What you still need to know about Green Hydrogen

In the previous article, some recurring questions about green hydrogen, the subject of Mitsidi's Expand program, were answered, available at the link YouTube.

Below, we continue, bringing more answers to other questions pertinent to the topic.

What are the financial barriers to Green Hydrogen?

Currently, the largest hydrogen production is gray (from natural gas), used in the petrochemical industries and, for green hydrogen to be competitive, it must reach a value close to gray, that is, in the order of 2 dollars per kg/H2. In this context, today, Brazil can produce green hydrogen for 4 to 3.8 dollars per kg/H2 and future projections are promising, highlighting the country as one of the main exporters of H2 in the coming years, reaching less than 1 dollar per kilo before 2050, according to a report by Bloomberg NEF (Hydrogen Economy Outlook).

What are the main national policies and strategies that address the topic?

Regarding national strategies, there are some references such as the PNE 2050, which mentions hydrogen as a strategic energy vector that needs to be encouraged for decarbonization in the coming years. There is also the EPE publication “Bases for the consolidation of the Brazilian hydrogen strategy”, published in February 2021, which presents the hydrogen panorama, as well as technological possibilities, cost considerations and challenges in the sector. The National Hydrogen Program was also created in July 2021 by the MME, in cooperation with the MCTI and MDR, together with the technical support of EPE, which provides guidelines for the establishment of a first program in Brazil, which establishes 6 thematic axes.

Recently, a Bill also emerged, PL 725/2022, which provides for the insertion of hydrogen as a national energy source and provisions to encourage the use of sustainable hydrogen (produced from solar, wind, biomass, biogas and hydraulic sources). More information can be obtained at the link.

What are the main initiatives in Brazil for the production and use of Green Hydrogen?

Brazil is one of the leaders in R&D&I in H2 in LAC, with several research centers such as the Hydrogen Laboratory (LabH2) of COPPE-UFRJ, the Hydrogen Laboratory (LH2) of UNICAMP, the Hydrogen Research Center (NUPHI) of the Itaipu Technology Park (PTI), created by an agreement signed between Itaipu Binacional and Eletrobras, and finally the Electric Sector Study Group (GESEL) of the UFRJ Institute of Economics.

In this sense, in the public sector, investments in projects predominate (68%), using mainly resources from the ANEEL R&D Program. Below are some examples of these public calls:

• Called “Green Hydrogen Strategic Mission”, the object of the partnership between SENAI and CTG Brasil (one of the leaders in clean energy generation in the country), the largest call in the country to date focusing on Green H2, the action aims at solutions in clean energy solutions with a focus on production, storage, distribution and new sources, but also in other areas that are part of the hydrogen chain, such as mobility, industry and agriculture.

Source: CTGBrasil

• ANEEL Strategic R&D Call “Development of Efficient Electric Mobility Solutions” (2018): included a search for projects that present solutions for electric mobility, such as business models, equipment, technologies, services, systems and infrastructure to support the development and operation of electric or plug-in hybrid vehicles, batteries or complementary cells, including hydrogen (ANEEL, 2019).
• ANEEL Strategic R&D Call “Technical and Commercial Arrangements for the Insertion of Energy Storage Systems in the Brazilian Electric Sector” (2016).

Source: Abragel (Brazilian Association for Clean Energy Generation)

• In this call specifically, some projects stand out:
• Furnas Centrais Elétricas S/A Hydrogen Project: Development of Synergy between Hydroelectric and Solar Sources with Seasonal and Intermittent Energy Storage in Hydrogen and Electrochemical Systems – SHSBH2. Its main concept is the development of a system formed by several energy generation and cogeneration technologies, including photovoltaic solar energy with the installation of panels in the surroundings and in the reservoir, energy storage via hydrogen, and interactions with the area of electric mobility, and may also include non-hydrogen energy applications provided from the electrolysis process. (FURNAS, 2021)

Source: Eletrobras Furnas

• CESP Energy Storage Project: a complex of alternative renewable energies (solar and wind power plants and energy storage systems) is being developed at the Engenheiro Sergio Mota/Porto Primavera hydroelectric plant (UHE), which is part of the company's Research, Development and Innovation (RD&I) projects. The objective is to convert the surplus energy generated by hydroelectric and solar sources into green hydrogen through the electrolysis process. Hydrogen is stored in tanks for later use during dry periods and peak times.
• Hydrogen Pilot Unit Project at Itaipu Binacional HPP: Through a partnership between Itaipu Binacional, Eletrobras and the Itaipu Technological Park Foundation (FPTI) and with support from the National Hydrogen Energy Reference Center (CENEH) at Unicamp, the Itaipu HPP complex began operations at the end of 2014, together with the operations of its experimental hydrogen plant. The main objective of the project is to use energy that is no longer generated by excess water from the reservoir to supply a large hydrogen production plant.
• H2 Project: Development of a technical, economic and environmental analysis platform for observations of the production, storage, transportation and end use of hydrogen, whose main objective is to develop a platform for evaluating technical, environmental and economic forecasts of the production, storage, transportation and end use of blue and green hydrogen. The project proponent was Guascor do Brasil Ltda.48, a company of the Siemens Ltda. group. and those responsible for execution are the Electric Sector Study Group (GESEL) of the Institute of Economics of the Federal University of Rio de Janeiro (IE/UFRJ) and the Energy Institute (IEPUC) of the Pontifical Catholic University of Rio de Janeiro.

In addition to the use of domestic resources, there are several projects being financed by external investments, such as:

• Construction of the Green Hydrogen Production and Research Center (CPPHV) at UNIFEI with resources from GIZ plans to make the university a pioneer in the development of hydrogen production technologies.
• Pilot Plant for the Production of Sustainable Aviation Fuel (SAF): GIZ and the International Renewable Energy Center (CIBiogás) entered into a partnership in April/2022 for the construction of a plant for the production of SAF from Biogas and green H2 in Foz do Iguaçu, PR, coming from biomass from the sector agricultural.

What are the challenges for the use of Green Hydrogen on a large scale?

Although hydrogen has been trained as a possible energy alternative since the 1970s, its use has been concentrated in very specific applications, such as in oil refining or ammonia production. However, this scenario has changed due to the drop in the cost of producing green hydrogen, as energy from renewable sources has become cheaper and the evolution of electrolyzer technology has advanced significantly.

In addition, there is a strong movement by nations to meet the goals set out in the Paris Agreement, and it is anticipated that only green hydrogen will allow the decarbonization of some sectors, known as major polluters, such as the steel industry and fertilizer production.

However, despite the reduction in costs in recent years, the price is still a challenge for this technology, since, currently, Green H2 is 2 to 3 times more expensive than blue H2, which is more expensive than gray H2 due to the additional carbon capture process. However, it is expected that, by 2030, the prices of green H2 will become competitive with other types of H2.

Source (Coppe/UFRJ)

Therefore, as risks associated with the volatility and flammability of hydrogen in the H2 distribution and storage process are important factors, there are ways being developed to make this process safer, such as liquefaction of the gas, dilution in natural gas or aggregation to ammonia, but this implies an increase in the price due to the additional steps that are created. To address this, extensive risk assessment sheets will be taken into account, such as the figure below taken from Mapfre Global Risk.

Source: Inerco

Furthermore, we need to think about issues beyond the technical ones, such as, for example, ensuring that the water used in the production of green hydrogen does not interfere with the supply levels of a population close to the production plant. Or, making the transition to hydrogen technology viable in a fair and balanced way, without generating a cost that prevents a lower-income population from participating in this energy transition.

As an example of this social problem, a leasing model for a hydrogen truck was presented in the United States with a cost between US$5,000 and US$7,000/month (according to information). If we try to extrapolate a similar model for Brazil, making only a currency conversion and without considering the difference in economic indicators between the countries, which would increase costs in Brazil, and considering a freight value between 0.99 to 1.09 R$/axle/km (conforme informação), it is possible to estimate that it takes 7.5 days to 11.5 days considering that the truck driver will work 11.5 hours of work per day and from 10.75 days to 16.5 days with 8 hours of work per day, which means 25% to 73% of the monthly working time (depending on whether 22 or 30 working days per month are considered) to pay for the leasing. This is a high cost for a portion considered to be of high importance in the use of hydrogen.

Therefore, there are several challenges to ensure that the use of hydrogen in the energy transition is successful, from technical challenges to social challenges, and understanding and solving them is essential. It is important to understand the role of hydrogen in the energy transition to a carbon-neutral matrix and thus ensure which challenges should have their solution prioritized and what is the best path for the future of this technology.