How “Green” are Hydrogen Fuel Cells?

Fuel cell engines that convert hydrogen into electric energy have seen a breakthrough in 2014. The future mix of hydrogen versus lithium ion battery fuel will severely impact the price and availability of platinum and palladium in the future.

Today, more than 50% of the world’s platinum and palladium are used in automotive catalysts, a market that will gradually decrease and – according to several independent studies – disappear almost completely by 2040. If no new markets are created then the two metals are likely to lose their appeal to investors. After our recent article “How ‘Green’ is Lithium?” it is time for a “well-to-wheel” comparison between lithium and hydrogen fuel cells.

It is important to consider that both technologies use electricity: battery electric vehicles (BEV) are plugged into the grid to recharge; hydrogen for fuel cell electric vehicles (FCEV) requires an electrolytic process for production. Electricity comes primarily from power plants and originates from either coal or nuclear fission. Neither process is very effective: coal power plants operate at rates below 50% efficiency, nuclear power plants at around 40%. Another 7-8% of that amount is lost in transit to consumer markets.

Of course, electricity produced locally via solar, geo-thermal or hydro power is different, but countries like the U.S. are in the single digit-percent range when it comes to the alternative energy sector. In fact, if the BEV market grew at a faster pace, then power grids would have a difficulty meeting the extra demand.

Hydrogen is not energy. Hydrogen is a fuel. It stores energy in a fuel cell, much like energy can be stored in a lithium ion battery. The advantage of hydrogen is, however, that it can be produced from many different sources without having to rely on remote supplies, allowing for incremental shifts towards sustainability of the entire system. Fuel cells are emission-free, the only “exhaust” being water.

As we learned in our interview with Viessmann a little while ago a natural gas powered fuel cell for the production of electricity in residential homes will increase the overall efficiency from less than 50% to 90%. This is a major game-changer: hydrogen used in residential homes will almost double the amount of usable energy from fossil fuels or nuclear power while reducing carbon dioxide emissions to almost zero. It is an important factor, but it isn’t ultimately “green”. And what does it mean for cars?

The answers can be found in a study published by the European Union as the result of a collaborative effort of car manufacturers, oil, gas and utility companies, manufacturers of equipment for sustainable energy production, governmental and non-governmental organizations. Based on legislation focused on CO2 reduction already in place, it forecasts that by the year 2050 more than 80% of all electricity used will come from renewable sources. The paper is somewhat less optimistic than Shell’s “New Lens Scenarios” we reported on last year – Shell predicted the year 2040 as the conversion point. This development, more than anything else, will have an impact on our environment.

As to cars, it is true that 90% of all trips made are within a range of 100-120km, for which a BEV will suffice. But, shifting the filter from “trips made” to “kilometers driven” the paper concludes that 50% of all kilometers driven are on long range trips outside the range of most BEVs. These trips are responsible for 75-80% of greenhouse gas emissions. The study goes on to conclude that FCEVs are more suitable for such trips: they are more similar in overall performance (range, size) to ICEs than BEVs, they are quicker to refuel, and they are more acceptable to a majority of consumers.

The bottom line: the question “BEV or FCEV” misses the point. Both types of cars will play significant roles in our lives by 2040. What matters is that hydrogen will be key to providing “green” power to residential homes, industry and transportation. Hydrogen can shorten our path to CO2 reduction because it can be used in decentralized ways, thereby taking load off of central power plants.

The future of hydrogen hinges upon renewable means of production in order to become the answer to our greenhouse gas problems. Because of its universal usability there are firm commitments not only by the European Union but also by other countries around the world to build a hydrogen infrastructure, so the chances for a hydrogen economy including hydrogen powered electric vehicles (FCEV) are very high.

With respect to precious metals, the answer is not so easy: platinum loadings on automotive fuel cells have come down considerably. They will continue to decrease (see graph) ,which in turn will reduce unit cost, and help market growth. By 2020, platinum loading per unit should be equal to automotive catalysts.

The residential market is an added benefit for precious metals that will be large, despite the fact that per unit loadings are lower in this application.

A threat, as always, remains in parallel developments trying to avoid the use of precious metals altogether. These developments are in infant stages but they exist.

It is crucial to monitor them with a view to market impact by the time the technology reaches maturity in consumer markets.

By Bodo Albrecht
tminsider@eniqma.com