The Backbone of Water: Hydrogen as an Energy Source

As governments accelerate efforts to diversify energy sources and transition towards innovative alternatives, hydrogen is emerging as a promising resource for Canada’s energy future. With its abundance, energy density, and potential synergy with other energy resources, hydrogen presents an opportunity for Canada to cement its place as a potential global energy leader while diversifying its energy mix. 

What is Hydrogen?

Hydrogen is the most abundant chemical element in the universe and is fundamental to the structure of matter. It is the lightest and simplest element, consisting of one proton and one electron. While hydrogen rarely exists in its element form on Earth, it is commonly found in compounds like water (H₂O) and hydrocarbons (such as methane, CH₄). 

Because hydrogen rarely exists in elemental form, the element is usually produced through chemical processes. The most common methods for producing hydrogen are electrolysis and steam methane reforming. Electrolysis has gained attention as a cleaner method, especially when powered by renewable energy sources. 

Hydrogen is also being utilized in several industrial applications, including refining (to lower sulfur content in fuels), ammonia production (for fertilizers), and methanol production (for chemical feedstocks). However, its potential as an energy carrier is gaining momentum as industries seek alternative sources to traditional fuels.

Blue Hydrogen vs. Green Hydrogen

While there are various forms of hydrogen, there are two main types of hydrogen production that are commonly preferred due to their practical benefits: 

Blue Hydrogen: Blue hydrogen is produced through steam methane reforming, with the addition of carbon capture and storage (CCS) technology. The CCS process captures carbon before they can be released into the atmosphere, making blue hydrogen a more efficient option than traditional natural gas use. However, some carbon may still escape during production. 

Green Hydrogen: This is produced via electrolysis, powered by alternative energy sources like wind, solar, or hydroelectric power. Green hydrogen is considered the most efficient form of hydrogen because it is produced using alternative energy. As alternative energy generation continues to scale, green hydrogen presents a pathway to decarbonize sectors that are difficult to electrify, such as heavy industry and transportation. 

Rise of Hydrogen in the Canadian Energy Market

Canada’s reputation as an energy powerhouse aligns well with the opportunities hydrogen presents. The country’s vast natural resources, abundant alternative energy potential, and established energy infrastructure create a strong foundation for hydrogen development.  Several Canadian provinces are leading the charge in hydrogen development:

• In Alberta, Canada’s largest hydrogen producer, has committed over $106 million to 37 hydrogen projects through programs like Emissions Reduction Alberta, focusing on production technologies and hydrogen hubs. Private investments, such as Linde’s $2 billion clean hydrogen facility, further bolster Alberta’s leadership in hydrogen development.
• Meanwhile, British Columbia is advancing hydrogen adoption with a $10 million provincial investment and support from the Canada Infrastructure Bank, which allocated $337 million to expand hydrogen refueling infrastructure in Western Canada. 

Canada’s federal government is potentially investing in hydrogen research and development through the Hydrogen Strategy for Canada. A proposed $1.5 billion investment is predicted to create up to 350,000 jobs by 2050.

Advantages of Hydrogen as an Energy Source

• High Energy Density: Hydrogen contains a high amount of energy per unit of weight, making it an efficient energy carrier. It can provide long-duration energy storage for intermittent alternative resources like solar and wind. 
• Versatility: Hydrogen can be used in a variety of sectors, including transportation (fuel cells), industry (for heat and chemical production), and electricity generation. This versatility makes hydrogen a key enabler of an efficient, resilient energy system.
• Decarbonization: When produced via green hydrogen, it can help reduce Canada’s carbon emissions. Hydrogen is also essential in decarbonizing sectors like heavy transport and industrial processes, where direct electrification is challenging.
• Energy Security: Energy security is one of hydrogen’s promising advantages, as it can be stored and transported efficiently. By allowing for the seasonal storage of energy, hydrogen helps balance supply and demand, particularly during periods of high energy consumption or low alternative energy production. This makes energy systems more resilient and less vulnerable to market fluctuations or external shocks.

Challenges of Hydrogen as an Energy Source

• Volatility and High Risk: Because hydrogen is relatively new as an upcoming alternative energy source, plans to expand hydrogen production have been challenging. Recent high-profile project cancellations in Europe highlight key risks associated with the hydrogen economy.
  • Energy companies like Uniper and Sasol cancelled a 200 MW hydrogen-based aviation fuel project due to slow market development, insufficient regulations and cost increases. These factors also contributed to the cancellation of other hydrogen-based projects in Europe such as, ArcelorMittal’s delayed plans for creating hydrogen-powered facilities and Equinor’s failed plans to export blue hydrogen to Germany.
  • These failed opportunities reveal the need for the hydrogen market to overcome logistical hurdles and limited viability to become a commonly used alternative energy resource. 
• High Production Costs: Green hydrogen is more efficient but also the most expensive type due to the cost of electricity and electrolysis technologies, with prices ranging from $3/kg-$8/kg for alternative energy sources, compared to $0.50/kg-$1.70/kg for hydrogen from natural gas. However, as energy costs decrease, green hydrogen’s economic viability is expected to improve.
• Infrastructure Requirements: The widespread adoption of hydrogen will require significant infrastructure investments, including production facilities, pipelines, and refueling stations.
  • To support this, the Canada Infrastructure Bank (CIB) has committed $500 million through its Charging and Hydrogen Refueling Infrastructure Initiative (CHRI). While this is a strong start, substantial long-term development is needed for hydrogen to become a viable energy source.
• Storage and Transportation: Hydrogen is difficult to store and transport due to its low energy density by volume and the fact that it requires high-pressure or cryogenic conditions. 
  • For instance, Japan’s Suiso Frontier, the world’s first liquid hydrogen carrier, faced malfunctions during testing due to cryogenic containment issues, highlighting the technical complexity of hydrogen transport. Developing efficient and safe storage methods is crucial for the hydrogen economy.

Key Takeaways

Hydrogen has the potential to play a pivotal role in Canada’s transition to an efficient energy future. With its abundance, versatility, and ability to transform multiple sectors, hydrogen can help Canada become a potential leader in the global energy market. However, there are significant challenges to overcome, including high production costs and infrastructure requirements. By investing in the development of both green and blue hydrogen, Canada can unlock the full potential of this innovative energy source.