The recent Place North West Connected Future Cities event at the Science and Industry Museum in Manchester featured a fascinating panel on the future of energy. This is a subject on which I have some history, having worked with CMS, sponsors of this event, on a report on the future of energy back in 2017. In it, we predicted the ultimate demise of gas – a probability reinforced by this report from the Committee on Climate Change in February 2019, and further by a subsequent commitment by the Chancellor in March. But we said little about hydrogen, one of the main topics for Peel Environmental’s Dr Tony Smith.
I’ve since been picked up on this by fans of hydrogen as a fuel and a means of storing energy, but if anything, my opinion on hydrogen has hardened.
First things first: hydrogen and fuel cells absolutely have a place in the future energy mix. There is investment happening and technology developing. In large-scale transport particularly – trains, boats, trucks – hydrogen offers relatively high energy density and rapid refuelling in a form that is reasonably intuitive for those that understand fuel oils. The infrastructure it requires is not dissimilar to existing systems, meaning current fuel oil users and suppliers can move in a relative straightforward fashion. Many will.
But the scale of deployment of hydrogen fuel cells will be exponentially outpaced by the deployment of battery and derivative forms of power. Why? Two reasons.
The first is ubiquity. Batteries are being included in everything. The more we make, the cheaper each unit gets. Yes, there are huge issues with the environmental cost of manufacture and the sourcing of the materials involved. But the scale of the market means that there is well-funded research to overcome these issues, as well as improving performance. The bulk of energy storage, whether for home, business, grid, or transport, will most likely leverage these economies of scale when looking for solutions.
The second is about market shape, rather than market size. There is an overwhelming trend towards decentralisation, across many sectors, not just energy. Hydrogen goes against this trend because of the nature of the production technology. It’s a large scale, specialised investment to produce hydrogen from either natural gas or from water. People won’t be doing this at home any time soon, or even in small businesses. Meanwhile the price of solar cells that can charge batteries directly has collapsed in recent years. They can be installed almost anywhere, residential, or commercial. Batteries and solar continue the current disruptive trend of decentralisation, while hydrogen has to fight against it.
Hydrogen has a role in the future energy mix. But that role will be massively smaller than battery-based energy storage.