Hydrogen Economy

What Do We Do with Intermittent Hydrogen? The Rush for Transport Is One Answer
February 13, 2024
This Week:
Transport – Perhaps an Easier First Use of Green Hydrogen – Perhaps!
Next Week:
German hedging of future power generation.

The Hydrogen Economy # 33

What Do We Do with Intermittent Hydrogen? The Rush for Transport Is One Answer

Key Points

  • As some of the hype comes out of the large-scale “panacea” hydrogen market, we see a rise in the number of transport-related initiatives – maybe because it is used for distributed limited volumes.
  • Pockets of curtailed power lead to pockets of low cash-cost but very intermittent hydrogen. Assuming you cannot build significant storage, options for use are to blend into a natural gas stream or liquefy for transport.
  • Hydrogen engines and storage tanks are heavy, but where weight is not as much of an issue – buses and short-haul delivery may make sense – especially in the hub and spoke operations. Otherwise, transport is a challenge.
  • We updated our cost models again this week and note that blue and grey costs have decreased in Europe and the US because of the global fall in natural gas prices. This is partly offset in Europe by weaker carbon credits.
  • Otherwise, we look at the dilemma for ammonia – long-term demand but weak current investment incentives. We also study why Chinese power is cheapening, carbon intensity, and why Linde likely has the right strategy.

Exhibit 1: The grey and blue costs have dropped meaningfully in the last month with global natural gas prices.

Source: Bloomberg, Capital IQ, and multiple other sources – C-MACC Analysis

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