TECHNO-ECONOMIC ASPECTS OF THE GLOBAL HYDROGEN TRANSITION

1 History of Energy Transitions

The world is today at the cusp of a tech-driven fourth industrial revolution, involving automated AI / IOT enabled manufacturing systems, high speed wireless telecommunications and globally interconnected computer networks. To succeed, this growth model will need vast supplies of uninterrupted electric power. The nature and scale of energy demand during this ongoing transformation of manufacturing and service economies is different from what Mankind experienced during the earlier phases of industrialization. In this context, it is enlightening to examine the pattern of global energy transitions during the early industrial revolutions and the post-World War II, technology driven, modern economic transformations. Each transition can be linked to distinct techno-economic drivers.

The early industrial age is generally believed to have begun with the development of the rotative steam engine by James Watt around 1765 and stretched till the mid-nineteenth century. This period was characterised by the utilisation of machines in large scale manufacturing processes and the use of steam engines in road transportation and railways. These transitions happened in Great Britain, Europe, and the United States. The gradual industrialization of agrarian economies was accompanied by the first major energy transition from Wood and Hay to Coal, which was needed to drive steam engines that powered industrial machinery. Coal was also used for making Steel and Chemicals. With time, the rapidly growing industrial economies sought raw materials, fuel, and newer markets to sustain their growth, capital requirements and profitability. This led to exploration and competition to secure resources and markets in other countries and continents. The early industrial revolutions thus laid the foundations for globalization of supply chains for goods, services, and energy.

The second important energy transition, ushered in during the late-nineteenth century, was powered by the development of liquid fuelled internal combustion engines and commercial deployment of electrical energy. The discovery of crude Oil and Gas, and rapid technological developments in refining and petrochemicals, fertiliser, transportation, and power sectors, that utilised petroleum feedstocks and fuels, brought Oil and Gas into the centre of the energy landscape. Subsequently, the demands imposed by the first world war, coupled to increasing adoption of industrial, urbanized models of livelihood, propelled a dramatic growth in the hydrocarbon sector. By the middle of the twentieth century, Oil and Gas had replaced Coal as the dominant fuel.

The heady momentum of industrial growth and rapidly improving prosperity of industrialized nations attracted other developing countries along the path of large scale, energy intensive industrialization. The industrial revolution had demonstrated that technology and innovation driven industrialization could provide the means for many developing countries to lift their populations out of poverty in a few generations.

The post-world war-II advancements in multiple dimensions of technology marked the entry of high-speed telecommunication and digital technologies into the mainstream and the internet brought the benefits of information technology to every doorstep. The world, it was said, had shrunk into a global village, with instant information flows making physical distances irrelevant for communication and business. In terms of the energy mix during this era, Nuclear power was a major new entrant. Sustainability of fossil fuel-based energy sources became a matter of collective debate around 1956 when the Peak Oil theory was proposed. A few years later, the formation of OPEC shifted the geopolitical balance and the nature of global Oil trade. The resulting Oil supply crises faced by industrialized economies brought sharper focus onto topics like renewable energy and energy conservation.

2 Industry, Environment and Sustainability

The overwhelming focus on production and excitement about Mankind’s perceived technical prowess in harnessing the forces of nature, as well as growing prosperity in the industrialized world, however, may have clouded recognition of issues related to environmental degradation that accompanied large scale industrialization. The generations recovering from World-War-II were keen to prosper from the modern industrialized way of life. Environmental issues appeared to be relegated to the periphery of public consciousness. The publication in 1962 of Rachel Carson’s hugely influential book, ‘’Silent Spring’’[2], describing the deleterious ecosystem effects of chemical pesticides, galvanized public and governmental action in the USA and made pollution control an important consideration in industrial growth .

In terms of the sources of energy that propelled industrial growth during the early industrial eras, it was availability and cost that determined the types of fuel that were utilised for industrial, transportation and domestic purposes. Environmental focus became important much later, when the adverse effects of industrial pollution became increasingly visible. The Environmental Protection Agency of USA was established as late as December,1970, by which time much of the world had embraced large-scale industrialization.

The Clean Air Act of 1970 USA, and similar legislation throughout the industrialized world made it imperative for industries to move towards cleaner sources of energy. The initial push towards clean fuels focussed on mitigating particulate pollution, photochemical smog, acid rain and eliminating carcinogens. This led to cleaner Diesel and Gasoline being mandated and better technologies for Coal combustion being commercialized but fossil fuels continued to dominate the global energy scene.

While the capital driven industrial growth model clearly delivered rapid global economic development, it was not long before fundamental questions of sustainability, rooted perhaps in Malthusian doctrines, were being debated at the highest policy making levels. Industrialization coupled with population growth and environmental degradation raised valid concerns about the world running out of resources to support future generations.

In 1972 the world’s first authoritative report on sustainability, titled “Limits to Growth” was published under the aegis of the Club of Rome. The report was based on computerized analysis and projections of environmental impacts of growth based on factors such as increasing populations, agricultural output, non-renewable resource depletion, industrial output, and pollution till year 2100. The international research team at the Massachusetts Institute of Technology, which prepared the report, examined alternative models for economic growth. They concluded that the current pattern and rate of resource depletion and population growth, including effects of pollution are not sustainable and uncontrolled collapse is possible within this century. Incidentally their computer models also indicated that increasing Carbon Dioxide emissions could cause climatological impacts through a warming effect[3].

3 Global warming and Climate change

Although pollution control and energy conservation were the main concerns of post-war industrialization, the debate shifted significantly in the 1980s, when changing weather patterns were linked to global warming on account of greenhouse gases accumulating in the atmosphere. The fact that Carbon Dioxide accumulated in the atmosphere could trap heat was already well known at that time. In fact, as far back as 1896, Swedish chemist Svante Arrhenius had quantified the role of CO₂ and warned that burning of Coal could cause an increase in atmospheric Carbon levels over time. The first political leader of note in the USA to highlight this issue was President Lyndon Johnson who in 1965, in an address to the US Congress stated that: “This generation has altered the composition of the atmosphere on a global scale through … a steady increase in Carbon Dioxide from the burning of fossil fuels.” More than two decades later, in 1988, another notable political figure, then British Prime Minister Margaret Thatcher, told the United Nations: “The problem of global climate change is one that affects us all and action will only be effective if it is taken at the international level. It is no good squabbling over who is responsible or who should pay.” Eventually, the same year (1988) the Intergovernmental Panel on Climate Change (IPCC) was set up by the United Nations, to assess the problem based on scientific evidence [4].

Global political consensus for concerted action, under the UN framework, to control greenhouse gases was formalised by the non-binding UN Framework Convention on Climate Change (UNFCC), ratified in 1992. Subsequently, in 1997, the Kyoto protocol saw the developed nations agree to reduce their greenhouse gas emissions on average by at least 5 percent below 1990 levels by 2008-2012. Unfortunately, perhaps the global financial crisis and recession of 2008 led to these goals losing priority as more fundamental short-term economic issues were at stake. Still, when the Kyoto protocol expired in 2012, more than 190 nations met in Durban, South Africa, to negotiate money for a Green Climate Fund so that developing Nations could invest in sustainable models of development rather that follow the economic models that the industrialized nations had used during their growth. Ultimately, a common vison on the way forward emerged at the 26th  Conference  of  the  Parties  (COP26)  of  the UNFCC at Glasgow in November 2021 [5].  The broad consensus at COP26  resulted in the Glasgow Climate Pact 2021, representing commitments by 140 countries to achieve Net Zero Carbon Dioxide emissions (NZE)  by 2050.

4 Decarbonization and The Role of Hydrogen

The vision of NZE by 2050 is already being operationalised by  existing and emerging  market mechanisms that incentivise reduction of Carbon footprint and penalise Carbon emissions. Mandatory ESG performance requirements and  avoidance of potential Carbon tax issues are factors motivating multination corporations to invest in greening their operations, across their supply chains.

Among all fuels, Hydrogen is the only energy carrier that can be combusted without production Carbon Dioxide. The end product of combustion is Water which is an essential ingredient for life on Earth. Hydrogen is also abundant and renewable at a global level through the Water cycle. The technologies and norms related to production and utilisation are well established. In June 2019 the International Energy Agency , in their presentation to  the powerful G20 grouping suggested that Hydrogen has excellent potential to contribute to  a sustainable, decarbonized energy future for the World [6].

In their 2021 Global Hydrogen Review [7], the IEA noted encouraging progress on the implementation of Water Electrolyser projects, essential for making the transition to Green Hydrogen. There are currently about 350 projects under development that could lead to installed capacity of 54 GW by 2030 and another 35 GW at early development stage. All this can produce 8 million tonnes of green Hydrogen which is about 10% of the  target of 80 million tonnes to meet NZE goals.

5 Hydrogen Production and Consumption Status

5.1 Production

Estimated annual world production of Hydrogen is about 115 million tonnes, of which 70 million tonnes is pure Hydrogen and 45 million tonnes of Hydrogen is produced in combination with other gases. Of the 70 million tonnes of pure Hydrogen manufactured globally, 76% is estimated to be produced from Natural gas, about 23% from Coal gasification and the balance is from electrolysis of Water. Fossil fuel-based Hydrogen production annually consumes around 205 billion m3 of natural gas (6% of global natural gas use) and 107 Mt of coal (2% of global coal use), with Coal use concentrated in China [6]

It may be noted that that during the economic slump induced by the COVID pandemic, Hydrogen production also dropped significantly. Any crystal-gazing exercise into the future of Hydrogen, therefore, must be subject to the caveat that the economic trajectory of the world is becoming volatile and unpredictable.

5.2 Consumption

Historically, the primary users of pure Hydrogen have been Crude Oil Refineries and Ammonia plants, the two sectors together  contributing  60 percent to the global demand. Hydrogen is also used in the manufacture of Methanol (via Syngas) and in the metallurgical industry, it is mixed with inert gases to obtain a reducing atmosphere in heat treating furnaces. The current pattern of global demand for Hydrogen and the main production sources are summarized in Figure 2:

In the future, as the world transitions towards increased use of Hydrogen as an energy source, the additional consumption is expected to be mainly from power production, transportation and building heating sectors.

6 Technologies for Hydrogen Production

Current Technologies for Hydrogen Production can be visualized in terms of three categories as follows:

• Technologies using Fossil fuels as feedstock: This comprises production technologies to manufacture Hydrogen From non-renewable, hydrocarbon deposits such as Crude-Oil, natural gas, and Coal
• Technologies using renewable hydrocarbon feedstock: example include Hydrogen manufacture from biomass or from biogas
• Technologies based on splitting pure Water: example are the use of electricity or other forms of energy from green sources to split Water into Hydrogen and Oxygen.

Table 1 summarizes current Hydrogen production methods and the level of commercial maturity.

Hydrogen from fossil fuels can leverage huge existing infrastructure, while green Hydrogen based on splitting pure water can provide a zero-carbon energy pathway to the COP26 Net Zero goal. Hence these are the main Hydrogen production technologies that will drive the energy transition and are described in more detail in the following sections.

6.1 Hydrogen from Fossil Fuels

The main commercial technologies for Hydrogen production using feedstocks sourced from fossil fuels are:

• Steam Methane reforming (SMR)
• Autothermal Reforming (ATR)
• Partial Oxidation (POX)

The above technologies are described in more detail in the following sections.

Steam Methane Reforming

SMR technology is used to produce Hydrogen from light Hydrocarbon feedstocks such as Methane, Naphtha, and refinery off gases. When the objective is to produce high purity Hydrogen, either for captive consumption or sales, SMR is the most widespread technology in the Process industry.

Process Overview [9]

The steps involved in producing Hydrogen by SMR technology are:

• Feedstock purification
• Pre-reforming (optional)
• Steam Reforming
• Water-gas Shift Reaction
• Raw Hydrogen Purification

Feedstock purification:

This involves removing impurities that can poison or otherwise reduce the effectiveness of the reforming catalyst. These are primarily Sulphur and Chloride containing compounds. The feedstock purification step involves Hydrogenation of feedstock to convert the Sulphur and Chloride impurities into H₂S and HCl respectively. The reaction temperature is about 350 to 370 degrees Centigrade and H₂S and HCl vapours are subsequently adsorbed in a packed bed adsorber that contains Zinc Oxide, to remove H₂S and Sodium Alumina to remove HCl.

Pre-Reforming (optional)

For capacities larger than 60,000 Nm³ /hr of Hydrogen, or for heavier feedstocks, a pre-reformer may be added, to reduce the size and heat duty of the main reformer. This converts heavier (C2+) hydrocarbons to a mixture of CH₄, CO₂, CO, and H₂O. The reaction is carried out at about 500 degrees Centigrade using a Nickel based catalyst.

Steam Reforming:

The next step is Steam reforming (SMR). In the Steam Reformer, Methane and higher hydrocarbons react with steam in a series of reactions using a Nickel base catalyst, resulting in Hydrogen liberation from hydrocarbons as well as from Water. The reaction is endothermic and needs external energy to maintain temperatures between 800 to 880 degrees Centigrade, at pressures between 20 to 30 barg. The gas stream leaving the reformer is a mixture of Hydrogen (H₂), Carbon monoxide (CO), Carbon dioxide (CO₂), Methane and Water. This mixture is termed Syngas.

Typical reactions that occur in the reformer are

All the reactions are equilibrium that are driven to the right by high temperatures and the use of catalyst. High temperature Syngas is cooled by using boiler feedwater which is used to generate Steam that feeds back into the process or is exported.

Water-Gas Shift reaction:

The CO and Water in Syngas undergo a Water Gas shift reaction to form CO₂ and H₂ in the shift converter. This is an exothermic, equilibrium rection that utilizes Chromium-based catalysts.

In the older plants which did not use PSA the shift reaction was conducted in at least 2 stages, a high temp stage (HT shift) to maximize reaction rate and convert most of CO down to about 2.5 mole %, followed by a low temperature (LT shift) stage that favours complete conversion of CO (down to 0.2 mole%) The HT shift operates at 340-370 degrees Centigrade and LT shift at 230 degrees Centigrade.   However, with the advent of PSA technology and the use of PSA tail gas as fuel to reduce fuel purchase costs for reformer, it is not worthwhile to invest on an LT shift stage. The CO and some residual hydrogen in PSA tail gas provide calorific value for the reformer burners and thereby get converted to CO₂ and Water.

The gases leaving the shift reactor are then cooled down to about 35 to 40 degrees Centigrade via heat recovery systems, before going to the PSA unit for H₂ and CO₂ separation. The PSA unit can deliver high purity Hydrogen (99.999%) and Hydrogen recovery varies between 70 to 95 %.

Autothermal Reforming

ATR uses Oxygen and Steam with direct firing in a refractory-lined reactor with a catalyst bed (Oxy-Steam Reforming). Like SMR, it requires feed gas pre-treatment and a fired heater to preheat the feed, that produces CO₂ emissions via flue gases. In the ATR, natural gas feed is mixed with Steam and pure Oxygen at the top of the reactor. In the combustion chamber, partial oxidation reactions take place which provide heat for endothermic Steam reforming reactions. The term auto-thermal refers to the fact that the right mixture of fuel, air and Steam, partial oxidation reaction supplies the necessary heat required to drive the catalytic steam methane reforming reaction. In the lower section of the reactor (loaded with reforming catalyst), the Steam reforming and shift conversion reactions occur as the gas passes through the fixed bed, generating syngas mixture of H₂ and CO. High feed preheat temperatures reduce Oxygen consumption, lower CO₂ in the product gas and improve the H₂ /CO ratio. The operating temperature in the ATR is higher than for SMR. PSA tail-gases provide fuel for the feed pre-heater burners.

The ATR reformer is smaller than the corresponding SMR reformer, since an external combustion furnace is not required. The ATR also requires significantly less energy that the SMR for the same hydrogen production rate.

Process Overview [9]:

The steps involved in producing Hydrogen by ATR technology are:

• Air Separation
• Feedstock purification
• Pre-reforming (optional)
• Auto-Thermal Reforming
• Water-gas Shift Reaction
• Raw Hydrogen Purification

Air Separation:

Air is separated into Oxygen and Nitrogen by Pressure Swing Adsorption or by Cryogenic distillation, depending on the size of the facility.

Feedstock Purification:

The requirements of feedstock purification and the purification process for ATR are identical to SMR.

Pre-reformer (optional)

The considerations for adding a pre-reformer are same as discussed for the SMR.

Auto-Thermal Reforming

The ATR vessel is a refractory lined unit fitted with a burner, that integrates the combustion chamber and reforming reactor into a single equipment. Preheated Hydrocarbon feedstock, Steam and Oxygen are fed into the combustion chamber via the burner placed at the top, where partial Oxidation and combustion reactions occur.

The partially oxidized gases then flow downwards into the catalyst loaded reaction zone where Syngas is formed. The main reactions in the ATR areas below:

• Combustion Zone:

• Catalytic Steam reforming Zone:

Water-Gas Shift Reaction

The reaction chemistry of Water-gas shift in ATR is similar to SMR. However, partial Oxidation in the combustion chamber within the ATR contributes a higher load of CO to the shift reactor in comparison to SMR. The temperatures in the ATR are also higher than SMR and this shifts the equilibrium to the left, resulting lesser H₂ production. Overall, the CO to H₂ ratio is higher when compared to SMR.

Raw Hydrogen Purification

The considerations for adding a PSA unit for Hydrogen recovery are identical to the SMR.

Partial Oxidation

The principle underlying Partial Oxidation (POX) is that when carbonaceous feedstocks are combusted with sub-stoichiometric levels of Oxygen in the presence of steam, then Syngas is produced. Syngas is a valuable intermediate for the manufacture of many chemicals. Syngas from a gasifier is a mixture of CO, CO₂, H₂O and H₂, plus impurities like H₂S ,HCN, CO₂, COS, NH₃. For the purpose of Hydrogen production, it is possible to separate Hydrogen as a pure product using Pressure Swing Adsorption.

Unlike Reforming technologies, POX can handle impure, low grade carbonaceous feedstock in solid, liquid, or gaseous forms, to produce Syngas. In comparison with reforming, more CO is produced with H₂ to CO₂ ratios ranging from 2:1 to 1:1. Large scale POX plants are used to gasify fossil fuels such as Coal, Naphtha, Natural gas, LPG, Residual oils, and Petroleum coke.

Process Overview[9]

The steps involved in producing Hydrogen by POX technology are:

• Air separation (when using O2 instead of Air)
• Feedstock Storage, handling, and preparation
• Gasification (POX)
• Syngas processing/Water-Gas Shift
• Tail gas treatment and sulphur recovery
• Hydrogen purification

Air Separation:

Gasifiers can use Air or Oxygen for POX, depending on the reactor, type of feedstocks and purpose of the final product. When the objective is to recover Hydrogen in large quantities, the use of Oxygen is more economical. A cryogenic Air Separation Unit (ASU) is typically used to produce large quantities of Oxygen for use in the POX gasifier. The cryogenic ASU separates air by cryogenic distillation, into Liquid Oxygen and Nitrogen. The liquid Oxygen is pumped to the gasifier.

Pressure Swing Adsorption technology can also be used to separate Air into Nitrogen and Oxygen. It  is typically used at smaller capacities and where Nitrogen is also used in the process.

Feedstocks storage , Handling and preparation

Especially in the case of solid feedstocks, materials receipt, storage yards, material handling, feedstock preparation and pressurisation equipment, dust control and fire protection systems involve significant deployment of infrastructure and resources. Liquid feedstocks are stored in tank farms and pumped to the gasifier. Gaseous feedstocks are the cleanest and can be supplied by pipeline.

Gasification

The key reactions that occur during the gasification process are:

To reach the typical gasification temperatures of 1300 to 1500 degrees Centigrade, a portion of the feedstock is combusted fully to liberate heat of combustion according to the following equation:

The sulphurous compounds contained in the gasified raw materials are converted into H₂S and COS (Carbonyl Sulphide).

Gasification temperatures can be reduced to 700 to 1000 degrees Centigrade by using catalysts in a process termed catalytic partial oxidation (CPOX) which is being studied for cleaner feedstock. With low grade feedstocks, catalyst gets poisoned and Carbon deposits are also a problem.

Commercially available gasification equipment can be categorized into:

• Fixed bed gasifiers
• Moving bed gasifiers
• Fluidized bed gasifiers
• Entrained Bed gasifiers

Entrained bed gasifiers are the preferred option for Hydrogen production. The entrained bed involves co-current flow of feedstock with the oxidising agents (O₂ and Steam). The short residence times ranging from 0.5 to 5 seconds and high temperatures of 1300 to over 1500 degrees C, ensure very little unconverted hydrocarbon. There are two variations in the waste heat recovery mechanisms offered by various licensors of entrained bed gasifiers. Some licensors offer Waste heat Boilers (WHB) for recovering heat from hot Syngas, generating high pressure steam. Others perform Water quench inside gasifier, and the enthalpy of hot quenched fluids is used to generate medium and low-pressure Steam. In this case, quench Water also provides additional Water to increase the H₂ to CO ratio via the Water-Gas shift reaction. Solids are also removed effectively from Syngas, which helps in downstream operations.

Two type of feed systems are available for solid feedstocks. Slurry feed systems involve pulverizing the solid feedstock, forming a slurry with water, and pumping into the gasifier. Dry feed systems involve pneumatic transport of pulverized feed. Though Water handling and evaporation duty in gasifier is avoided in dry feed systems, dry dust explosions are a safety hazard.

Syngas from the gasifier contains impurities including acid gases like H₂S and CO₂, as well as COS Mercury, Hydrogen Cyanide and Ammonia which need to be removed before the final purification and recovery of Hydrogen.

The raw Syngas needs to undergo shift conversion to increase the Hydrogen content. While Sour Gas shift of impure Syngas is practised when selective H₂S and CO₂ removal is sought, catalyst poisoning is minimised if the gas is cleaned first, termed Clean Shift. The Clean Shift operation involves first sending Syngas  to the Acid Gas Removal unit (AGR ), where proprietary  solvent-based processes are used to remove H₂S and CO₂.The cleaned Syngas is then sent to the Water-Gas Shift converters.

Sulphur Recovery

H₂S containing waste gases from the AGR are sent to the Sulphur Recovery Unit (SRU), which is based on the Claus Process. Elemental Sulphur is recovered here.

Mercury Removal

If the Syngas contains Mercury, then this is typically removed prior to the AGR. Sulphur impregnated Activated Carbon beds can remove all the Mercury. The Carbon beds will be considered as hazardous waste when fully exhausted.

Water-Gas Shift Reaction

The chemistry of shift conversion is similar to that in the ATR process and is performed in 2 stages, namely HT shift and LT shift.

Hydrogen Purification

Similar to the SMR and ATR processes, pure Hydrogen is recovered using Pressure Swing Adsorption (PSA) from the Hydrogen enriched gases leaving the LT shift converter.

Figure 4 summarizes the key features of the three main fossil fuel-based Hydrogen production technologies .

6.2 Green Hydrogen Technologies

Green Hydrogen is the term used to describe Hydrogen manufactured using renewable energy to split Water. The current focus is on splitting Water using electrolysis, for which the renewable power sources may be Solar, Wind or Hydel. Hydrogen serves as a non-carbonaceous energy storage and delivery medium since renewable energy sources like Wind and Solar are intermittent in nature. The two electrolyser technologies of commercial importance at present are Alkaline electrolysers (AWE) and Polymer Electrolyte Membrane Cells (PEMC). Alkaline Water electrolysers use an alkaline solution (of sodium or potassium hydroxide) that acts as the electrolyte. PEM electrolysers use a solid specialty plastic material as electrolyte instead of an alkaline (KOH) electrolyte.

Features of an Electrolyser system

An electrolyser is a device that splits Water into Hydrogen and Oxygen, using electricity. In an electrolysis cell, the electrodes which carry electricity also function as catalysts, enabling the water splitting reaction to proceed with reduced energy consumption. Electrical energy to split Water supplied from a DC power supply at high voltage.

The key parts of an electrolyser cell are:

Electrodes: Electrons flow from the external DC power source flow into each electrolytic cell at the Cathode and are removed from the electrolytic cell at the Anode. In other words, Reduction (i.e addition of electrons) of ionic species within the fluid takes place at the Cathode and Oxidation (i.e removal of electrons occurs at the Anode.  Both Anode and Cathode are coated with catalytic materials to speed up the oxidation and reduction reactions respectively.

Electrolyte: An electrolyte is a material that allows ions such as H⁺ and OH^– to flow between Cathode and Anode but does not permit electrons to flow. The electron current is therefore restricted to the external circuit. The electrolyte may be acidic, alkaline, or neutral.

Separator: The Anode and Cathode must not be allowed to come in contact within the electrolyte. Hence a separator is used that permits ionic current to flow but prevents physical contact between the electrodes.

Containment shell:  Steel containment shell to maintain mechanical integrity at the range of operating pressures.

An electrolyser cell system typically includes several individual cells arranged in one or more stacks with reactant Water flowing through the cells via input and output conduits formed within the stack structure. Apart from the Stack the overall system requires many other equipment, termed Balance of System (BOS) or Balance of Plant (BOP) which comprise at least the following:

• AC-DC Power supply and control
• Feedwater treatment
• Hydrogen conditioning and storage
• Oxygen conditioning and storage
• Cooling system
• Instrument Air system
• Interconnecting piping valves and fittings
• System controls and safeguarding

7 Economics of Hydrogen Production

7.1 Grey and Blue Hydrogen

Hydrogen production by Steam Methane Reforming , termed “Grey Hydrogen” when produced without CO₂ capture, is currently the most economical method of producing pure Hydrogen. The current CAPEX for an SMR  of 100,000 Nm3/h pure Hydrogen Capacity would be around 240 million USD [10]. The corresponding CAPEX for ATR and POX based Hydrogen plants would be higher due to additional equipment such as the air-separation plant. The OPEX for an SMR is mainly driven by feedstock and fuel costs, typically of the order of  35% of CAPEX.

“Blue Hydrogen” is the term used to describe Hydrogen manufactured by SMR/ATR/POX in combination with CO2 Capture and Sequestration (CCUS). Both CO₂ capture (from flue gases) and CO₂ sequestration systems are major CAPEX and OPEX items similar in magnitude to the SMR.

7.2 Green Hydrogen

Currently the costs of electrolyser and cost of power are the two major components that make Green Hydrogen unviable when compared to Grey Hydrogen. The intermittent nature of renewable power also makes it difficult to achieve  a high plant load factor. Electrolysis also requires high purity Water which increase the OPEX. Typical projections for CAPEX, OPEX and cost of Hydrogen, are provided in figures 5 and 6. For 10 MW modules, AWE and PEMC electrolyser costs (excluding BOP) are projected between 600 to 800 USD/kw. Green Hydrogen is projected to cost between USD 4 to 8 per kg whereas grey Hydrogen cost less than USD 2 per kg

8 Techno-Economic Barriers to H2 Transition 

Some key main challenges that need to be overcome to enable successful large-scale transition to Hydrogen are:

• Hydrogen transportation, storage, dispensing infrastructure not developed at global scale, huge investments needed
• The Power sector is still heavily dependent on fossil fuels as the recent Ukraine crisis revealed, in Europe.
• Power costs ,electrolyser costs need to decrease significantly for Green Hydrogen to be commercially attractive.
• Safety issues: Storage, handling, and transportation of Hydrogen poses unique safety risks due to the following attributes:
• Low density
• High flame speed
• Low ignition energy
• Wide range of explosive concentrations
• Temperature rises on expansion (J-T inversion)
• Hydrogen embrittlement of steel
• Polymer Degradation/explosive decompression

9 References

1. Hydrogen Production Technologies Overview, Journal of Power and Energy Engineering, 2019, 7, 107-154; by Mostafa El-Shafie, Shinji Kambara, Yukio Hayakawa
2. Silent Spring, by Carson, Rachel (1962), Houghton Mifflin Company, First Edition.
3. The Limits to Growth: A report for the Club of Rome’s Project on the Predicament of Mankind (1972) by Donella H. Meadows, Dennis L. Meadows, JΦrgen Randers and William W. Behrens III.
4. Timeline: How the world discovered global warming, Reuter article(Dec 2, 2011) / Timeline: How the world discovered global warming | Reuters
5. Net Zero by 2050 A Roadmap for the Global Energy Sector , IEA, May 2021 / Net Zero by 2050: A Roadmap for the Global Energy Sector – Event – IEA
6. The Future of Hydrogen Report: Seizing today’s opportunities,Prepared by IEA for the G20, Japan, June 2019 / The Future of Hydrogen: Seizing today’s opportunities | en | OECD
7. Global Hydrogen Review 2021, IEA, November 2021/ Global Hydrogen Review 2021 – Analysis – IEA
8. Hydrogen Production Technologies: Current State and Future Developments, Conference Papers in Energy Volume 2013, by Christos M. Kalamaras and Angelos M. Efstathiou
9. IEAGHG, “Reference data and supporting literature reviews for SMR based Hydrogen Production with CCS,”2017-TR3,March 2017.
10. IEAGHG, “Techno-Economic Evaluation of SMR Based Standalone (Merchant) Plant with CCS,”, 2017/02,February,2017.
11. Green Hydrogen Cost Reduction: Scaling up Electrolysers to Meet the 1.5⁰C Climate Goal, International Renewable Energy Agency, Abu Dhabi (2020)
12. Global average levelized cost of hydrogen production by energy source and technology, 2019 and 2050-Charts-Data &Statistics-IEA