Hydrogen Demand Is Going To Fall Even Quicker In Up to date 2100 Projection

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

Hydrogen demand by 2100, chart by Michael Barnard, Chief Strategist, TFIE Technique Inc

The set off for this was Michael Liebreich publishing his first replace to his helpful hydrogen ladder in two years, model 5.0. I like to recommend readers dig by that as nicely, as Liebreich’s place on hydrogen has hardened fairly considerably, though I stay extra bearish on the molecule. There at the moment are 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 essential 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 in all places on this planet, round 1.5 billion tons of greenhouse gases or equivalents. Decarbonizing hydrogen manufacturing is a requirement.

With decarbonizing hydrogen manufacturing comes vital added prices — realistically 3-5 occasions the fee per ton of hydrogen. Blue hydrogen, manufactured from pure fuel with carbon seize and sequestration bolted onto the method, has vital capital and operational price adders, in addition to extra power necessities that sometimes double the fee 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 change into a major issue, and there’s a kicker in any use of hydrogen for power which I’ll focus on beneath.

Metal: A Uncommon Development Space

Going by every demand class, let’s begin with metal. My authentic projection had roughly 40 million tons of recent demand from metal manufacturing. Iron ore has an excessive amount of oxygen within the combine and have to be diminished ultimately. That’s accomplished 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 progress flattens significantly within the coming a long time as China is coming to the top of its large infrastructure and concrete build-out, and different creating areas will probably be slower. Demand nonetheless rises from present ranges, however much more of metal demand will probably 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. Many of the fossil gasoline infrastructure goes to be scrapped within the coming a long time, so there will probably be a variety of scrap metal to play with.

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

Transportation: Biofuels Require A Little Hydrogen For Processing

Hydrogen for transportation, both straight 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 bottom, 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 service 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 rather more costly per unit of power because of this. 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 awesome tradeoff.

Within the coming a long time, all inland transport and most quick sea transport will probably be battery-electric. Bulk transport will decline radically as bulk fossil fuels symbolize 40% of quantity, and we received’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 transport will diminish as extra processing is finished 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 change into battery-electric too, in my projection. At the least trans-Atlantic aviation and sure trans-Pacific aviation will change into viable as nicely. My aviation projection has liquid fuels required to a minimum of 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 can electrify, so we’ll have capability.

Waste biomass has all of the power required to fabricate diesel and jet fuels, that are simply totally 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 a variety 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 wise 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, which means about one million tons of hydrogen for hydrotreating at 5 kilograms per ton, turns into about one million tons a yr of largely new demand. There are some biofuels processes that add some hydrogen, however with the elevated price of hydrogen, I think 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 Section

Oil refineries stay the one largest demand section for hydrogen. About 40 million tons, a few third of whole world hydrogen demand, is used to course of and refine oil. The most important 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 most important 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 price of processing and refining a barrel of heavy, bitter oil.

We’re within the decade of peak fossil gasoline demand. The Worldwide Vitality Company, based nearly solely 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 yr, 2023, two years forward of expectations. Asia’s Lantau Group tasks that China’s coal demand will peak in 2024, a yr 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 because of this would be the ones which might be getting dearer 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 authentic projection of declining hydrogen demand in refineries wasn’t aggressive sufficient. Consequently, 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 essential one for hydrogen is ammonia. That substance is one nitrogen atom and three hydrogen atoms. Vegetation are made up of as much as 5% nitrogen by mass. It’s the one largest factor by mass of their constructions.

Getting nitrogen to crops is a large a part of agriculture. We used to go away 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 in a position to hold producing sufficient energy to match inhabitants progress, multiplying crop yield per hectare.

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

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

Fertilizer is agriculture’s massive local weather change downside, and that downside goes to be priced. Canada’s carbon value already contains 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 value 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 dearer coming and going. The roughly six tons of carbon debt per ton of ammonia for manufacturing will probably be priced, or the expense of blue or inexperienced hydrogen will probably be added. The nitrous oxide emissions of use will probably be priced.

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

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

Heating: Zero Hydrogen Demand

There at the moment are 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 purpose we don’t electrify larger 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 value, one which the EU is making use of to all items 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 will probably be multiplied by an element of 4 in 2030, and an element of six in 2040. Canada’s carbon value, California’s cap and commerce value, and China’s cap and commerce value are going to pattern 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 loads 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 fee 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 will probably be uncompetitive with simply utilizing electrical energy straight. 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 snug ignoring it.

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

One in every of my projections is the requirement and applied sciences which will probably 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 website went dwell. After that, redox circulate batteries and cell-based batteries battle for second place, with redox circulate 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 combat over scraps.

That takes care of every little thing 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 reveals for the UK. On continents with extra room and extra related grids, it’s longer than that. In a variety 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 suppose 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 selection for very lengthy period storage. Its power density by quantity remains to be the poorest among the many alternate options. The price of manufacturing it from power or fossil fuels remains to be larger than the alternate options. It’s nonetheless the leakiest molecule of the alternate options, and one of many ones that’s hardest on metals and electronics.

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

I’m additionally not significantly involved about this section and suppose arguing about it loads is a distraction. We now have 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 folks occupied with it, however 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 will probably be utilized in grid storage, however solely about one million tons a yr 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 a variety of hydrogen to make unhealthy meals merchandise proper now. Partial hydrogenation makes trans fat, just about the least wholesome factor we are able to eat that isn’t actively a poison. With vital 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 yr now to five million tons in 2100.

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

My preliminary projection left demand unchanged at about 9 million tons of hydrogen a yr for the roughly 170 million tons of methanol within the world market. I didn’t see a purpose for that to go up or down, however I’ve spent a variety 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 yr. That’s a really massive quantity, about 1.5% of world greenhouse fuel emissions.

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

It’s used for a wide range 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 value to finish customers goes means up, doubling, tripling, or extra, substitutes will probably be discovered in lots of instances. There are different solvents. There are different chemical compounds 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 reveals, with a decline from 9 to seven million tons by 2100. Not loads, however definitely not a serious improve.

I’ve been being attentive to methanol as a result of the business is making an attempt actually exhausting to persuade the maritime transport 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 swap operation, promoting black methanol at present at doubtless discounted costs and promising inexperienced methanol sooner or later at excessive costs. Maersk has purchased into the story and is spending tens of hundreds of thousands on dual-fuel ships and low-carbon methanol contracts that received’t decarbonize present methanol and sure received’t be used a lot in any respect.

Methanol is already 1.6 occasions the price of diesel per unit of power on common all over the world. When that price multiplies as methanol decarbonizes, biofuels and batteries will probably 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 transport. The economics don’t pencil out. However as I’ve stated, it’s one of the best of the also-rans, so if the business and governments and the IMAO for some head-scratching purpose pressure the sq. peg of inexperienced methanol into the spherical gap of marine energy, I’ll shrug and transfer on. At the least maritime transport will probably be decarbonized, if unnecessarily costly.

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

Blended Different: Hydrogen Is Used For A Lot Of Stuff

Some of the widespread metaphors for hydrogen is that it’s a Swiss Military knife. It could possibly do a variety of issues, however it may possibly’t do most of them significantly nicely. When it’s low cost and the ambiance can be utilized as an open sewer with out price, it’s often the ‘greatest’ financial selection for a bunch of issues. It’s cheaper than alternate options.

One of many attention-grabbing use instances I discovered up to now couple of years is in massive electrical energy producing generators in dams, coal crops, and nuclear crops, the place it’s used as a result of its properties make it an excellent 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 massive generators aren’t growing in quantity, however reducing in quantity and utilization as coal goes away, after all. And the world isn’t going to be constructing 1000’s 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 customers goes up considerably for all of those myriad incidental use instances, they’ll largely go searching and see if there are cheaper alternate options. They usually’ll discover them in lots of instances. Hydrogen isn’t magic or irreplaceable in a variety of processes, it was simply the economically appropriate selection at its black hydrogen value level.

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

Hydrogen Demand: Off A Third By 2100

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

Am I proper? After all not. It is a logical situation based mostly on empirical knowledge and main world traits. It’s defensible, however it’s going to be unsuitable in a number of methods. The error bars are massive, 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 unsuitable than most projections? I feel so, however I’d, wouldn’t I. Time will inform.

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

It’s not like lots of people haven’t been saying that for years, together with me. Hydrogen may be inexperienced, however it received’t be low cost. My projection is that hydrogen will are available 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 sorts and boosters of hydrogen for power who in lots of instances knew higher and had been mendacity deliberately.

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

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