Hydrogen Could Be The Key To Unlocking The Full Potential Of Wind And Solar
Hydrogen produced with renewable energy could largely replace oil if costs continue to fall
The massive decline in renewable energy costs has disrupted the global energy system. Across the world, wind and solar farms are going up at a rapid pace. In many places, renewable energy is displacing coal and even natural gas.
However, even if clean electricity is able to fully displace fossil fuel electricity, major challenges remain. Electricity represents less than one-fifth of total energy consumption, meaning the world will need to find a way to replace other forms of dirty energy as well. Part of this is already underway — the rise of electric vehicles will soon allow personal cars to be powered by clean energy. However, other sectors could be much more difficult to power by electricity.
Here, hydrogen can play a valuable role. Hydrogen is already used as an input for a variety of industrial processes, including refining and in ammonia production for fertilizer. There are also numerous other high-potential use cases that have yet to be exploited, including transportation (such as powering aircraft, ships, or long-haul trucking), energy storage, heating, and industrial production. Many of these applications have challenges that renewable electricity cannot easily address directly.
However, hydrogen is currently produced almost entirely with fossil fuels. Green hydrogen, which is produced using a process called electrolysis that requires only electricity and water, produces less than 0.1% of hydrogen today. The slow uptake of green hydrogen is mainly due to the high cost — the International Energy Agency estimates that green hydrogen produced with renewable energy costs roughly three times as much as traditional hydrogen produced with natural gas.
Luckily, the rise of wind and solar energy has unlocked abundant clean electricity at a low cost, which creates the possibility of cheap hydrogen without emissions. According to the most recent analysis from the International Energy Agency, onshore wind energy can be produced at a median cost of $50 per MWh while utility-scale solar can be produced at a median cost of $56 per MWh. This compares to…