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Why Hydrogen and Why Now?

Tim Grejtak, Analyst
May 12, 2020

A decade ago, long before I joined Lux Research, I worked in the then-burgeoning field of hydrogen and fuel cells, first at BMW developing a fuel cell vehicle range extender, then at a solar hydrogen startup called Sun Catalytix. Back then, hydrogen seemed to be the answer: it could store energy cheaper than the $1,000/kWh batteries of the time, it could balance the pricy and precious little solar and wind energy produced then, and it could be synthesized from natural gas made newly abundant thanks to the shale revolution.

Then the world changed.

Silicon prices plummeted, solar became the cheapest new energy supply, and Li-ion battery production grew to GWh-scale, thanks to smartphones. With electricity and batteries so cheap, the world quickly stopped caring about hydrogen, and so did I. I moved into grid-scale battery research and didn't look back.

Which is why it’s most surprising to me that I’m now helping lead Lux’s coverage of the new global hydrogen economy. What could have happened that could change my mind, and seemingly everyone else’s mind, about hydrogen? In short, as the world adopted low-cost solar and low-cost batteries, we learned more about their limitations. Electricity is many things, but it’s not a panacea.

Lux Research - The Next Energy Transition eBook

One of the biggest challenges facing an all-electric economy is its regionality. Power plants are rarely more than a few hundred miles from the homes and businesses they power. As a result, the world is divided into hundreds of regional electricity markets – individual electric fiefdoms with their own rules, regulations, and resources. That regionality and those resources become the challenge as the world moves to wind and solar electricity; not every electricity market has access to the same quality of wind and solar. Some places like Australia and the U.S. are so flooded with cheap renewable energy that it’s wreaking havoc in their electricity markets, while others like Northern Europe, Japan, and Korea have such poor wind and solar resources they have no hope of ever powering their economies completely by renewable energy alone.

The reality is our global economy is fueled by a global energy trade, one that is entirely comprised of coal, gas, and oil today. For wind and solar to play a more complete role in decarbonizing industryheat, and transportation, we must find a way to make regional solar and wind resources available around the world. We must find a renewable energy carrier.

In many ways hydrogen is an ideal energy carrier – it’s energy dense, it can be generated relatively inexpensively from electrolysis and cheap renewable electricity, and it can be shipped around the world with few losses. For renewable resource-poor countries like Korea or the Netherlands that represent 10% of the global economy, hydrogen can be imported less expensively than electricity from domestic solar or wind. While it’s by no means the only energy carrier – ammonia, synthetic methane, methanol, and even aluminum are all being trialed as low carbon energy carriers – it’s the only one that scales to global proportions.

Why Hydrogen and Why Now
Moving toward a decarbonized energy trade will be transformative; regional electricity markets will finally be open to global economic forces, renewable resource-poor regions will be able to fully decarbonize, and a brand-new global energy market will be created. It’s astonishing to me how much the world has already changed in ten years, but I know it will pale in comparison to what the energy transition has in store the next ten years. Follow Lux and learn how you can own the energy transition.




- Blog: The Next Chapter: Four Storylines Driving the Energy Transition

- Blog: Breaking the Barrier: 2035 Global Renewables Penetration

- Blog: Easing the Pressure on Hydrogen Storage

- Report: Decarbonization of Industry: The Cost of Electrifying Chemical Production (Members Only)

- Report: On the Road Again: Evaluating Hydrogen’s Role in Industrial Transportation (Members Only)

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