Category:

Science and Technology

Domain:

Energy

Keywords:

Energy - hydrogen, fuel cells, oil, pollution

Outlook:

Although the 'hydrogen economy' may be two decades away, hydrogen-based fuel cells may be increasingly applied in niche areas.

Summary Analysis:

Hydrogen has recently received a lot of press as a clean alternative to oil-based automotive fuels. Pundits talk of today’s oil economy transforming into tomorrow’s hydrogen economy. However, the cost of making hydrogen fuel and the pollution that results, as well as the enormous vested economic interests in today’s oil infrastructure, will make the hydrogen economy unlikely to appear on a mass scale soon. What is more likely is that hydrogen will replace oil as the major transportation fuel only in small regions with abundant access to renewable energy (such as Iceland) or with centralized transportation authorities with easy access to natural gas pipelines (like inner city bus lines).

Hydrogen can be created via either of two processes: by stripping hydrogen out of hydrocarbons or by electrolysis (applying electricity to break water down into hydrogen and oxygen). Both processes require additional hydrocarbons (either directly as a source or to generate the electricity needed for electrolysis), resulting in no net savings of hydrocarbons. The only way hydrogen truly replaces oil cleanly is if renewable energy sources are used to generate the electricity needed for electrolysis. Given the amount of extra electricity that would be needed for this process and the uncompetitive costs of renewable electricity to meet this need, the hydrogen economy is unlikely to materialise in large developed nations. In fact, the wide-scale replacement of oil with hydrogen will probably not occur in the industrialised world until solar power becomes cost competitive with conventional sources of electric power; even when this occurs, it will take decades to replace the existing oil infrastructure. However, small countries or regions that have ample access to renewable energy (like Iceland’s ample supply of geothermal power) could create an isolated hydrogen economy.

And although a global hydrogen economy is unlikely soon, hydrogen-powered fuel cells will probably see adoption in other niche areas. The first large market is likely to be for standby power generation for office buildings and hospitals that need back-up energy during blackouts, as well as rural homes that want to live off the grid. Here, the requirement of only small amounts of hydrogen will help to alleviate the high cost of creating it, and fuel cells could be more efficient than existing diesel and other generators run on conventional oil-based fuels.

Hydrogen-based fuel cells also offer potential as a stored power source for small electronic gadgets. The ability to refill a hydrogen battery instead of replace existing batteries has strong appeal. Currently, technological hurdles prevent this from being an attractive option, but future innovation could make this niche application attractive.

Implications:

• Potential for decreasing the waste stream generated by throw-away batteries for electronic gadgets
• Potential for decreased emissions from generators used for back-up power or by those who live off the grid
• Potential for those with access to inexpensive renewable energy to realise air pollution reduction

Early Indicators:

• Development and manufacture of prototype vehicles running on hydrogen fuel cells

What to Watch:

• Hydrogen-based fuel cells begin to be employed in buses.
• Iceland starts to develop a hydrogen economy based on its Hydrogen Economy initiative.
• Sales of fuel cell generators start trending upward.

Parallels/Precedents:

• Use by urban bus lines of cleaner forms of energy (such as LNG and electricity)

Enablers/drivers:

• Concern over increased demand and supply constraints of oil
• Concern over the polluting consequences of energy consumption
• Continued technological innovation in the realm of power storage for electronic devices
• Continued development of solar power to a point where it becomes cost competitive with other electrical production methods

Leaders:

Regions:

• Iceland
• Europe

Institutions:

• World's automakers (for example, Rolls-Royce, GM)
• Los Alamos National Laboratories
• Johnson Matthey
• Forschungzentrum Julich, Fuel Cell Project
• Fuel Cell Project, University of Newcastle upon Tyne, UK [link]
• Hydrogen and Fuel Cell Research Group, Imperial College, UK [link]
• Hydrogen Materials Group, University of Birmingham, UK [link]
• Icelandic New Energy [link]
• Japanese Hydrogen and Fuel Cell Demonstration Project [link]
• Technical University of Denmark [link]

Figures:

Sources:

• "International Energy Agency" International Energy Agency [link]
• "International Energy Outlook 2005." Energy Information Administration [link]
• "DOE Hydrogen Program" DOE Hydrogen Program [link]
• Brandon N, "Fuel cells: a chemical reactor in every home and car?" Chemical Engineer, 2001, Pp: 46 - 48
• Meakin, I "Fuel Cell Development in Japan: an outline of public and Private Sector Activities." April 2003. Birmingham University [link]
• Harris R. et al "Hydrogen Storage: the grand challenge." The Fuel Cell Review. Vol 1 (1), p.17. 2004 [link]

At A Glance:

When:

11-20 years

Where:

Global

How Fast:

Years

Likelihood:

High

Impact:

Low

Controversy:

Medium

Related Outlooks: