Energy Transition Handbook - Flipbook - Page 34
Hogan Lovells
34
Hydrogen
Hydrogen-based energy supply has significant potential to enable the transition to a
low-carbon energy system. This is increasingly evidenced by governmental support for
the creation of a hydrogen supply chain, including government-funded incentives to
promote hydrogen energy studies and projects as well as the initiation of legislative
processes to implement a regulatory regime for hydrogen network infrastructure which
guarantees a reasonable return on investment.
Hydrogen is often called the “Swiss-army knife” of energy, providing a clean and
transportable fuel to underwrite the electrification of the global energy system. This is due
to hydrogen’s extreme versatility as an energy carrier (it can be used directly as a zerocarbon-emission combustion fuel, or indirectly via fuel-cells or with methane blending),
its diverse and scalable methods of production (using both non-renewable and renewable
sources), and its ability to be transported over long-distances with minimal losses.
The properties of hydrogen enable it to generate
power and/or heat through fuel cells, combined
heat/power units (CHPs), burners, or modified
gas turbines. Its chemical properties allow for its
use as feedstock in chemical processes (including
production of ammonia and methanol), and for
its storage and transportation as both a liquid
(e.g. ammonia or refrigerated hydrogen) and a gas.
It can be produced in a variety of ways with
different cost and carbon impacts, including by
electrolysis powered by intermittent renewable
sources or by existing excess electricity supplies
(e.g. at times of low demand), or by steam
methane reforming of fossil fuels to avoid
the stranding of existing assets (preferably
with carbon capture to further reduce carbon
emissions), or by emerging new technologies such
as methane pyrolysis (which produces pure carbon
as a commercial by-product). The produced
hydrogen can then be used locally or transported
(by pipeline, truck or ship) for use in both
industrial and consumer sectors.
In addition, hydrogen production and
transportation facilities can be piggy-backed on
existing fossil fuel and renewables infrastructure
projects (e.g. pipelines, gas plants, solar arrays,
wind farms), and the produced hydrogen can
power the very vehicles that transport it over large
distances (for example, from areas with a high
potential for clean hydrogen generation to areas
with high energy demand but limited clean energy
production abilities). Also, existing infrastructure,
especially natural gas infrastructure, can often
be rededicated for a future use as hydrogen
infrastructure, to avoid stranded investments.
Key issues:
•
besides first steps in the development of a
regulatory regime for hydrogen infrastructure,
there still is a lack of regulatory certainty on the
widespread production, transportation and use
of hydrogen
•
the cost and timeframe for the establishment of
the necessary infrastructure
•
the expense of hydrogen, especially green
hydrogen produced from clean renewable
sources, in comparison to fossil fuels (and even
to blue hydrogen created from fossil fuels)
•
the multitude of technologies for hydrogen
production and storage, many of which are still
not bankable technologies
•
a lack of knowledge and social acceptance
of hydrogen by consumers, including
safety concerns
Case study
Hogan Lovells is advising Riversimple, a UK
car manufacturer of hydrogen-powered fuel cell
vehicles. Riversimple provides a sustainable
business model from the product, the governance
structure and the interaction with the end
consumer. The current model, the Rasa, is to be
sold as a service, Riversimple retains ownership
of the vehicles and the consumer pays a monthly
subscription price which includes use of the
vehicle and all ancillary costs.