In this second episode of the Hydrogen Series, Al Rettenmaier and Ginger Elbaum discuss green hydrogen--how it is made, how it is used, what the economics are, and why it is considered the most valuable of the three classifications of hydrogen. We hope you can join Ginger and Al for their continuing discussion of hydrogen.
In this second episode of the Hydrogen Series, Al Rettenmaier and Ginger Elbaum discuss green hydrogen--how it is made, how it is used, what the economics are, and why it is considered the most valuable of the three classifications of hydrogen. We hope you can join Ginger and Al for their continuing discussion of hydrogen.
Ginger Elbaum (10s):
Welcome to the top three by E3, a monthly podcast about the intersection between engineering energy and project finance. My name is Ginger album, managing director at E3 and I'll be your host today. And today I'm joined by Al Rettenmaier, head of E3's oil, gas, and chemicals practice. Welcome Al.
Al Rettenmaier (26s):
Thanks, Ginger. It's a pleasure to be here with you.
Ginger Elbaum (28s):
Yeah, thanks for coming on today. So I'm really excited about today's topic as a reminder to our listeners. Today is a second session in a series of podcasts regarding hydrogen. So Al tell us, tell us what we're gonna talk about today.
Al Rettenmaier (43s):
Topic is green hydrogen specifically, and as we talked about last week, there's really three basic classifications for hydrogen sustainability and that's green, blue, and gray, and green is the top of the pyramid. They're the, that's the most valuable classification of hydrogen. So what I wanted to talk about is how do you make green hydrogen? Well, at this point in time, we typically are using green electricity and electrolysis. So it's pretty simple green electricity used to electrolyze water. And when water associates, it makes hydrogen on the cathode side and it makes oxygen on the anode side.
Al Rettenmaier (1m 27s):
And then we capture that hydrogen and send it to market. The technology that's typically used is either broken into two categories. There's proton exchange membrane and alkaline. Alkaline has more history. In fact, when you did science experiments in high school, where you did electrolysis of water, maybe some of the listeners have done that. You put a cathode and anode in the water and it starts to bubble. And then you can actually do the pop test at the top of the tube where the hydrogen comes out and confirm when it pops, you put a spark there it'll have a little explosion, tiny explosion, that's the idea anyway.
Al Rettenmaier (2m 13s):
And so proton exchange membrane or PEM is really what I'm seeing in the industry is being, has the most area of focus and probably the most promise some of the advantages of PEM is that it can achieve a fast startup, like within a few seconds, it can be idling indefinitely. And then all of a sudden when the sun comes up or the wind turbine starts spinning, or the hydro dam kicks on, it can go into production mode from a very, in a very rapid manner. The other thing is with alkaline systems, they, they do have a very strong alkaline and solution that is part of them.
Al Rettenmaier (2m 59s):
And that that is corrosive and it can, it can be a maintenance headache with alcohol in the PEM you're using really just pure water purified water. PEM has very simple maintenance. It's kind of a swap out of components that you do. There's fewer components than alkaline and, and it's thought in the industry, and there's a lot of focus on this that there's more potential to reduce costs with PEM. And the other another key advantage is that you make higher pressure hydrogen with PEM. You can get hydrogen up to 40 atmospheres off the cathode side of the membrane. So that's pretty exciting.
Al Rettenmaier (3m 39s):
That's a lot of energy that you get, which is actually generated by the chemical reaction. The electrolysis reaction that hydrogen is pulled through by the, the cathode. And it can, it can be pulled through a 40 atmosphere, pressure differential. That's how strong that reaction is. One more thing about PDM is that it's also the same technology that's used for fuel cells. So, you know, so you would think that you'd be able to set up a system where you can do electrolysis when the sun is shining and then when the sun goes down, you could actually reverse it and do a fuel cell and re-export that power from that hydrogen that you made to the grid is renewable energy with the same stack potentially.
Ginger Elbaum (4m 25s):
Oh yeah. That's, that's really neat. That's exciting. So what, what are the key elements of a green hydrogen plant then?
Al Rettenmaier (4m 33s):
Right. Good question. Well, first of all, we talked about green electricity. So you have to have a source for that. It's gotta be either solar wind, hydro power. I think biomass will qualify. There may be a pathway there or any, any other kind of renewable electricity, and then you'll need an interconnection to that. And the electricity used in electrolysis is significant. So it's a fairly healthy interconnection that you'll need. You know, these, these systems are 25 50 megawatts, so we're going to talk about, and so those are, those are expensive connections. You know, there's millions of dollars that you'll spend either you or your, your utility will spend to connect you all that electricity is fed to a rectifier.
Al Rettenmaier (5m 19s):
And what the rectifier does is it converts it from alternating current to direct current. And so that is, that's a component of the cost. And typically those are supplied by the electrolysis system vendor. And, but the real nugget that they have, the real core piece of technology is the electrolysis stack itself. And we call it a stack because it's actually a stack of cells and these cells are referred to as membrane electrode assemblies or MEA. So if you start throwing that term around, if you're having a cocktail party and you want to talk about electrolysis and you start throwing around, MEA people are going to go, oh, this really fun parties.
Al Rettenmaier (6m 3s):
Oh yeah, yeah. So, so yeah, and then, but the MEA is really interesting. I'm not going to go into it too much. Now we're going to stay at the higher level because you asked about the components. Well, the other thing you need is water and you need water treatment. So you have to treat this water to a pretty high polishing is kind of what the term in the industry is. It's about 10 mega home is the specification for the water that you supply to the stack. And then you have to have cooling because a lot of the energy that you feed this green energy, actually the inefficiency ends up as heat that you have to remove from the system.
Al Rettenmaier (6m 45s):
So you cool that, so you need a cooling tower or aerial fan or something like that to remove that heat. And, and it's kind of intricate, like you've got to feed all this water to these stacks and you've got to remove the heat. And then you got to feed all this electricity. So there's a lot of wire and pipes and small pipes and things like that, that go into these systems. Then once you make your hydrogen and you get it at the 40 bar, if you're using PEM, you may even have to compress it further for storage because 40 bars storage is pretty expensive. You really want to be at a higher, a higher pressure than that. Maybe, you know, maybe a hundred or, or more bars or more.
Al Rettenmaier (7m 27s):
And, and then you store it. You can sort as a compressed gas, you can store it as a liquid or you can convert it to ammonia. And I think some of the bigger applications may be looking at ammonia because ammonia makes a very efficient carrier of hydrogen. We'll get into that in a future podcast as well. And then all of this has to be in a secure facility and you'll need operators and lighting communications, things of that. So you've got to have a pretty, a pretty tight facility at the end of the day because there's a lot of components in here that you don't want people exposed to.
Ginger Elbaum (8m 4s):
Sure. So, so, you know, Al, I mean, you've got your, you know, potentially a cooling tower. You've got your, you know, electrolysis units, your rectifiers. So how big are these PEM electrolysis facilities? I mean, how big is, what kind of acreage are we looking at,
Al Rettenmaier (8m 23s):
Right. Yeah. Well, currently a world scale PEM facility is about 10 megawatts, but they're, I'm in development that are, I know, I know of at least a 20 megawatts and, and there's other sizes. And actually we're working, we've worked on a 25 megawatt size as well as up to 50 megawatts. So we know these things are, are going to be bigger. And for that size facility, you need about, well, for the 25, something like two acres of land and maybe for the 50, like five, and that, that gives you enough room to have a safe maintainable facility. The other thing on size is that the stack sizes themselves.
Al Rettenmaier (9m 4s):
So in each, in each electrolysis unit you'll have multiple stacks. And so these stack sizes are increasing just a couple of months ago when we were working on a project, we were looking at a one megawatt stack and just a few weeks ago, it seemed like everybody was all of a sudden offering 1.2, five megawatts stacks. So that's a significant jump in a short period of time. And that's the kind of development and cost reduction that we think we're going to see continue. I think the stack sizes will get bigger and that'll reduce costs.
Ginger Elbaum (9m 40s):
Right. So, so to Al to scale a facility, you increase the number of stacks.
Al Rettenmaier (9m 45s):
Yes, that's right. It really is. It's very modular that way. So you, you add more stacks, you get more hydrogen takes more electricity. Right.
Ginger Elbaum (9m 55s):
Okay. All right. Interesting. So what is the, what's the capital cost for green hydrogen plant,
Al Rettenmaier (9m 60s):
Right? Yeah. Well, the main cost is the, is the staff costs that PEM stack costs and those you get from a specialty company plug power now, or, or others. And those really set the capital cost pretty much, but we believe that cost reductions are going to be driving those costs down, but the all-in cost per facility when we look at compression and we look at a little bit of storage and we look at the cooling tower and all that stuff, and the facility itself, it comes in about a little less than a million dollars per megawatt for an installed c
Ginger Elbaum (10m 38s):
Interesting. And then how much hydrogen do you make per megawatt then?
Al Rettenmaier (10m 43s):
Right. Yeah. Currently, you know, the efficiency of PEM electrolysis is in the range of 58 kilowatt hours per kilogram. That works out to be about a 57% efficiency. And so if we envision a 25 megawatt installation, that'll produce about 3.7 million kilograms in a year.
Ginger Elbaum (11m 6s):
And so what is the, so what does that, what is the cost to produce a kilogram of hydrogen? Then
Al Rettenmaier (11m 11s):
It's a, it's kind of high actually at this point in time, we're hoping that it comes down with new developments, but it's very highly dependent on electricity costs. You know, when we think about electricity in an industrial setting, maybe the lowest costs you can imagine is something like 4 cents. If you're looking at off peak electricity, or you're looking at excess generation from a solar field that, you know, that has no market, maybe there's not enough distribution or transmission, you know, you can imagine maybe it gets down to a cent and a half or something like that. But if we look at the force and electricity, the cost just for the electricity and the operations and some capital recovery would be about $2 and 78 cents per kilogram.
Al Rettenmaier (11m 59s):
Now of that, the electricity component is something like 85% of the cost. And so if you look at just the electricity component and compare it, it's about $20 per million BTU of hydrogen. And if you compare that to natural gas, you're looking at $3, you know, I don't know depends where you're at in the actual gas market, but you might be looking at $3 to $4 per million bTU's. So it's a significant premium, but you know, what's, what's nice about hydrogen is it's storable and you know, and the storage aspects of hydrogen are what's really driving the, driving the industry and driving everybody take a good look at it.
Ginger Elbaum (12m 43s):
Right. Right. Well, and you know, we, we attended and you spoke at the hydrogen and PlatE3 ts hydrogen conference recently, and they were talking about, you know, green hydrogen and comparing that to battery storage. So, you know, storage is a really interesting component and potential here in long-term storage. Right. So, so, so would this be considered efficient?
Al Rettenmaier (13m 5s):
Yes. I mean, I think when you compare it to battery storage, for instance, it looks very efficient on the storage basis. On the production side. A lot of this excess energy goes into the inefficiency is generates excess heat, which you have to remove and you have to cool and basically send that to the atmosphere. If there was a way, you know, if we can come up with a way to reuse that heat, and there are some cycles I think that could be adapted for this, that would greatly improve the efficiency because basically about 40% of the electricity has to be removed as heat right now. So if you could recover, you know, even half of that, it would make a big, big difference.
Al Rettenmaier (13m 47s):
But overall, the efficiencies about 57% as it, as it stands.
Ginger Elbaum (13m 52s):
Interesting. Okay. Well, so Al I mean, you know, it's top three by E3. So what are the top three points that you'd like that you would like for our listeners to walk away with today?
Al Rettenmaier (14m 3s):
Right. Yeah. I think the first one is, is a basic point and it we've talked a lot about PEM proton exchange membrane. And I think our listeners can take away that that really is where we're seeing the most focus for development research, as well as future installations. The second one would be if you kind of have an idea of, of a hydrogen project, and you think in terms of $1 million per megawatt installed, you're going to be in pretty good shape. It's somewhere around there. And then as you think about the efficiency, the overall efficiency is about 57%. And when you start comparing that across for storage, it actually looks pretty, pretty attractive as a storage mechanism.
Ginger Elbaum (14m 46s):
All right. Well, I'll thank you. This has been really interesting as always, and know, appreciate your coming on today and, you know, thank you to our listeners for listening today. This is a reminder again, I mentioned at the beginning, but this is the second session in a series on hydrogen. So though there will be more to come, but if you have any questions about hydrogen or oil, gas, and chemicals, or have any suggestions for future hydrogen podcast topics, you feel free to reach out to us at e3@e3co.com. Thanks again for listening and Al, thanks again. Appreciate your time.