New policies and approaches to grid management will be needed to facilitate a hydrogen boom that serves shipping, aviation, steel and other industries, panelists said Thursday at the 2022 MIT Energy Conference's "Developing the Hydrogen Economy" session.
Companies are increasingly calling Avangrid to ask how hydrogen can help them achieve their decarbonization goals, Lindsay Ashby, a senior business developer for Avangrid Renewables, said during the panel. But she and her fellow panelists agreed — it's not just environmental benefits driving interest in hydrogen. There's also a strong financial motive.
“I think this is all about green — not just the environmental imperative but to make money doing it,” Brett Perlman, CEO at the non-profit Center for Houston's Future, said on the panel. Customers in the warehousing industry that have converted their battery-powered indoor forklifts to hydrogen fuel cells are saving an average of $1 million per site per year, according to Preeti Pande, panelist and chier marketing officer for hydrogen fuel cell manufacturer Plug Power.
Will the creation of a hydrogen economy look like the transition to wind and solar power? Probably not, Thursday's panelists said — hydrogen isn't starting from scratch and the potential may be even greater.
“We've done this before; we've seen this movie several times,” Perlman said. “In some ways, this is just the sequel. And that is why I'm so bullish this time — we know it's not a dream. It's something we've done before.”
One misnomer in the industry is that hydrogen needs to get "to scale," said Dharik Mallapragada, the panel moderator and a research scientist with the MIT Energy Initiative. Hydrogen is already produced and consumed at scale, he said. What recent conversations aim to ascertain, he said, is how to change and expand applications of the molecule, particularly within the energy sphere.
And the opportunity for growth, Perlman said, is significant. Heavy shipping, including aviation and maritime shipping, as well as heavy industry, like cement and steel, are turning to hydrogen as a possible solution. These are industries, Perlman said, where decarbonization hasn't been considered feasible in the past.
But the versatility of hydrogen is both a strength and a weakness, Ashby said. Interconnection to the power grid can be especially tricky. Hydrogen production can consume energy and serve to balance the grid — or it can do neither. Producers of hydrogen could potentially get very creative with how they market their product to the grid, Ashby said, but only if grid management and regulatory policies allow for that level of flexibility.
On the other hand, a connection to the grid isn't necessary for hydrogen generation, Ashby said. An industrial operation making fertilizer from hydrogen could be located right next to a wind or solar farm, grid or no grid.
“This is a new market,” Perlman said. “This market doesn't really exist today — it exists for petrochemical companies, but not for shipping, aviation, cement or steel. And people are seeing a huge opportunity here.”