U.S. Keeps Investing in Renewable Hydrogen Economy

The U.S. Department of Energy has just announced a new $31 million round of funding for research projects aimed at accelerating the role of renewable hydrogen fuel across all sectors of the American economy. The new commitment demonstrates that the U.S. government is serious about supporting efforts by the business community to transition into more sustainable forms of energy.

As always, though, there are a couple of important caveats to consider.

Renewable hydrogen (H2): it’s complicated

The first caveat has to do with the connection between renewable hydrogen, energy storage and non-renewable electricity generation.

The problem is that the chief pathway for renewable hydrogen at present is electrolysis. That involves using an electrical current to “split” hydrogen from water.

The electricity could come from anywhere, which leaves the door open for nuclear energy and fossil fuels.

That’s because hydrogen is an energy storage medium. It provides an economical way to soak up large amounts of excess generating capacity during periods of low demand.

Ideally, that excess capacity would come from wind, solar and other renewable sources.

It could also come from nuclear and fossil fuel power plants. In particular, older coal power plants can’t easily throttle up and down to match demand cycles, so producing hydrogen during off-peak hours would help improve their bottom lines.

That’s the theory, anyways.

The energy storage connection

Some energy observers are concerned that hydrogen storage provides a financial incentive for non-renewable power plants to continue operating.

However, the economic deck is stacked against nuclear power and coal as the cost of renewable energy continues to drop.

Natural gas seems to have a secure future in the near term here in the U.S. Nevertheless, local environmental concerns and broader climate change issues are already motivating electricity stakeholders to move into renewables.

Business owners and energy managers can play a role by advocating for more renewable energy in their grid mix. A business that keeps a close eye on its supply chain will not be particularly enthusiastic about claiming a stake in the hydrogen economy, only to find that coal, natural gas or nuclear energy are factoring in.

The natural gas problem

The other caveat is much less complicated, but just as important. Activity in the renewable hydrogen field is very promising, but as of today, the main source of hydrogen is still fossil natural gas.

That’s something to keep in mind when taking a look at federal initiatives that aim to increase the role of hydrogen in the U.S. economy.

Until hydrogen is produced primarily from renewable sources — and with renewable energy — businesses that rely on hydrogen in their supply chain should not go out on a limb to promote hydrogen as a sustainable fuel.

$31 million more for hydrogen R&D

The new $31 million round of funding comes under the agency’s H2@Scale concept for ramping up the U.S. hydrogen infrastructure, including production, transportation and storage.

The main goal is to promote hydrogen as an energy carrier. That translates into greater resiliency for the nation’s power generation and transmission infrastructure.

That aim also overlaps with the use of hydrogen in the transportation and industrial sectors.

H2@Scale gets green bonus points for its focus on electrolysis and extracting hydrogen from water rather than natural gas.

However, it is important to recognize that the initiative is source neutral when it comes to the energy needed for electrolysis:

“By producing hydrogen when power generation exceeds load, electrolyzers can reduce curtailment of renewables and contribute to grid stability. Hydrogen produced from existing baseload (e.g., nuclear power) assets can also be stored, distributed, and used as a fuel for multiple applications.”

The new round of funding addresses three areas of focus.

One is finding large scale, economical means for transporting and storing hydrogen.

Another has to do with cutting the cost of production. That includes new materials that lower the cost of electrolysis, systems that co-produce hydrogen with other processes, and improvements in reversible fuel cell technologies.

The third area promotes a soup-to-nuts approach to fueling systems, that integrate production, storage, distribution and use.

The H2 economy is on its way

The Energy Department already has a head start in all three areas. One especially interesting project is a small scale H2 production and fuel station that can fit alongside standard gas pumps, developed by the company SimpleFuel.

Another sign of the accelerating H2 economy is the startup semi-truck manufacturer Nikola. The company’s plans include pairing a network of integrated H2 production and fueling facilities with renewable energy.

Several U.S. states have also taken steps to support new H2 R&D projects. In California, for example, the nation’s first fuel cell ferry boat is currently under construction. California is also the site of a new facility for Toyota (with its hydrogen-powered Mirai, shown above) that reclaims biomass for renewable H2 production.

Image credit: Toyota USA