In 20120, the Hydrogen truck company Nicola went public by merging with a spa catalyzing interest amongst investors for hydrogen. Technologies Nicola Founder Trevor Milton was eventually charged with Securities fraud and the company has been a complete failure. Nevertheless, many people still claim that hydrogen power can play a key role in decarbonization and achieving climate change goals. so much so that governments around the world have committed over $280 billion in subsidies for so-called green Hydrogen.

Many have touted the possibility of zero emission hydrogen powering trucks, airplanes, and even cargo ships. In recent years, hydrogen fuel cell power plants have gained limited adoption for electric utility companies, primarily in South Korea There's been so much hype around Hydrogen that a number of issuers created Hydrogen Economy ETFs in 2021. Although their share price performance has been disastrous, as we've looked into the much haunted Hydrogen Economy, we've realized that it's not nearly as green as it Advocates Want you to believe? It's also very difficult to see a path to commercial viability for many of the use cases that PR Hydrogen activists help. As we will show in this video, the subsidies that governments have ported into green Hydrogen may be one of the biggest wastes of money in human history.

The idea of generating electricity with hydrogen isn't new. The first hydrogen fuel cell was created in 1839 by the British inventor. Sir William Grove The basic idea is take water which is made up of hydrogen and oxygen atoms. If you run electricity through the water, you can separate the hydrogen and oxygen atoms which can then be stored separately if you recombine them, they'll turn back into water and release electricity.

The hydrogen itself doesn't create electricity, it just allows you to store electricity. The hydrogen effectively acts as a battery. Sir William Groves Hydrogen Generator Ator was an impressive scientific accomplishment, but it had limited real world applications because of the small amount of electricity it could store. So for the next 150 years, people paid little attention to hydrogen electricity.

This changed in the 1960s as NASA was conducting research for the Apollo space mission. They needed a way to power the spaceship after it left the Earth's atmosphere. Gasoline or diesel generators were not an option because this would burn through their limited oxygen reserves. Batteries were also not an option because they' be prohibited ly heavy.

So they developed a hydrogen fuel cell far larger and more powerful than anything that had been made previously. By using hydrogen fuel, they could power the spaceship with water being the only waste product. Hydrogen made sense for the Apollo Mission because it was the only fuel source that met the technical requirements and cost was not an issue, but it failed to catch on due to its high cost. If you can burn fossil fuels, it is much cheaper than hydrogen.

There are other uses for hydrogen, for example, it is a critical component to produce ammonia, which which is used in many fertilizers. But for the next few decades there was very little interest in using hydrogen for energy storage. This all started to change around the turn of the century when people became worried about climate change and reducing carbon emissions. Hydrogen quickly popped up as an alternative to fossil fuels.

A hydrogen fuel cell only emits water vapor, making it a seemingly clean alternative. But there's the question of where the hydrogen comes from. Hydrogen is one of the most abundant atoms on Earth. The problem is, it likes to bond with other atoms, so there are substantially zero deposits of pure hydrogen that can be feasibly tapped.

The two main sources of hydrogen on Earth are water, which is two hydrogen atoms bonded to one oxygen atom and methane which is four hydrogen atoms bonded to one carbon atom. Methane is the main molecule in natural gas. If you combine methane with water vapor at high pressures, the hydrogen atoms can be separated into pure hydrogen. This process is relatively cheap because it requires very little electricity.

Hydrogen made with this method is called gray hydrogen. The other method is running electricity through water to separate the hydrogen and oxygen atoms. This, in and of itself creates zero greenhouse gas emissions. If you use renewable energy sources such as wind or solar to supply the electricity, you can create hydrogen with zero emissions.

This is called Green Hydrogen. Historically, hydrogen has primarily been used in fertilizer production. with no regard for greenhouse gas emissions. the vast majority, In fact, more than 90% of global hydrogen produced is Gray.

This is because Gray Hydrogen is significantly cheaper to produce than Green Hydrogen. The reason that Gray Hydrogen is so much cheaper to produce is because there's inner energy held in the methane molecule with a purely chemical process. The methane can be broken down and you can create electricity by combining the hydrogen with oxygen. If you want to use hydrogen as a primary fuel source, you have to use Gray Hydrogen.

Green Hydrogen, on the other hand, can only be used to store energy, not create it. The only place where hydrogen has been used as a primary fuel source to any significant degree is South Korea. Over the past decade or so, Korean utility companies have spent billions of dollars creating massive electricity generating facilities powered by Gray Hydrogen. So why is this only being done in South Korea In general, it makes no sense to create electricity.

With Gray Hydrogen. A substantial portion of the energy is lost during the process. It is thus far cheaper and more efficient to just burn the natural gas in the first place instead of turning it into hydrogen because you need a greater amount of to create any given amount of electricity. The carbon dioxide emissions are significantly higher compared to just burning the natural gas.

If it's more expensive and worse for the environment, why do they do it? In 2012, the South Korean government implemented a policy called the Renewable Portfolio Standard. This requires electricity utility companies to generate 14.5% of their total electricity from new and renewable energy sources by 2023 and 25% by 2026. The key is new and renewable renewable energy is things like wind and solar. Gray Hydrogen is considered new even though it's not renewable.

According to Sam Chully, which is one of the largest operators of gray hydrogen power plants in the country, hydrogen fuel cell power plants are the easiest thing to build that technically meets the government requirements. It is extremely difficult to understand what the South Korean government is trying to accomplish. They're forcing utility companies to waste billions of dollars on hydrogen fuel cell power plants which actually increase carbon emissions. The only way for Gray Hydro to have any environmental benefit is to use naturally occurring methane from sources like animal manure.

This is called Biogas. This creates the same amount of carbon emissions as using natural gas, but the methane has to be burned anyway, so it ends up being carbon neutral. But with the current Technologies it is much cheaper to use natural gas. The government does not require utility companies to use Biog gas, so substantially all of the Gray Hydrogen in Korea uses imported natural gas as a source of methane.

There's also something called BL Blue Hydrogen, which uses natural gas as its methane Source but uses carbon capture to prevent CO2 emissions. However, due to inefficiencies in the carbon capture process, it too is worse for the environment than just burning the natural gas directly. The key takeaway is that using Gray hydrogen as a primary energy source makes no sense for hydrogen to play any part in decarbonization. It has to be through energy storage.

There two ways Green hydrogen can be used for energy storage. A major problem for wind and solar energy is that its electricity generation is intermittent during times of strong winds. You might generate too much energy and vice versa at the moment. This problem is primarily solved by using fossil fuel power plants as Basel load power to supply electricity when the renewable sources are underperforming.

but if you want to transition to a 100% renewable grid, this will not work. You could theoretically use renewable energy to create green hydrogen when when demand is low and use this hydrogen to create electricity when demand is high. Another method is using green hydrogen to power automobiles or other modes of transportation. There are currently two models of hydrogen powered Passenger cars available for sale in the US, the Toyota Meai and the Hyundai Nexo.

In 2022, a grand total of 2500 hydrogen cars were sold in the US compared to 98,000 battery electric cars and 14 million total cars. The reason for the minuscule sales of hydrogen cars is their high cost, as well as the fact that hydrogen fueling stations are only available in a few select areas. For green hydrogen to become a meaningful part of the Energy System it would require hundreds of billions of dollars of investment in infrastructure to justify this. there needs to be a clear pathway to economic viability.

In 2022, the UK Parliament published a report based on numerous interviews with hydrogen exports both from industry and Academia The goal was to assess the economic viability of hydrogen in a variety of potential use cases. One of the experts they interviewed was Dr David Cbon, who is a professor of mechanical Engineering at the University of Cambridge. He explained the fundamental challenges associated with hydrogen. You start off with electricity.

You electroly the water to create hydrogen. Hydrogen's energy density is very low, so to store it in a reasonable volume of space, it needs to be compressed and liquefied at very low temperatures. This creates an energy loss of about 25% When you convert the hydrogen back into electric with a fuel cell, you lose another 50% So you end up losing 75% of the electricity you put in for a battery such as those using electric vehicles today, you only lose about 25% of the electricity. Thus, a hydrogen vehicle ultimately requires three times the amount of electricity as a battery electric vehicle.

Because battery electric cars already have sufficient range for the vast majority of people, there is no way that hydrogen cars can compete. The next area they looked at was Heavy Ground Vehicles such as Long Haul semi-rs for many routes, batteries would not have sufficient range and charging mid-trip takes too long. Hydrogen has the advantage that it can be refueled quickly. There's no reason a hydrogen truck couldn't be refueled as fast as a diesel truck.

However, the widespread adoption of hydrogen in Hgvs can only be achieved with an assurance that hydrogen will be widely available across the country. This would be a massive investment. The UK Parliament concluded that they need another 5 years of small scale testing before they can make a decision of whether not large scale investment can be justified. Of all the use cases, the UK Parliament considered the most promising was city buses.

Battery electric buses are infeasible because they need to run all day and don't have time to charge. but unlike semi- trucks, they can only operate in a limited area, making the hydrogen infrastructure requirements far lower. While Hydrogen buses make the most sense from an economic perspective, there are some serious safety issues we'll get into later. The next area they looked into was hydrogen powered cargo ships.

This idea was quickly rejected due to their large size and long Journeys cargo ships require a massive amount of fuel. Hydrogen takes up too much space. Hydrogen powered airplanes were quickly rejected as well. The technology required to power a large commercial airliner with hydrogen is multiple decades away.

In the medium term. Sustainable aviation fuel using Biogas is far more promising. They looked at Hydrogen for grid level energy storage. You could do the same thing that South Korea is currently doing, but instead of using gray Hydrogen, you could use green hydrogen created from renewable energy sources.

This was rejected as alternative methods of energy storage such as batteries are far more efficient. The final use case they looked at was home heating. in the UK. The majority of homes are heated using natural gas.

This is true in the US As well. natural gas boilers create significant carbon emissions. You could replace the natural gas boilers with hydrogen boilers. If you supply the hydrogen boiler with green hydrogen, you can heat your your home with zero emissions.

There's another way to heat your home with zero emissions. You can install an electric heat pump. It uses a gaseous refrigerant which absorbs heat from the outside air and compresses it at a high temperature to generate heat. Due to the nature of the refrigerant, it can absorb heat from the outside air even when the outside temperature is far colder than the inside temperature.

There are limits to this and it wouldn't work in places like Northern, Canada or Siberia, but for places like the UK and most of the US, it will work even during the depths of Winter. The the electric heat pump is very efficient Due to the inefficiencies of hydrogen. The hydrogen boiler requires six times more electricity compared to the electric heat pump. The main problem with electric heat pumps is that they're expensive.

In the UK a heat pump. costs about 12,000 lb to buy and install compared to just 2,000 lb for a hydrogen boiler. But with the electric heat pump, you'll eventually make your money back with electricity savings. It's difficult to predict the payback period, as you would have to project electricity prices years into the future.

If hydrogen is adopted for home heating, there will be a massive increase in demand for electricity, likely pushing up the price. It would thus be risky to roll out hydrogen boilers at a large scale because it's unclear how much the electricity would cost to supply them all with green hydrogen. The UK Parliament is unconvinced that hydrogen boiler deployment will prove economically viable. The overall conclusions from the report are: Bleak Hydrogen will only play limited roles in the UK's overall decarbonization plans.

It only makes sense to use hydrogen where other Technologies such as electrification and heat pumps are not possible practical or economic. And as we saw in the vast majority of use cases, electrification and heat pumps are practical. They further conclude that any company pursuing hydrogen related Technologies risks failure from non-. competitiveness.

Remember that of all the use cases they looked at, Hydrogen Buses was the only one that currently makes sense. But Hydrogen buses have their own problems. Pure hydrogen is extremely flammable. Its minimum ignition energy is about 1/10th out of natural gas.

If even a tiny amount of oxygen leaks into the hydrogen tank, it can ignite In July Of this year, a hydrogen bus in California combusted completely destroying the bus, which cost over $1 million. Luckily, it happened at 1:00 a.m. and nobody was injured. Internal Combustion engine and electric vehicles can also Catch Fire The difference with hydrogen is that the combustions are far more devastating.

In 2020, a hydrogen fuel cell plant in North Carolina exploded. Miraculously, nobody was seriously hurt, but 60 surrounding homes were damaged with one of them being damaged. Beyond Repair: In 2019, a hydrogen fuel cell power plant in South Korea exploded, killing two people and leaving six injured. As governments have subsidized hydrogen fuel cells, the number of explosions has increased substantially in recent years.

Because hydrogen fuel cells are an advanced technology, it is touted as a solution, but there is not a clear problem for them to solve. as we've shown other Technologies far outperform hydrogen in the vast majority of potential use cases. The government subsidies directed towards the green hydrogen economy have been a massive waste of money, introducing significant safety risks and contributing very little to decarbonization. On an unrelated note, we're excited to launch a new product we've been working on over the past year.

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What do you think about Hydrogen? Let us know in the comments section below. As always, thank you so much for watching and we'll see you in the next one. Wall Street Millennial Signing out.