Hydrogen Economy: An Impractical and Costly Undertaking, New Report Reveals

Published on June 14, 2024

WINNIPEG, June 14, 2024 – Using variable and intermittent renewable energy to produce hydrogen for stabilizing energy supplies may seem promising at first glance. However, a recent report by the Frontier Centre for Public Policy, titled “Why We Should Be Skeptical of the Hydrogen Economy,” reveals significant flaws, making the hydrogen economy an impractical and costly undertaking.

The report, authored by Hügo Krüger and Ian Madsen, outlines several critical issues with hydrogen as an energy solution.

Key Findings:

Low Energy Density and Safety Risks:
While hydrogen’s high energy per unit mass may seem advantageous, its low energy density compared to established fuels like gasoline, diesel, and natural gas makes it inefficient for storage and transportation. Krüger emphasizes that hydrogen is three times more explosive than natural gas, presenting substantial safety risks.

Costly Storage and Production:
Storing hydrogen as a gas requires massive, expensive storage vessels. Madsen points out that the electrolysis process, essential for producing hydrogen from water, remains prohibitively costly and unlikely to become economically viable in the near future. Producing hydrogen from natural gas is cheaper but results in unwanted carbon dioxide emissions, undermining environmental objectives.

Infrastructure Challenges:
Existing pipeline infrastructure cannot transport pure hydrogen due to hydrogen embrittlement, which degrades the mechanical properties of metals, making them brittle and prone to failure. Krüger notes that constructing new Teflon-coated pipelines to transport hydrogen safely would cost hundreds of billions of dollars in North America alone, further questioning the practicality of a hydrogen-based energy system.

Technological and Economic Hurdles:
Hydrogen technologies, such as fuel cells for transportation, face significant challenges in durability, efficiency, and cost. Madsen highlights that many hydrogen technologies are still in early development stages, requiring substantial investment without guaranteed returns. High production and storage costs, coupled with the need for new infrastructure, make hydrogen an economically unviable option.

A More Viable Alternative: Synthetic Fuels
Krüger and Madsen suggest that investing in synthetic fuels produced using the Fischer-Tropsch process is a more realistic solution. This process converts syngas – a mixture of carbon monoxide and hydrogen – into liquid hydrocarbons. Historically, synthetic fuels have been successfully used by Nazi Germany and South Africa’s SASOL during Apartheid to ensure energy independence. Investing in synthetic fuels could leverage surplus renewable energy more effectively and provide a cost-effective and environmentally friendly alternative to traditional fossil fuels.

Renewable Energy Misconceptions:
Contrary to popular belief, the authors write that renewable energy is neither inexpensive nor environmentally benign. Its high variability necessitates significant overbuilding of capacity, as seen in Germany. This overbuilding leads to reliability issues during periods with no wind or sun, known as Dunkelflaute, forcing reliance on fossil fuel plants to maintain a stable electricity supply. The cost of running a parallel idle system alongside a renewable-based one explains why German household electricity prices are among the highest in the world.

Widespread Skepticism:
Krüger and Madsen are not alone in their skepticism about the viability of hydrogen. Prominent voices in the energy sector, including Michael Liebreich, Mark Jacobson, and Robert Bryce, have also expressed strong skepticism about the hydrogen economy, citing its inefficiencies and high costs. Hydrogen is not a primary energy source but an energy carrier, requiring production from other energy sources such as natural gas or renewable electricity. The high energy requirements for hydrogen production, storage, and transportation further diminish its viability.

The Frontier Centre for Public Policy’s report concludes that hydrogen, as an energy solution, does not hold up under scrutiny. The physical properties of hydrogen, coupled with its high production and infrastructure costs, render it an impractical choice for large-scale energy storage and transportation. The Fischer-Tropsch process for producing synthetic fuels is a far more viable alternative, especially in regions lacking natural gas. Synthetic fuels offer a proven, cost-effective, and environmentally friendly solution, making the hydrogen economy an uncompetitive and impractical venture.

About the Authors:

Hügo Krüger is a structural engineer from Pretoria, South Africa, with extensive experience in the nuclear, concrete, renewable, and oil and gas industries. He resides in France and holds a BEng in Civil Engineering and an MSc in Nuclear Civil Engineering. He frequently comments on energy-related matters.

Ian Madsen is the Senior Policy Analyst at the Frontier Centre for Public Policy, specializing in energy, climate, and related issues.

Read the report here.


Hügo Krüger

Ian Madsen

Marco Navarro-Genie
Director of Research
Frontier Centre for Public Policy

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