electric resistance heating.
Even residential and general commercial use there are uncertainties as to what future role gas networks will really play. Some will argue none, we’re going fully electric, but there’s a lot of detail issues with that in itself. Dead easy in some places, far harder in others. Go to Europe with its high density living, limited capacity electrical networks and hydronic systems designed for high temperature water and retaining reticulated gas in some form looks relatively attractive.
Something to note there is that the technically (engineering) best solution isn’t necessarily the most practical in other ways. From a technical efficiency perspective the use of electricity wins over hydrogen but the commercial outcome may well be very different, technical efficiency isn’t always the best way once other factors are included and there are countless examples of that throughout the economy.
When it comes to anyone trying to put figures on the size of the market at this point in time, at best they’re basing it on an assumed scenario as to which technologies win out and are actually adopted or they’re talking only about one specific buyer not the market overall. At worst they’re just plucking numbers out of the air.
On the production side well hydrogen is an element and the product is the same regardless of how it’s obtained. Electrolysis of water or reforming of fossil fuels or biomass (especially natural gas – CH4) produce the same end product.
How to produce it is a question of resources, economics, environmental issues and politics. From a technical perspective the end product’s the same regardless.
Electricity as the source:
Electricity from whatever source + water > electrolysis > hydrogen and by-product oxygen. The oxygen if not wanted can be simply released to the atmosphere.
Natural gas as the source:
Natural gas (methane, CH4) + steam (H2O) at ~850’C under pressure reacts to produce hydrogen (H) and carbon monoxide (CO). Or to be more precise CH4 + H2O > CO + 3H2
Then CO from the first step + steam (H20) under pressure is reacted to produce hydrogen (H) and carbon dioxide (CO2). Or to be more precise CO + H20 > CO2 + H2
This process can be modified slightly to work with other hydrocarbon feedstocks such as ethanol and oil-based liquids.
Coal as the source:
Coal + Oxygen (O2) + steam (H20) > carbon monoxide (CO) + carbon dioxide (CO2) + hydrogen (H2).
Then second step with the CO + steam as per the process to produce hydrogen from natural gas.
Production from hydrocarbons produces a concentrated CO2 waste stream. Since this is concentrated it would be straightforward to simply inject that into a depleted gas reservoir rather than releasing it to the atmosphere. That’s unlike, say, the comparatively very dilute CO2 exhausted from the stack at a power station which is technically extremely problematic to capture and store.
Which brings me to the elephant sitting in the driveway:
Politics.
It’s not my intention to make a political comment as such but it has to be said. In the Australian context, anything relating to energy production and use is the issue politically. This is a country where we choose our Prime Minister based on their ideas about power generation – a situation that even those in the industry mostly seem to think has gone way too far and they’ve heard quite enough of but it’s reality.
Then there’s controversy over natural gas supplies to south-eastern Australia, gas exports from other states, how to supply oil so long as we’re still using it and so on.
Plus in some states water itself is subject to much the same politics with all manner of arguments, some true but many false.
I mention that because it seems rather likely that hydrogen will end up being caught up in all that indeed it involves the whole lot. It’s a gas made from electricity and water – that ticks a lot of boxes on the tribal politics checklist.
I’d be very cautious in investing for that reason. You don’t want to join the now rather long list of those who’ve got it right technically and economically but come unstuck politically when it comes to something involving energy.
Research the company and its projects very carefully and consider any political implications is my opinion there.
