Investors are hopeful that this time might actually be different for hydrogen stocks after years of hoopla and false promises.
Climate urgency
A sudden sense of climate urgency in boardrooms and government alike has spiked interest in emerging technologies that could help reach aggressive decarbonization goals.
That includes hydrogen, especially hydrogen produced with renewable energy to create truly carbon-free fuel.
This so-called green hydrogen could decarbonize industrial processes, and perhaps make marginal contributions to transportation and heating as well.
It all sounds so promising, but it’s important for investors to remain realistic.
Although this supply is also carbon-free, environmentalists are a sensitive bunch.
But if hydrogen ever lives up to its potential as a wonder fuel, then it may be thanks to nuclear power plants. Although this supply is also carbon-free, environmentalists are a sensitive bunch. Therefore, this is referred to as pink hydrogen. It could be just what ageing nuclear fleets need to remain economically relevant.
Pink Hydrogen, Explained
There are many ways to produce hydrogen. The most frequently mentioned procedure splits water molecules into hydrogen and oxygen using electricity. Green hydrogen is produced by an electrolysis process in which firms like Plug Power (PLUG) provide the electrolyzers and wind or solar farms provide the electricity.
Electrolysis can also be used to create pink hydrogen, but it requires electricity from nuclear power reactors. Due to low efficiency and bad economics, the production method would be slightly altered.
Quite a bit of energy is needed to drive the chemical processes required to make hydrogen. Nuclear power facilities can take advantage of waste energy from the heat they produce, but methods to produce green hydrogen must primarily rely on electricity (“cold electrolysis”). That gives pink hydrogen access to an entirely new economic world.
Nuclear power plants could manufacture zero-carbon hydrogen using four different processes, according to the World Nuclear Association:
- Cold electrolysis, which uses only electricity
- Low-temperature steam electrolysis (LTSE), which uses both electricity and heat
- High-temperature steam electrolysis (HTSE), which uses both electricity and heat
- High-temperature thermochemical production, which uses only heat
Processes that use heat benefit from higher efficiencies and potentially lower production costs, although they can be limited by materials science.
That’s because the membranes used in HTSE can be quickly degraded by high temperatures.
Similarly, existing nuclear reactors aren’t optimized for high-temperature thermochemical production, which would be the Holy Grail of low-cost hydrogen production.
Industry isn’t waiting idly in the meantime.
A single 1,000-megawatt reactor could produce nearly 500 metric tons of hydrogen per day.
For perspective, Plug Power has announced a goal of achieving the same level of production by 2025 but needs 13 green hydrogen production sites combined to reach that volume.
Growing Interest in Pink Hydrogen
The U.S. Department of Energy (DOE) supports the Hydrogen Shot program, which aims to develop the technologies required to produce clean hydrogen for $1 per kilogram.
The DOE has provided millions of dollars for pilot programs exploring HTSE processes, including in Arizona and Minnesota.
Xcel Energy (XEL) has been one beneficiary.
The electric and gas utility recently began a pilot project at its Prairie Island nuclear power plant.
Although work remains in the earliest stages of development, the utility is interested in extending the life of its atomic fleet, selling hydrogen to industrial customers, and possibly mixing hydrogen into its own natural gas network.
Don’t Sleep on Nuclear Power’s Role in the Hydrogen Economy
Green hydrogen tends to receive all the coverage and excitement, but pink hydrogen boasts several notable advantages.
Nuclear power plants can produce hydrogen at lower costs, higher volumes, and closer to end-users (industrial customers) than newer projects based on renewable energy.
If the nation’s atomic fleet gains commercial traction with first-generation processes such as HTSE, then it could provide incentives to develop next-generation nuclear reactors capable of operating at higher temperatures.
That would deliver safer nuclear energy, increase the nation’s supply of carbon-free electricity, and reduce or even eliminate nuclear wastes — all while having the added benefit to manufacture the lowest-cost hydrogen on the market through thermochemical processes.
There’s no guarantee the hydrogen economy will emerge on the timeline or scale expected by investors or politicians, but if and when it does, expect nuclear power to be a critical piece.
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Source: The Street
