This article was originally published in BIV Magazine's Climate Change issue.
Twenty-one years ago, on March 3, 2000, Ballard Power Systems stock hit $172 per share.
The hydrogen fuel cell pioneer’s stock then began a two-decade-long decline, as the high-tech bubble burst and as it became clear the electric car, not hydrogen fuel cell cars, would be the clean energy transportation system of choice for the future. Ballard’s stock fell below $1 per share in 2012.
But in 2020, Ballard’s stock began a rally, along with other fuel cell company stocks, hitting $52.23 per share on February 8.
More recently, on February 25, 2021, Vancouver fuel cell company Loop Energy Inc. debuted on the Toronto Stock Exchange with a $100 million initial public offering.
In January, Vancouver startup Ekona Power Inc. received a $3 million investment from BDC Capital to prove out a new process it developed to produce low-emission hydrogen from natural gas, without needing carbon capture and storage.
Clearly, hydrogen is hot once again. But is it just another bubble?
Shorter term, perhaps. Longer term, no – not according to sustainable energy experts and the International Energy Agency, which forecasts that demand for hydrogen will grow from 32 million tonnes per year in 2019 to 69 million tonnes by 2050.
The hydrogen strategies that a number of countries, including Canada, have been adopting recognize hydrogen as a versatile energy source with multiple applications – applications that will be needed for industrialized economies to get that last mile towards net zero by 2050.
Hydrogen can be used to power fuel cells, but can also be injected into natural gas streams to lower their carbon content. It can be used as a renewable energy storage solution, and it can be burned, without producing carbon dioxide (CO2) emissions.
“People say, ‘Hydrogen’s been hyped before,’” Tyler Bryant, low-carbon strategy and policy manager for FortisBC, said at the BC Natural Resources Forum in January.
“Yep, that’s true. But last time around, big utilities like FortisBC were not coming to the table and were not looking at billions of dollars of regulated capital investment into something like this. This is a much different situation. The climate imperative, frankly, is a much different situation than it was at previous hydrogen hype cycles. This time truly is different.”
Wal van Lierop, executive chairman of Chrysalix Venture Capital, believes there is a bit of Wall Street speculator frenzy going on with fuel cell stocks right now. Longer term, though, he agrees hydrogen will play an important role in decarbonization for hard-to-abate sectors.
George Rubin, the new chief commercial officer for Loop Energy, acknowledges fuel cell companies such as Loop could still be vulnerable to investor impatience.
“The stock market has a tendency of running ahead of itself, then pulling back,” he says. “But the trajectory and the direction is very, very real this time around.”
Renewable energy, electric vehicles and electrification in general can only get industrialized societies so far down the road to zero emissions. These are essentially the low-hanging fruit.
But electricity and heat account for only 25% of global emissions, according to the Intergovernmental Panel on Climate Change. Transportation accounts for 14%.
Even if you electrified all transportation and electricity generation, you still have heavy industry to deal with – things like cement, steel and chemical production. And industry accounts for 21% of global emissions.
“Once you achieve 50% of the energy transition, things are becoming much more difficult,” van Lierop says.
You simply can’t make cement or steel without high temperatures. In most cases, those temperatures are achieved by burning natural gas or coal. And in transportation, long-haul trucks, cargo ships and trains can probably never be electrified because the batteries needed would simply be too heavy.
Sustainable energy planners say this is where hydrogen fits in. Matthew Klippenstein, a clean energy consultant, says electricity (renewables, hydro, nuclear) and batteries can get an economy 80% towards a target of net zero by 2050.
“But there is zero chance on God’s green earth that you can get to net zero without a gobsmacking amount of hydrogen,” he says.
The Canadian Institute for Climate Choices recently produced a roadmap called Canada’s Net Zero Future. It breaks down decarbonization pathways into two broad categories: “safe bets” and “wild cards.”
The safe bets are proven approaches such as renewable energy, nuclear power, electric vehicles, fuel switching (from coal to natural gas) and point-source carbon capture. These technologies can do the heavy lifting until 2030.
Beyond that, wild cards including hydrogen (for fuel cells and heat) and direct-air capture will need to begin playing bigger roles.
Battery power works fine for passenger cars; it doesn’t work so well for long-haul semi trucks, trains or ocean-going vessels. These areas of transportation are already starting to see a switch to hydrogen fuel cells, especially in China and Europe.
But fuel cells aren’t the only use for hydrogen. Hydrogen can be burned without producing CO2 and used as an alternative to natural gas in industrial processes, such as steel making.
Siemens Energy AG recently announced a partnership with a utility in Utah that will result in a power plant switching from coal to natural gas, and then to hydrogen. The plan is to include a 30% mix of hydrogen with natural gas in 2025. By 2045, the plan is to burn pure hydrogen.
Hydrogen can also reduce the carbon content of natural gas streams. FortisBC’s goal is to have 15% renewable natural gas injected into its natural gas system by 2030, with hydrogen being one of those fuels.
“Twenty years ago people were talking about hydrogen as a way to fuel cars,” says Gary Schubak, vice-president of business development for Ekona Power and a former Ballard engineer. “And that’s where the conversation ended.
“The fuel cell technology wasn’t really ready. Today, it’s ready. But more important than that, people are talking about hydrogen as a way to decarbonize our economy – not just our transportation sector, but our natural gas sector, our steel sector, our ammonia industries.
“Hydrogen is a key component to decarbonizing all sorts of segments of our economy that electrification won’t be able to do,” Schubak says.
The hydrogen strategies that countries like Canada have been rolling out are not just focused on hydrogen use, but hydrogen production, as well.
Hydrogen can be made from natural gas, or from water, using electricity. Blue hydrogen is made from natural gas, with CO2 captured and sequestered.
Green hydrogen, made from water and electricity, is the cleanest, since it produces no emissions. But the amount of energy needed for that process makes it three to five times more expensive than making it from natural gas.
Ekona Power has developed a process for making what might be called “turquoise” hydrogen: a methane pyrolysis reactor that can make hydrogen and solid carbon from natural gas, without the carbon capture and storage.
That the process would create pure carbon as a by-product, as opposed to CO2, is an important distinction. CO2 is a greenhouse gas; pure carbon isn’t. Pure, solid carbon can either be used for industrial purposes – added to asphalt, for example, to make roads last longer – or simply landfilled.
Asked if Canada should skip blue hydrogen production altogether and go straight to green hydrogen production, Sabina Russell, principal of Zen Clean Energy Solutions and former Ballard engineer, says she initially thought that was possible, until she ran the numbers.
“I went in not really sure that we needed blue hydrogen,” Russell said at the BC Natural Resources Forum. “It was really when we started modelling the energy system at that macro level, and looking at the number of petajoules of energy that we use, it became really clear to me that we absolutely need every colour of hydrogen.”
According to the federal government’s new hydrogen strategy, hydrogen could account for up to 30% of Canada’s end-use energy by 2050, and could abate greenhouse gas emissions by 190 million tonnes.
Read more: Capturing the carbon capture market
This article was originally published in the April 2021 issue of BIV Magazine under the title 'Hydrogen Hype.' The digital magazine can be read in full here.
Correction: George Rubin's title has been corrected from the original version of this story.