Part I – The Renewable Energy Future

Our goal in the clean energy industry is to decarbonize energy – fast. To do that, two things are required: zero-carbon electricity and a carbon-neutral chemical energy carrier. Here at Ideal Energy we have been working on the first with solar photovoltaic (PV) installations and battery-energy storage systems. In this series, however, we want to explore the second requirement, for a fuel suited to all of the situations renewable electricity and batteries are not ideal for.   

Many scientists, engineers, and policymakers believe renewable hydrogen offers the solution. Renewable hydrogen, also called green hydrogen, is hydrogen produced using electrolysis powered by a renewable energy source.  

To find out how renewable hydrogen could help us achieve a decarbonized energy economy, we spoke with Dr. Greg Wilson, an expert on clean energy technology and renewable hydrogen.

Dr. Wilson, an engineer by training, was the director of the National Center for Photovoltaics (NCPV) at the U.S. Department of Energy’s (DOE) National Renewable Energy Laboratory (NREL) from 2011 to 2018. Before that, he had a long career as an engineer in the chemical and semiconductor industries. After his career at NREL, he worked as a consultant for renewable energy companies, including Ideal Energy. He is now the Vice President, Science and Advanced Technologies at JERA Americas. This article is the product of several conversations with Dr. Wilson.

“Many people associate renewable energy with one thing: electricity,” said Wilson. “From a global carbon emissions point of view, however, electricity generation only represents 25–30% of global carbon emissions.”

The remaining 70–75% of our global carbon emissions will also have to be dealt with to completely decarbonize the world. Hydrogen offers a path to do that by addressing two problems: making the most of renewable energy and providing carbon-neutral fuels.

Getting More From Renewables – Hydrogen and Wind

Renewables like wind and solar generate power intermittently. Sometimes they produce too little power, which is why most solar installations are grid-connected. Sometimes they produce too much power. Wind energy, in particular, often overproduces. Because the U.S. has substantial transmission line constraints, we cannot transmit excess wind power to distant load centers around the country. We have to transmit power to local load centers where supply may exceed demand.

There are several solutions for this problem. The most common is curtailment, or simply shutting wind turbines down whenever the power generated exceeds the demand. Another option is battery energy storage. Battery energy storage systems work very well when the stored energy will be used within a few hours or days, which is why we install these systems for many of our solar customers. Other options, like pumping water into uphill reservoirs and compressing air in underground tanks, have shown promise for long-term storage in certain situations.

Converting electricity into hydrogen (H₂) via electrolysis offers benefits those other solutions do not. Hydrogen is better for long-term storage than batteries. It can provide energy storage in any elevation or climate, unlike reservoirs. In addition, it can be used on site or transported to more distant power plants using existing infrastructure.

Hydrogen can be burned in a combined cycle gas turbine power plant modified for use with hydrogen instead of natural gas. Co-locating a gas turbine power plant near a wind farm would address the intermittent nature of wind power by providing dispatchable generation. Solar and wind are non-dispatchable, meaning they cannot be turned on at will. Gas turbine peaking power plants, powered by natural gas, are the most common choice for dispatchable generation today because they can power up or down quickly and cheaply. Battery storage can also provide dispatchable energy when paired with wind or solar, but it provides a time constant of only a few hours. Renewable hydrogen can provide longer-term dispatchability with a carbon-neutral fuel.

Hydrogen can also be converted back into electricity in a fuel cell, providing the same dispatchable generation capability without the inefficiencies or localized emissions of combustion. (Hydrogen fuel cells emit only water.) A French project, called MYRTE, has proven the viability of this approach. MYRTE uses solar energy to make renewable hydrogen which is stored on site and fed into a fuel cell for grid stabilization.

Hydrogen in the Natural Gas Grid

It is also possible to inject hydrogen directly into the natural gas grid. A handful of research-scale projects at NREL and U.S. universities, as well as several dozen pilot projects in Europe, have proven the viability of this approach.

A 2017 uses a 60 kW PEM electrolyzer powered by the University’s solar array to produce hydrogen. The hydrogen is injected into the campus gas grid where it mixes with natural gas before being burned in the gas turbine power plant that powers the campus.

At the E.ON Falkenhagen project in Germany, built in 2013, a 400 MW wind farm powers 6 Hydrogenics alkaline electrolysis units with a total capacity of 2 MW. The resulting gas is mostly injected into Germany’s gas grid. Methanation capability was added to the facility in 2018, allowing the system to create synthetic methane.

Injecting hydrogen into the natural gas grid presents some challenges. Hydrogen can be mixed with natural gas up to around 5–10% without issue. Beyond that point there are two problems: hotter flames and hydrogen embrittlement.

Hydrogen burns very hot. At concentrations above around 10% hydrogen, appliances would have to be modified to account for the hotter flame, different flame geometry, and faster flame propagation.

Exposure to hydrogen causes hydrogen embrittlement of certain metals. Hydrogen embrittlement ultimately leads to fractures and failure of the metal. The mild steel used in our natural gas grid is particularly susceptible. At concentration above around 25% hydrogen, 316L stainless steel or other more exotic alloys would have to be used instead.

Replacing gas pipe and reengineering appliances are not practical at scale, so substituting hydrogen for natural gas is unlikely to exceed 5-10% in the grid. In dedicated applications, however, like industrial furnaces, peaking power plants, and combined heat and power plants, it may be practical to switch to higher concentrations of hydrogen or pure hydrogen.

Another option is producing synthetic methane, like in the E.ON Falkenhagen project. Renewable hydrogen is used for this process, as well. This reaction is similar to coal gasification in reverse – a catalyst causes hydrogen and either carbon dioxide or carbon monoxide to become methane and water. Methanation could be useful to produce carbon-neutral natural gas compatible with existing gas infrastructure. However, for methanation to work at a large scale, direct air capture of CO₂ would have to become viable.

The Other 75% – Hydrogen and Ammonia

The other major benefit of hydrogen is that it can replace many of the fossil fuels we use today. It can be injected directly into the natural gas grid. It can be transported to large facilities for use in combined heat and power plants. It has industrial uses as an essential ingredient in refineries (including refining carbon-neutral biofuels). It can power fuel cells in heavy transport applications. Industrial furnaces and kilns can burn it. Perhaps most important in terms of clean energy, it is the principal ingredient in the manufacturing of ammonia.

Ammonia (NH₃) is made from hydrogen and atmospheric nitrogen using an artificial nitrogen fixing process called the Haber-Bosch process. Hydrogen catalyzes a reaction that converts atmospheric nitrogen into ammonia. This process is critical to modern agriculture. Approximately , mainly in the form of anhydrous ammonia.

“One of the biggest carbon sources that we have to deal with is just merely producing ammonia, which is used broadly in Iowa for agriculture. Its global carbon footprint is on the order of 1-2%, depending on how you want to measure it, of the world carbon output,” said Wilson. “Just to make ammonia. It's crazy. It's a crazy number.”

The carbon is released when hydrogen is produced from fossil fuels. Using renewable hydrogen rather than hydrocarbon-sourced hydrogen would have a major impact on global carbon emissions.

Ammonia production represents a vast, existing market for renewable hydrogen. In this context, hydrogen is a commodity. Wind farm operators and utilities can sell any excess hydrogen they produce into the agrichemical market.

Wind farm operators could also manufacture ammonia themselves. Ammonia produced from renewable hydrogen has potential uses far beyond fertilizer. Renewable ammonia is an excellent energy store and carbon-neutral fuel. “It’s a wonderful hydrogen carrier,” said Wilson. 

Ammonia can be stored and transported more easily than hydrogen. It requires less cooling to change to a liquid state. The larger ammonia molecule is less likely to dissipate and leak. Liquid ammonia has an energy density nearly double that of liquid hydrogen. Production and safe handling of ammonia is well understood and there is plenty of infrastructure to support its distribution and storage.

“You can build ammonia fuel cells instead of a hydrogen fuel cell,” said Wilson. An ammonia fuel cell emits water and nitrogen ­– one of the principle components of air – making it as safe and free of emissions as a hydrogen fuel cell.

Safety

Many people hear hydrogen and think of the Hindenburg, but Dr. Wilson emphasized that hydrogen is safe. “We have 100 years of industrial and chemical experience with hydrogen,” he said. “It's just one more risk to manage. Not unlike managing the risk from high voltage at a utility or solar company.”

Handling hydrogen in an industrial context is well understood. The U.S. Department of Energy program devotes a great deal of resources to educating utilities and industry on hydrogen safety best practices.

For residential customers, the risk is virtually nonexistent. Research coming out of pilot projects in Germany indicates that hydrogen can be mixed to at least 10% with natural gas with no adverse consequences to equipment and no special knowledge needed by end users.

Why Iowa and the Midwest Could be the Persian Gulf of Hydrogen

Research-scale projects at NREL and commercial pilot projects in Europe show that renewable hydrogen technology works. The next step is a commercial-scale project in the Midwest using wind power to create hydrogen and ammonia for industrial and agricultural markets.

With and a huge demand for ammonia, Iowa is the ideal place to begin growing America’s hydrogen economy. – the highest percentage of any state in the nation – and is second only to Texas in total installed capacity with 10,664 megawatts (MW). Iowa is a major agricultural state with the . Iowa has a thriving biofuels industry and a large manufacturing sector – both of which use hydrogen extensively.

“Hydrogen in the state of Iowa has the potential to kind of wake a bunch of people up to the fact that renewable energy is way more than just solar and wind providing electricity,” said Dr. Wilson.

Dr. Wilson believes a commercial project in Iowa may be profitable right now – particularly with a subsidy of some kind – based on the current cost of wind-generated electricity in the state and the current price of commercially available electrolyzers. If so, a successful project here could spark a hydrogen rush throughout the Midwest.

The growth potential for the renewable hydrogen industry is hard to overstate. “The world has an existing market for very large volumes of H₂ and ammonia and these markets will have to be supplied with new zero-carbon processes,” said Wilson. “Beyond this, the H₂ market will grow substantially because H₂ will increasingly be used for fuel for heavy, long-distance transport, both truck and rail.” 

Part II – How Renewable Hydrogen Works

This is not the first time hydrogen has been promoted as the basis for our energy economy. In the early 2000s, articles like suggested that everyone would soon drive hydrogen fuel cell-powered cars emitting only water vapor at the tailpipe.

Hydrogen had support from the auto industry, the oil industry, and the Bush administration. Automakers wanted to electrify their vehicle fleets, but batteries were far too expensive to provide a reasonable range at an affordable price. The oil industry saw in hydrogen a way to produce a ‘zero-emission’ fuel from their existing hydrocarbon assets. The Bush administration was enthusiastic about hydrogen’s energy portability benefits. Ultimately, however, that vision of the hydrogen economy did not pan out.

The new vision of hydrogen is to use it as an energy carrier for difficult to abate sectors – all of the situations electricity and batteries are not suited for. “What I would say is driving it more now is this bigger decarbonization effort of everything beyond electricity,” Wilson explained. “Heating buildings, heat for industry, and transportation.”

Producing renewable hydrogen for existing markets is a perfect stepping stone toward this vision. “If you can use renewable energy to make something that you already need, you can displace a lot of carbon along the way,” said Wilson. “This is the idea about how you get started with a hydrogen economy that's really quite different than where we were 20 years ago.”

How Hydrogen is Made from Fossil Fuels

Right now, hydrogen is sourced almost exclusively from fossil fuels. Approximately 76% comes from methane, and the remaining 24% from coal. The world produces 70 billion kg of hydrogen every year from fossil fuel sources.

Steam methane reforming (SMR) using natural gas as a feedstock is the process responsible for most of the world’s hydrogen supply, and around 95% of the hydrogen in the U.S. Methane reacts with steam at high temperatures and under pressure to produce hydrogen and carbon monoxide.

Extracting hydrogen from coal is also possible. In a process called coal gasification, coal is heated and blown through oxygen and steam. The resulting gas, called syngas or synthesis gas, is a combination of hydrogen and carbon monoxide. The process can be continued by adding more water, causing the water gas shift, yielding additional pure hydrogen and carbon dioxide.

Hydrocarbon Hydrogen Chemistry

Steam Methane Reforming

CH₄ + H₂O → CO + 3H₂ 

Coal Gasification

3C + O₂ + H₂O → H₂ + 3CO 

Water Gas Shift

CO + H₂O → CO₂ + H₂

Both steam methane reforming and coal gasification generate carbon dioxide. “Either way,” said Wilson, “you're emitting an enormous amount of carbon in the process.” 

How Renewable Hydrogen is Made

Hydrogen can also be made using a process called electrolysis, which is the application of an electric current to force a chemical reaction to take place. Water decomposes into hydrogen and oxygen when subjected to electrolysis. To make renewable hydrogen, three things are needed: a renewable energy source, water, and an electrolyzer.

Renewable Hydrogen Chemistry 

Electrolysis

2H₂O → 2H₂ + O₂ 

Fuel Cells

2H₂ + O₂ → 2H₂O

Alkaline water electrolysis is the oldest and most mature electrolysis technology with the lowest long-term cost. These electrolyzers use two electrodes submerged in water with alkaline electrolytes added. While suitable for high-volume steady-state production, it does not tolerate intermittent production very well, which makes it a less desirable choice for wind farms.

Proton exchange membrane (PEM) electrolyzers are commercially viable, but less mature than alkaline water electrolyzers. PEM uses a solid polymer electrolyte rather than a liquid alkaline water solution. The key advantage of PEM is that it is suited to intermittent production, making it a good choice for use with intermittent renewables like wind and solar. 

Solid oxide electrolyzer cells (SOEC) are solid oxide fuel cells (SOFC) run in reverse in a regenerative mode. They are still in the developmental stage. Like PEM, they use a solid oxide, however, the material used is different – usually zirconium dioxide, a ceramic. SOEC may offer higher efficiency and lower material cost than PEM, and because they are reversibl,e they can be used to generate electricity from stored hydrogen without the need for a separate fuel cell or gas turbine power plant.

The Cost of Hydrogen

Renewable hydrogen has not yet reached price parity with hydrogen made from fossil fuels or with gas and diesel. In 2018, the cost of producing hydrogen from methane using SMR was around $1.95/kg. As of 2024, the Department of Energy the cost of renewable hydrogen at $5-7/kg (in 2022 dollars without subsidies). To displace gas and diesel, renewable hydrogen needs to reach $2.00–2.50/kg. (A kilogram of hydrogen has around the same energy content as a gallon of gasoline.)

Projections indicate that the cost of renewable hydrogen could fall into that range when two conditions are met: first, electrolyzers need to be integrated with large renewable energy projects like Iowa’s vast wind farms or utility-scale solar installations; and second, electrolyzer technology must reach economies of scale.

Dr. Wilson’s calculations show that with electricity prices of ¢1.5/kWh hydrogen made with PEM electrolyzers could reach $1.70/kg in a smaller distributed plant and $1.45 in a large centralized plant, based on the projected cost of a PEM plant in 2030. With additional research and development advances and industrial-scale production, prices could fall as low as $1.14/kg.

To Dr. Wilson, this indicates that renewable hydrogen today is in a similar position to solar photovoltaics eight to ten years ago – on the verge of cost-competitiveness with fossil fuels. The levelized cost of energy of wind and solar have plummeted in the last decade and are . The cost of producing renewable hydrogen is poised to follow a similar trajectory.

Part III – Decarbonization and the Big Energy Picture

The transition to a renewable hydrogen economy is already underway. In the last year, several huge hydrogen projects have been announced. The HyGreen Provence project in France will have a 1.5 GW capacity, powered by solar energy. The NortH2 project in the Netherlands is expected to have a 3–4 GW capacity by 2030 and a 10 GW capacity by 2040. The Asian Renewable Energy Hub will be powered by 12 GW of dedicated solar and wind in Australia connected via undersea high voltage transmission lines to hydrogen electrolyzer plants in Indonesia and Singapore.

A number of American projects are also underway, many of which are expected to be funded in part by the Hydrogen Hubs program. The Infrastructure Investment and Jobs Act contains a number of provisions that will affect the hydrogen industry, including $8 billion for development of large-scale Regional Clean Hydrogen Hubs. Over 70 hubs entered the competition. In late 2023 seven winners were announced.

Projects like these signal a path toward widespread use of hydrogen beyond energy storage and ammonia production. With enough hydrogen production, it will be possible to use hydrogen to decarbonize rail, heavy trucking, ocean-going ships, heavy industry, and even air travel.

Decarbonizing Rail

Wilson thinks electrifying railroads in the U.S. is unrealistic due to the scale of the work involved. “Putting electrical lines over the rail lines [even] in Iowa – it’s not happening,” said Wilson. Instead, he believes, we need to make a liquid fuel that is completely carbon neutral. There are two ways to do this.

One is to use hydrogen or a hydrogen-based fuel like ammonia. These fuels could be burned directly in a modified internal combustion engine, or used to power a fuel cell. Fuel cells are the more attractive option because of their higher efficiency compared to combustion. Several rail companies are exploring this option. Canadian Pacific Kansas City is trialing a hydrogen fuel cell locomotive tender prototype, and hydrogen-powered light rail projects are already operational in Quebec.  

The other method is to reproduce current liquid fuels, including diesel, gasoline, and jet fuel, with carbon-neutral equivalents. A number of oil companies like Royal Dutch Shell, BP, and Total plan to do this using captured carbon supplied by direct air capture (DAC) technology. DAC, which draws CO₂ directly from the atmosphere, is very much still in the developmental stage, however.

Producing carbon-neutral biofuels is another possibility. “We have an enormous amount of captured carbon from agriculture and from normal routes of biomass,” said Wilson. Refining biomass feedstocks into a high quality diesel requires hydrogen. With renewable biomass feedstocks and renewable hydrogen in the refining process, the end result is a carbon-neutral biofuel. There is probably not enough cheap, high-quality biomass to replace all fossil fuels, but enough is available to decarbonize part of the transport sector.

Decarbonizing Ships

Ocean-going ships will need to be powered by a fuel that can be converted to electricity in a fuel cell. Ammonia is an excellent option because it has a significantly higher energy density than hydrogen. Another option is renewable methanol, which is made from renewable hydrogen, and captured carbon dioxide and carbon monoxide. Several dual-fuel (diesel-fueled or methanol-fueled) ships are already traveling the world’s oceans.

Decarbonizing Heavy Transport

“What will happen with transport is you need to have either full electrification or a completely renewable fuel,” said Wilson. Batteries have become cheap enough and good enough that there is no longer much incentive to power passenger vehicles with hydrogen. As battery capacity increases, prices go down, and recharge times are reduced, sales will only accelerate. “Light vehicle transport is almost certainly going to switch to batteries.”

Heavy trucking presents a greater challenge than passenger cars and light trucks. Batteries with the capacity to power a truck hauling 80,000 pounds 600–700 miles are prohibitively large and heavy. The same is true of heavy machinery. No battery technology on the horizon is anywhere close to solving that problem.

Wilson thinks the solution for trucking is similar to the solution for rail: a carbon-neutral fuel. That could be hydrogen or ammonia powering a fuel cell, or it could be carbon-neutral biodiesel refined with renewable hydrogen. The hydrogen fuel cell approach is gaining significant traction both in the U.S. and overseas. Carbon-neutral biofuels will likely be implemented as well, because it will likely take decades to replace trucking and machinery fleets worldwide.

Decarbonizing Aircraft

Wilson believes the solution for most air transport will almost certainly be biofuels. Small planes flying short-haul flights could be electrified, but range and size will be severely limited. “Air transport will not be completely electrified anytime soon,” said Wilson.

Although combustion is less efficient than fuel cells, Wilson believes high-efficiency turbines burning jet fuel made from biomass is a viable long-term solution. “NREL, my old lab, is a pretty big believer that you can meet all the world's demand for jet fuel with the carbon coming from bio sources,” said Wilson. “The hydrogen that you need to refine it into jet fuel would come from electrolysis, from renewable electricity.”

Replacing Fuels in Heavy Industry

Heavy industry is a major source of CO₂. Steel and iron production alone is responsible for . Hydrogen is an excellent fuel for a variety of industrial applications where very hot flames are required, but electric arc furnaces are not ideal. “Hydrogen is viewed as a really good way to switch industrial heat sources from carbon based fuels to a non-carbon based fuel,” said Wilson.

There are industrial processes other than combustion where hydrogen can help decarbonize industry. In the steelmaking industry, for example, blast furnaces feeding basic oxygen furnaces are being replaced by electric arc furnaces due to environmental regulations and changing feedstocks. Blast furnaces use iron ore as a feedstock, while electric arc furnaces use scrap steel.

As the quality of scrap steel continues to decrease, virgin iron has to be added to dilute the contaminants. In the past, blast furnaces were the primary tool used to make iron from iron ore. Now, the steel industry is increasingly using direct reduced iron (DRI) as its source of virgin iron. DRI is made by , which contains both hydrogen and carbon monoxide. No melting is involved. Right now natural gas is used as a feedstock, but renewable hydrogen could take its place.

Long-term Storage of Energy

The need for seasonal storage of energy will also drive development of hydrogen-based fuels, because batteries are not well suited to long-term storage. Here, again, ammonia is an excellent candidate.

“Batteries are good for a couple days of storage,” Wilson explained. “Beyond that you want to convert electricity to chemical bonds.” For short-term storage of days or weeks, hydrogen is ideal. For long-term storage, ammonia is better because it is denser, less likely to dissipate, and the infrastructure to store and transport it is widespread. 

Another option is methane made from biomass sources – if it can be produced cheaply enough. Like hydrogen and ammonia, methane can be converted directly to electricity via fuel cells, avoiding the inefficiencies of combustion. It can also, of course, be pumped into the existing gas grid. Renewable hydrogen could be blended with biomethane for transport, storage, or use in the grid.

Building Heat

Wilson thinks residential, commercial, and industrial buildings will eventually switch to electric air source heat pumps for space and water heating. In some applications, like high altitude, ground source heat pumps may be a better option. Meanwhile, combustion systems fueled with a mix of renewable hydrogen and biomethane will likely be in service for many years to come. 

The Big Energy Picture

Wilson sees the transition to a decarbonized world not as a leap, but as a sequence of steps – with hydrogen playing a part in each.

“This is the big energy picture. You've got a market for hydrogen now and you need that non-carbon hydrogen to take away all the carbon we're emitting for all the hydrogen we use today. Then you use that as a stepping stone into making renewable fuels on a big scale.

“You want to prove commercial viability of renewable hydrogen. Next, or maybe even parallel to it, renewable ammonia. Both of those are critical steps in showing the industrial world how they're going to make money from renewable fuels, decarbonized fuels.

“And that is how you decarbonize a big piece of industry, if not all of it. It's how you decarbonize all of the rest of transport. And then when you fully decarbonize electricity, fully decarbonize transport, fully decarbonize industry, decarbonize the smaller ones like building heat – you decarbonize the world.”

Updates – This article was first published in August 2020. The most recent update was in February 2025. Some pricing information was updated and a brief section on the Hydrogen Hubs program was added. In addition, minor changes were made to reflect the current status of some projects and technologies, for example the use of methanol in shipping, and the progress of hydrogen rail pilot projects.