News & Views

Is Hydrogen the next Big Thing?

17th September 2021

Following from our last post about ESG and sustainability we were intrigued by an article all about Hydrogen by one of investment partners, Waverton.

In the article, the author argues that while Hydrogen has been heralded as a climate change saviour for a number of years, there is increasing evidence suggesting that this now becoming a reality. There are more and more projects that are delivering results that overcome some of the many challenges that using Hydrogen as a source of energy brings.

Let’s look at both the physical and economic challenges of using Hydrogen.

Firstly, Hydrogen is one of the lowest density gases – 1kg of Hydrogen takes  up 15 times more space than air – which means it has to be compressed in order to make transport viable.

Secondly, Hydrogen gas is the smallest natural molecule which means it can easily leak through the smallest of fissures in tanks or pipelines.

These two alone have economic implications. The tanks and cylinders used to transport Hydrogen have to be extra strong and therefore heavy which means the cost of transport is significant.

Leaking Hydrogen gas has obvious health and safety implications and it requires specialist skills, expertise and equipment to handle safely which are again more costly.

In addition, Hydrogen is classified into different colours according to its environmental footprint:

  • grey (the most common form today, created from natural gas or methane in a process that generates CO2);
  • black or brown (created from coal or lignite and generating more CO2 than grey);
  • blue (grey, black or brown hydrogen but with most of the resultant CO2 captured and sequestered)
  • green (generated by electrolysis using electricity from renewable sources, and carbon free).

Blue and, particularly, green hydrogen are the promising environmental fuels of the future, but they are more costly to produce than the polluting brown or grey. Until the cost can be brought down to comparable levels (or the costs of more polluting varieties raised through carbon pricing) industry is reluctant to embrace them, although there is increasing pressure to do so to meet CO2 targets.

The Hydrogen Council, an industry group, forecasts that this will happen within the next decade, while some participants suggest blue hydrogen can be produced competitively now.

Hydrogen also faces a social challenge, where the public are sceptical as to its safety in the same way it views the nuclear industry. Yet there are a number of projects running in the UK at present looking at the use of Hydrogen as a domestic fuel supply.

Here in Scotland, the H100 project is being built in Levenmouth, Fife which will use offshore wind power to generate hydrogen from electrolysers. Once ready in 2022, local residents will be invited to connect to the hydrogen network rather than their current natural gas network. The first 300 residents will not be charged for the changeover, nor for the new hydrogen appliances, nor for maintenance during the life of the project (expected to be until March 2027). They will pay the same for the hydrogen as they would have paid for natural gas.

H100 Project at Levenmouth


If these challenges can be overcome however, then there are grounds for optimism that green Hydrogen in particular can be used as renewable and green form of energy.

To read the full article click here>>

To read our article about ESG and Sustainability click here>>

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