Hydrogen Demand Is Going To Fall Even Faster In Updated 2100 Projection

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Virtually two years in the past I revealed my first hydrogen decade-by-decade demand projection by means of 2100. My projection has modified over time, most just lately with my evaluation of iron and steel demand through 2100, however I hadn’t republished it formally for some time. And now it’s time to do this.

The set off for this was Michael Liebreich publishing his first replace to his helpful hydrogen ladder in two years, version 5.0. I like to recommend readers dig by means of that as nicely, as Liebreich’s place on hydrogen has hardened fairly considerably, though I stay extra bearish on the molecule. There are actually eight use instances within the ladder that are within the row of doom the place there isn’t any hope for any hydrogen demand.

As a body for this dialogue, it’s vital to do not forget that hydrogen manufacturing at present is a greenhouse fuel emissions downside, and therefore local weather change downside, in the identical vary as all of aviation all over the place on the earth, round 1.5 billion tons of greenhouse gases or equivalents. Decarbonizing hydrogen manufacturing is a requirement.

With decarbonizing hydrogen manufacturing comes important added prices — realistically 3-5 occasions the price per ton of hydrogen. Blue hydrogen, manufactured from pure fuel with carbon seize and sequestration bolted onto the method, has important capital and operational price adders, in addition to extra power necessities that usually double the price or extra, and nonetheless leaks methane and CO2 alongside the best way, including to carbon pricing. Inexperienced hydrogen has capital and electrical energy price curves that imply it’s unlikely to get beneath US$6 per kilogram on the level of producing. Any distribution of hydrogen as hydrogen could be very costly.

These prices grow to be a big issue, and there’s a kicker in any use of hydrogen for power which I’ll focus on beneath.

Metal: A Uncommon Progress Space

Going by means of every demand class, let’s begin with metal. My unique projection had roughly 40 million tons of recent demand from metal manufacturing. Iron ore has an excessive amount of oxygen within the combine and should be lowered indirectly. That’s finished with blast furnaces, direct discount with artificial gases, and now with inexperienced hydrogen within the HYBRIT course of. That latter course of makes use of about 55 kilograms of hydrogen per ton of recent metal.

My projection for metal demand development flattens significantly within the coming many years as China is coming to the top of its large infrastructure and concrete build-out, and different creating areas might be slower. Demand nonetheless rises from present ranges, however much more of metal demand might be met by scrapping current metal in electrical arc furnaces, one thing the USA has been doing for 70% of demand for 20 years or so. A lot of the fossil fuel infrastructure is going to be scrapped within the coming many years, so there might be lots of scrap metal to play with.

The mixture signifies that it goes from zero tons at present to 30 million tons in 2100. My unique guesstimate was 40 million tons and a slower development, however the metal demand projection each lowered the entire requirement and introduced it ahead.

Transportation: Biofuels Require A Little Hydrogen For Processing

Hydrogen for transportation, both immediately or by way of artificial fuels manufactured from electrolyzed or blue hydrogen mixed with captured CO2, is a non-starter. I spent 9 years transportation repowering and analyzing biofuels, batteries, hydrogen, and artificial fuels, and it’s going to be grid-tied and batteries on the ground, and batteries and biofuels within the air and water.

The kicker for hydrogen for power is said to blue hydrogen. The carbon atom that’s a part of the carbon and hydrogen that make up pure fuel is 45% of the power provider within the combine. Blue hydrogen takes pure fuel, removes 45% of the power with extra capital and working prices for capturing and sequestering the carbon dioxide, and finally ends up being way more costly per unit of power in consequence. Not solely is the per unit price of hydrogen doubling, the power embodied within the ensuing hydrogen is about half of what was within the pure fuel. Probably not an excellent tradeoff.

Within the coming many years, all inland delivery and most quick sea delivery might be battery-electric. Bulk delivery will decline radically as bulk fossil fuels characterize 40% of quantity, and we gained’t be extracting, processing, refining, and distributing the roughly 18 billion tons of them that we do at present. Equally, the uncooked iron ore which represents 15% of bulk delivery will diminish as extra processing is completed close to mines with electrical energy and hydrogen as a substitute of coal. Solely transoceanic and the longer coastal routes would require liquid fuels, and so they’ll be biofuels.

Most aviation inside continents will grow to be battery-electric too, in my projection. No less than trans-Atlantic aviation and sure trans-Pacific aviation will grow to be viable as nicely. My aviation projection has liquid fuels required to not less than the top of the century in diminishing quantities after 2060 or so, and so they’ll be sustainable aviation biofuels.

The overall liquid biofuel requirement is within the vary of 200 million tons yearly, and we already manufacture 100 million tons of the stuff, with about 70 million tons of it being biodiesel. We waste the overwhelming majority of that on floor transportation, and all of that may electrify, so we’ll have capability.

Waste biomass has all of the power required to fabricate diesel and jet fuels, that are simply completely different combos of the hydrogen, oxygen and carbons within the biomass. And there are tens of billions of tons of biomass waste generated yearly by the forestry business, agriculture, livestock, and the meals processing business. Each ton of dried biomass turns into about 0.4 tons of biofuel.

And all of that waste biomass creates lots of methane because it decomposes, so diverting biomass waste to biofuels is a really local weather virtuous circle, and with carbon pricing and carbon border adjustment mechanisms, a really financial smart one.

The dominant use of hydrogen in refineries is hydrocracking to separate lighter distillates from heavy crude. The decrease quantity makes use of are hydrotreating and desulfurization. Hydrotreating is the dominant one required for biofuels. That in all probability means about 5 kg hydrogen per ton of biofuel, very roughly.

With 200 million tons of biofuels, meaning about one million tons of hydrogen for hydrotreating at 5 kilograms per ton, turns into about one million tons a 12 months of largely new demand. There are some biofuels processes that add some hydrogen, however with the elevated price of hydrogen, I believe they’ll show much less aggressive than processes which don’t require. I give one other million tons for that.

I’d put aside 4 million tons for biofuel processing as a guess in my preliminary hydrogen projection, and apparently I used to be beneficiant.

Desulphurization & Hydrotreating: A Plummeting Demand Phase

Oil refineries stay the only greatest demand section for hydrogen. About 40 million tons, a couple of third of whole international hydrogen demand, is used to course of and refine oil. The largest portion of that, about 75%, is for hydrocracking which separates crude into lighter and heavier fractions. Hydrotreating removes extra water. Desulphurization removes extra sulfur, which is a severe pollutant and a giant air air pollution and acid rain concern.

The crude oil that generates the largest demand for hydrogen is heavy, high-sulphur crude. That’s the stuff from Alberta, Venezuela, and Mexico. The requirement for about 7.7 kilograms per barrel of these merchandise signifies that the standard low cost goes to multiply as the value of hydrogen multiplies as it’s required to be decarbonized.

Blue or inexperienced hydrogen would add US$25 to $77 to the cost of processing and refining a barrel of heavy, sour oil.

We’re within the decade of peak fossil gasoline demand. The International Energy Agency, based virtually fully as a fossil gasoline company 50 years in the past, just lately declared that each one fossil gasoline demand, not simply oil and coal, would peak this decade. China’s oil and fuel refining and distribution large, Sinopec, declared that peak gasoline demand as this 12 months, 2023, two years forward of expectations. Asia’s Lantau Group initiatives that China’s coal demand will peak in 2024, a 12 months forward of expectations. And so forth. And so forth. And so forth.

With the height comes the decline. With declining demand comes main shifts in market economics. In a declining market, the most cost effective oil will win clients, and that oil is mild, low sulphur, and near water. The primary crude oils off the market in consequence would be the ones which can be getting costlier to course of and refine, which is to say those that require probably the most hydrogen.

This balancing act of world market economics signifies that my unique projection of declining hydrogen demand in refineries wasn’t aggressive sufficient. In consequence, I’ve steepened the curve of decline for hydrogen for these segments.

Fertilizer: Feeding 8 Billion Individuals Doesn’t Require As A lot Of It

Fertilizer is a number of merchandise, however the vital one for hydrogen is ammonia. That substance is one nitrogen atom and three hydrogen atoms. Crops are made up of as much as 5% nitrogen by mass. It’s the only greatest component by mass of their constructions.

Getting nitrogen to crops is a big a part of agriculture. We used to depart fields fallow and planted with clover one out of 4 years to do this. Now we manufacture hydrogen from pure fuel and coal and bind it with nitrogen from the air in industrial chemical crops to make ammonia, after which additional course of the ammonia in varied methods for functions.

We use about 30 million tons of hydrogen yearly for this course of. It’s been an enormous a part of why we’ve been capable of preserve producing sufficient energy to match inhabitants development, multiplying crop yield per hectare.

We waste lots of the agricultural vitamins we use at present. We over-apply them. We spray them from helicopters and planes over fields, blowing lots of it outdoors of the boundaries of the fields and into waterways the place it causes important downstream issues.

And when ammonia is available in contact with moisture within the soil, a few of it turns into nitrous oxides with international warming potentials about 265 occasions as excessive as carbon dioxide.

Fertilizer is agriculture’s huge local weather change downside, and that downside goes to be priced. Canada’s carbon worth already consists of all greenhouse gases, together with nitrous oxide and methane. The EU’s emissions buying and selling scheme and carbon border adjustment mechanism will embody them beginning in 2026. The projected worth per ton of CO2 or equal is satisfactorily excessive for the severity of the issue, reaching about US$203 in 2030 in 2022 greenback values.

That signifies that ammonia goes to get costlier coming and going. The roughly six tons of carbon debt per ton of ammonia for manufacturing might be priced, or the expense of blue or inexperienced hydrogen might be added. The nitrous oxide emissions of use might be priced.

The mixture will imply important downward strain on ammonia demand and a hunt for options. And we have already got levers that we will pull there. Pivot Bio has genetically engineered normal nitrogen fixing microbes within the soil to take away their off swap in order that they preserve working even within the presence of fertilizer, and brew them in what are principally beer vats. They had been lowering ammonia fertilizer demand on one million acres of US corn by 25% a few years in the past, and have a stretch aim of 100% for corn, wheat and rice by 2030. Many others are engaged on the identical downside, so good outcomes might be achieved. And precision agriculture, together with with heavy spray drones, is slicing product software volumes for a similar crop yields.

Criticism of my first projection from Paul Martin was apt. I had lowered demand in 2030 by a few million tons, and that was too aggressive of a timeframe. Aside from that, the projection stays unchanged with a discount however not elimination of the demand space.

Heating: Zero Hydrogen Demand

There are actually one thing like 45 severe research which all say that hydrogen has no play in business or residential water or air heating and that warmth pumps are the reply. 45% of business warmth is beneath 200° Celsius, and fashionable warmth pumps are delivering that, so it’s not a market both.

That leaves industrial warmth above 200° Celsius. I’ve checked out innumerable makes use of instances and applied sciences for industrial heating and haven’t discovered a single one the place there aren’t electrical options. There isn’t any temperature vary that electrical energy and its warmth applied sciences like resistance heating, induction heating, EMF, microwaves, electrical arcs, and electrical fuel plasmas can’t obtain. Electrical arc furnaces already run as much as 3,000° Celsius.

The one cause we don’t electrify increased temperature heating at present is as a result of fossil fuels are a mud low cost supply of excessive temperatures, particularly pure fuel for the previous 20 or so years. However in 2030, the EU’s ETS and CBAM imply that each gigajoule of pure fuel warmth goes to price about US$14 extra. Pure fuel averaged about US$5 per gigajoule from 2009 to 2021.

A sensible carbon worth, one which the EU is applying to all goods crossing itss border, all items manufactured inside its borders, and one which each US EPA and Canadian social price of carbon is carefully aligned with, signifies that the value of warmth from pure fuel might be multiplied by an element of 4 in 2030, and an element of six in 2040. Canada’s carbon worth, California’s cap and commerce worth, and China’s cap and commerce worth are going to development to the identical factors, partially as a result of that’s the financial actuality, and partially to align buying and selling worth throughout economies to keep away from being uncompetitive.

The carbon pricing alone would imply large shifts to electrical heating options, that are lots cheaper and extra environment friendly in most jurisdictions. However hydrogen power will at all times be much more costly than pure fuel power.

Keep in mind, blue hydrogen makes use of power to throw away 45% of the power within the pure fuel and prices extra. Inexperienced hydrogen goes to be 5 to 10 occasions the price per gigajoule of liquid pure fuel, the costliest type of power most economies use at present.

Economics imply that each try to make use of hydrogen for warmth might be uncompetitive with simply utilizing electrical energy immediately. That is no place the place hydrogen will pencil out in my view, or if there may be it’s such a rounding error that I’m comfy ignoring it.

Lengthy-Time period Storage: Nothing About The Requirement Screams Hydrogen

One in all my projections is the requirement and technologies which will be used for grid storage. My projection has pumped hydro — particularly closed-loop, off-river pumped hydro with excessive head heights and small reservoirs — persevering with to dominate grid storage because it has since 1907 when the primary web site went dwell. After that, redox movement batteries and cell-based batteries battle for second place, with redox movement taking the lead due to the decoupling of energy and power that they supply. Then there’s a 100 GW of also-rans, together with compressed air, liquid air, thermal storage for electrical energy, and hydrogen will battle over scraps.

That takes care of every part besides 10- to 100-year occasions when very massive geographic areas go weeks with out sunshine or wind. Ten years is the island downside, and that’s what Sir Chris Llewellyn-Smith’s modeling exhibits for the UK. On continents with extra room and extra related grids, it’s longer than that. In lots of the tropics, there’s at all times sunshine, so it’s a non-issue.

These uncommon occurrences will want some strategic reserves. Lots of people appear to assume that placing hydrogen in salt caverns sluiced out for the aim is the answer. I feel that’s presupposing that hydrogen is the reply and going searching for use instances.

There’s nothing about hydrogen that makes it the apparent alternative for very lengthy period storage. Its power density by quantity continues to be the poorest among the many options. The price of manufacturing it from power or fossil fuels continues to be increased than the options. It’s nonetheless the leakiest molecule of the options, and one of many ones that’s hardest on metals and electronics.

Personally, my guess is on capturing and diverting anthropogenic biomethane from the waste biomass we don’t remove or in any other case diffuse, and don’t use for different functions, and shoving that it into strategic reserves to burn in lavatory commonplace mixed cycle fuel generators. That turns a present main local weather downside into an answer for a particular transition downside and containing and monitoring methane is comparatively trivial in comparison with hydrogen.

I’m additionally not notably involved about this section and assume arguing about it lots is a distraction. We’ve got an terrible lot of heavy lifting to do earlier than we get to the final couple of % of decarbonization. It’s nice that there are individuals fascinated about it, nevertheless it doesn’t make a lick of distinction to what now we have to do within the subsequent 10 to fifteen years.

The mixture signifies that I feel some hydrogen might be utilized in grid storage, however solely about one million tons a 12 months beginning in 2040. Nothing I’ve seen up to now two years has modified my thoughts on that one.

Hydrogenation: Margarine & Trans-Fat Will Decline A Bit

We use lots of hydrogen to make unhealthy meals merchandise proper now. Partial hydrogenation makes trans fat, just about the least wholesome factor we will eat that isn’t actively a poison. With important will increase in hydrogen prices and rising well being consciousness globally, I see a slight decline by 2100 in hydrogen demand for meals hydrogenation.

Unchanged because the first projection, going from about 8 million tons a 12 months now to five million tons in 2100.

Methanol: Regardless of Business Bait & Swap, A Small Decline

My preliminary projection left demand unchanged at about 9 million tons of hydrogen a 12 months for the roughly 170 million tons of methanol within the international market. I didn’t see a cause for that to go up or down, however I’ve spent lots of time methanol up to now two years.

The methanol business is a serious local weather downside. Methanol manufacturing, with the hydrogen challenges that feed it, provides extra greenhouse fuel emissions and leads to the vary of 500 to 700 million tons of greenhouse gases or equal a 12 months. That’s a really huge quantity, about 1.5% of world greenhouse fuel emissions.

Methanol is a local weather change downside which will depend on hydrogen. Methanol is manufactured from pure fuel, coal, or some waste artificial gases. It will depend on its feedstocks being grime low cost, and with the ability to deal with the ambiance as an open sewer to take care of its commodity costs.

It’s used for quite a lot of industrial functions, together with a bunch of stuff that’s going away, like being a gasoline additive, a diesel additive, and a burnable gasoline name DME. It’s used to make formaldehyde, plastics, and solvents.

Cleansing up methanol is a serious requirement, and carbon pricing alone goes to make its prices shoot up. As its worth to finish shoppers goes means up, doubling, tripling, or extra, substitutes might be discovered in lots of instances. There are different solvents. There are different chemical substances which may do the identical job. Methanol will get used as a result of it’s helpful and low cost. When it stops being low cost, different issues which aren’t as costly will find yourself within the combine.

Which means that the pure pathway for methanol is definitely a decline in demand, one thing I hadn’t projected. That’s what my present mannequin exhibits, with a decline from 9 to seven million tons by 2100. Not lots, however definitely not a serious enhance.

I’ve been taking note of methanol as a result of the business is making an attempt actually arduous to persuade the maritime delivery business that it’s the alternative for the fossil fuels that they at the moment bunker. As I’ve famous, they’re working a bait and switch operation, promoting black methanol at present at seemingly discounted costs and promising inexperienced methanol sooner or later at excessive costs. Maersk has bought into the story and is spending tens of thousands and thousands on dual-fuel ships and low-carbon methanol contracts that gained’t decarbonize present methanol and sure gained’t be used a lot in any respect.

Methanol is already 1.6 occasions the price of diesel per unit of power on common around the globe. When that price multiplies as methanol decarbonizes, biofuels and batteries might be vastly extra aggressive. I feel Maersk’s twin gasoline ships will bunker much more biodiesel than methanol.

I don’t see an upside for methanol in maritime delivery. The economics don’t pencil out. However as I’ve mentioned, it’s the perfect of the also-rans, so if the business and governments and the IMAO for some head-scratching cause pressure the sq. peg of inexperienced methanol into the spherical gap of marine energy, I’ll shrug and transfer on. No less than maritime delivery might be decarbonized, if unnecessarily costly.

However the 1,000 km regular route of the 700-container ship that’s now plying the Yangtze with containerized batteries and its sibling inform me I’m extra seemingly proper.

Combined Different: Hydrogen Is Used For A Lot Of Stuff

One of the widespread metaphors for hydrogen is that it’s a Swiss Military knife. It may do lots of issues, however it may’t do most of them notably nicely. When it’s low cost and the ambiance can be utilized as an open sewer with out price, it’s ceaselessly the ‘greatest’ financial alternative for a bunch of issues. It’s cheaper than options.

One of many fascinating use instances I discovered up to now couple of years is in huge electrical energy producing generators in dams, coal crops, and nuclear crops, the place it’s used as a result of its properties make it a great coolant that doesn’t add friction. Gigawatt-scale nuclear crops just like the 9 Mile Level reactors use a few hundred kilograms of the stuff a day. These huge generators aren’t rising in quantity, however reducing in quantity and utilization as coal goes away, after all. And the world isn’t going to be constructing hundreds of recent nuclear crops when wind and photo voltaic are so low cost, quick, low-risk, and dependable.

When the value of hydrogen to finish shoppers goes up considerably for all of those myriad incidental use instances, they’ll largely go searching and see if there are cheaper options. And so they’ll discover them in lots of instances. Hydrogen isn’t magic or irreplaceable in lots of processes, it was simply the economically right alternative at its black hydrogen worth level.

Initially, I’d left this demand section alone, leaving it flat at 30 million tons a 12 months. However the identical financial strain to search out replacements that influence fertilizer and methanol impacts this section. I now have it slowly declining to 25 million tons a 12 months.

Hydrogen Demand: Off A Third By 2100

The results of all these places and takes is a decrease demand ultimately than I’d initially projected in 2100. My unique projection was round 90 million tons, and now it’s slightly below 80 million tons.

Am I proper? After all not. It is a logical situation primarily based on empirical information and main international tendencies. It’s defensible, nevertheless it’s going to be incorrect in a number of methods. The error bars are huge, and at 77 years, I’m projecting about 76 years previous what we are literally able to doing with any accuracy.

Am I much less incorrect than most projections? I feel so, however I might, wouldn’t I. Time will inform.

However there are some rising information factors that make it clear that the hype cycle for hydrogen for power is disappearing. One in all them is Michael Liebreich’s ladder, the place use instances he had in play have dropped fully out of play, like off-road automobile power demand. One other one is a major BCG report that just lately dropped the place the illusory consensus of US$3.20 per kilogram of inexperienced hydrogen was discovered to be incorrect, and that US$5.30 inexperienced hydrogen was extra seemingly.

It’s not like lots of people haven’t been saying that for years, together with me. Hydrogen can be green, but it won’t be cheap. My projection is that hydrogen will are available in at $6-8 per kilogram to fabricate at level of consumption, and extra when delivered after all. The consensus of $3.20 and even the fatuous $1 per kilogram was amongst STEM-illiterate monetary and coverage varieties and boosters of hydrogen for energy who in many cases knew better and had been mendacity deliberately.

And so, model no matter that is of my hydrogen demand situation by means of 2100 is now revealed. Please tear it aside and problem me. Inform me the place else I’m incorrect, or how these modifications are incorrect. I dwell by post-publication professional overview, with the entire slings and arrows of occasional humiliation that brings.

As has been attributed to Keynes and plenty of others, “When the info change, I alter my thoughts. What do you do, sir?”