Several industry figures have raised doubts over the potential for hydrogen to be used as a form of large-scale seasonal energy storage to help balance the power grid.
Speaking at the Future of Energy Summit held by Bloomberg New Energy Finance (BNEF) in London yesterday (2 October), they said high costs would likely limit its usage to instances where cheap surplus renewable electricity is readily available.
Adeline Duterque, head of the strategy department at Engie, said its modelling suggested that hydrogen would not be an “economic fuel” for energy storage in the power sector: “I do not believe in hydrogen as a means of balancing the system as storage”.
“Obviously, it depends on the local generation mix,” she added. “If you have lots of almost free green electricity you might see some hydrogen… There’s no average answer on this.”
She said gaps in renewable output could be filled more cheaply by burning biogas in combined-cycle gas turbines and then capturing and storing the emissions. This would create negative emissions that could be used to offset those from more difficult to decarbonise sectors.
BNEF head of energy storage analysis Logan Goldie-Scot said, although costs are expected to fall significantly over time, the use of hydrogen for storage in the power sector is likely to remain “a relatively expensive proposition” for the foreseeable future.
“That’s probably okay if you have extreme enough prices in the market, he added. “It is a local story and there will be opportunities. But it’s tricky to see much beyond that”.
He also raised concerns over how cost reductions could be achieved if they relied on economies of scale: “If you believe that a fairly significant chunk does come from scale, then it begs the question where does that scale come from, and I think that’s something which the industry is not yet ready to answer”.
Mallika Ishwaran, senior economist for group strategy at Shell, was slightly more positive about the prospects for hydrogen as energy storage, particularly during the second half of the current century: “It is doable… The cost of this low-carbon hydrogen will depend on the cost of low-carbon electricity…
“You are seeing quite sharp declines in the cost of low-carbon electricity, but that needs to continue. You also need to have improvements in hydrogen production technologies – electrolysis et cetera – for it to pan out… You can see it coming into play down the line.”
There was agreement that hydrogen would find more immediate and widespread usage elsewhere in the energy system, for example, for heating, industrial processes and transport.