Elon Musk regularly makes headlines, most recently with his attempted $44 billion takeover of Twitter and being the subject of a sexual harassment claim. Whatever your views on the eccentric billionaire, the Time Person of the Year 2021 has tremendous influence over the technology sector. For example, in June 2021 his ‘break-up tweet’ with Bitcoin caused the virtual currency to drop over 7% in value, wiping approximately $365 billion from the crypto markets. Therefore, we were very interested (and apprehensive, in equal measure) when Elon Musk shared his most recent views on hydrogen as a potential fuel source.
In a recent interview at the Financial Times Future of the Car Summit, Elon Musk described hydrogen as “the most dumb thing [he] could possibly imagine for energy storage”. He continued his criticism with a series of statements about why he believed hydrogen was not the answer to the world’s energy crisis. We delve deeper into each of these statements and consider whether there is any truth to them.
"When you're cracking hydrocarbons [into carbon dioxide and hydrogen] you haven't solved the fossil fuel problem"
Hydrogen can be created in various ways, each with their distinct impact on the environment. What Elon Musk is referring to here is ‘Grey Hydrogen’, which involves converting fossil fuels into hydrogen, with the resulting CO2 being emitted into the atmosphere. It is estimated that this resulting CO2 accounts for around 3% of global industrial sector CO2 emissions. Approximately 95% of hydrogen is created in this way worldwide.
Elon is correct in saying that Grey Hydrogen will not solve the global emission problem. However, his stance ignores the alternative methods of creating hydrogen:
- Blue Hydrogen – This still uses fossil fuels to produce hydrogen, however, carbon capture and storage (CCS) traps and stores some of the remaining carbon emissions underground instead of releasing it into the atmosphere. The CCS process is not usually 100% efficient, meaning carbon dioxide is still emitted into the atmosphere.
- Green Hydrogen – This is the isolation of hydrogen using purely renewable energy. As only renewable methods are used, no CO2 is generated in the course of production. This method accounts for less than 2% of the total supply of hydrogen according to a recent report by KPMG.
With this in mind, Blue Hydrogen has the potential to limit the global emissions created, whilst Green Hydrogen would solve the “fossil fuel problem” entirely. Of course, producing Green Hydrogen on a commercial scale is a challenge in itself, but the point stands that there are methods available that allow us to produce hydrogen in a way that can solve the climate crisis.
"The efficiency of electrolysis is...poor"
Elon expanded: “So you really are spending a lot of energy to … split hydrogen and oxygen. Then you have to separate the hydrogen and oxygen and pressurize it — this also takes a lot of energy.”
It is estimated that a new electrolysis plant (to create Green Hydrogen) delivers around 80% efficiency. That is, the energy value of the hydrogen produced is about 80% of the energy it took to create it in the first place. Moreover the “round-trip efficiency” (how much energy is provided when power is used to create hydrogen and then transform the hydrogen back to power) is around 18%-46%. This is relatively low compared to pumped-storage hydropower (70%-85%) and compressed air energy storage (42%-67%).
In this way Elon is right; Green Hydrogen is not as energy efficient as other methods of energy generation. However, innovations are being made at an astonishing pace in the hydrogen sector. In March of this year, Australian company Hysata demonstrated power efficiency rates of 98%. If such technology can be rolled out at a commercial scale, it would make hydrogen one of the most efficient sources of fuel.
Importantly, as Green Hydrogen technology improves, the cost per MWh will decrease, making it much more economically viable. In a report by the European Commission in 2020, the reduction to the unit cost of Green Hydrogen was identified as pivotal for large-scale European adoption of hydrogen. Graham Cooley, CEO of Sheffield-based ITM, a leader in electrolysis manufacturing, estimated in 2021 that the cost of Green Hydrogen was reaching parity with Blue Hydrogen (approximately £40/KWh). Interestingly, with significant volatility in the fossil-fuel market today, there are times this year when Green & Blue hydrogen was cheaper than their Grey Hydrogen alternative.
Whilst Elon has a point here, we doubt his statement will remain correct for long. The rate of technological innovation and cost savings will likely soon reach (if not exceed) the levels seen in alternative technologies. If this proves to be the case, it will become more feasible to turn to hydrogen as a main energy source. This will require, primarily, the cost of hydrogen production to fall. The European Commission in 2020 reported that the cost of Grey Hydrogen per kg was €1.5, whereas Blue Hydrogen was €2 and Green Hydrogen was €2.5 - €5.5.
"Gigantic tanks" would be required to hold hydrogen in liquid form. If it were to be stored in gaseous form "even bigger" tanks would be needed.
On a volume basis, liquid hydrogen has a lower energy density when compared to gasoline (8 MJ/L as compared to 32MJ/L). As a result, large containers are currently required to store useful quantities of hydrogen. This is one of the reasons why, when asked whether he thought hydrogen had a role to play in the transition away from fossil fuels, Elon said “no”.
On a mass (as opposed to volume) basis, however, the energy density situation is reversed. Hydrogen has nearly three times the energy content of gasoline—120 MJ/kg for hydrogen versus 44 MJ/kg for gasoline. In layman’s terms, 1kg of hydrogen contains approximately the same energy as 3.2kg of gasoline.
In practice, what this means is that it is much easier to utilise hydrogen energy at large stationary sites where there is no need for portable applications. This is why we foresee hydrogen being much more readily utilised (at least in the medium-term) in industrial clusters and the national grid, rather than as a fuel for cars, for example.
A number of different institutions and companies are looking at how to make hydrogen storage more compact. Aguey-Zinsou, professor of Chemistry at the University of Sydney, recently launched a company to use solid state materials that hold hydrogen at the heart of a system for storing energy from household or commercial rooftop solar panels that could rival battery storage such as Elon’s Tesla Powerwall. The system would incorporate a small water-splitting electrolyser to generate hydrogen, and a fuel cell to release the energy. Compared to a lithium-ion battery, the system could potentially store a lot more energy for a similar footprint, and should have a working lifespan of about 30 years, which no existing battery can match.
We think it is unlikely that Elon’s protestation about “gigantic tanks” will be relevant for long. The rate at which new technologies are being developed to tackle this issue means hydrogen could well go the same way as liquefied natural gas, which already transports a denser form of the energy source at a huge commercial scale.
Whilst storage and efficient production are challenges for hydrogen, Elon Musk is wrong to say that it is “dumb”. The potential of the technology means it deserves the increasing amount of attention it is receiving in energy circles. The truth is, as pointed out by Roy McCarthy, an analyst at energy consultancy Wood Mackenzie, “if we want full decarbonisation, then a range of technologies will be required”. For things like electric cars, lithium-ion batteries will continue to dominate, at least in the short-medium term. In those areas, innovation in battery production and recycling will be vital. However, there are still significant roles for hydrogen to play in the energy landscape of the future. Its ability to store energy for long periods of time cannot be matched by batteries. In addition, the fact that it can be integrated into existing networks means it could be deployed relatively cheaply to help decarbonise various industries in a way that batteries could not. By diversifying energy storage and applying different technologies to the contexts they’re most suited to, we may yet avert a climate catastrophe.
Written by Lloyd James, Ross Howells and George Bridge
"Hydrogen: The most dumb thing I could possibly imagine for energy storage." - Elon Musk