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Energy transition may mean higher consumer costs

Hydrogen combustion engines could be a bridge to wider adoption of the energy carrier before fuel cell technology ramps up, according to generation equipment company Aggreko.

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Costs for hydrogen-fueled power generation would come down, but customers would also have to accept higher costs as a feature of the energy transition, Carsten Reincke-Collon, the company's Director of Future Technologies, told S&P Global Platts in an interview Nov. 4.

Reincke-Collon put current delivered prices to a site at around Eur12.00/kg ($13.89/kg), equivalent to around Eur3-4/liter of diesel, and said halving the cost in 10 years would be achievable, although he noted that this would still be high compared with diesel.

"Of course, the cost should come down, but we will also have to ask the question if we are open to accept a bit of higher premium on decarbonized services in the future," Reincke-Collon said.

S&P Global Platts assessed monthly European hydrogen pump prices at Eur9.50/kg ($11.01/kg) in Germany Nov. 1.

"If energy cost is not your main concern, but rather it's the reliability of power, and maybe then we get the equipment cost down, then we're getting closer to it," he said. "But I don't think it's going to be really quick."

Converting remote power generators to run on hydrogen provides an easier way for the potential mass adoption of hydrogen as a fuel for power generation in areas such as event venues and construction sites, Reincke-Collon said.

"Combustion is closer to what we do today, if you think about what people in the business are dealing with day-to-day in terms of service, handling and installation," he said.

Converting existing applications and technology also means production is more easily scalable and entry costs lower.

"It's a mass-produced thing that you just have to adapt to a new fuel," Reincke-Collon said. "Mass production always means the entry costs are lower. They're roughly half the cost at least of a fuel cell of the same size."

In June, Aggreko undertook its first pilot project of a 50 kVA hydrogen combustion power generation unit at its depot in Moerdijk, Netherlands, which it developed with partner CMB.TECH.

The company is now investing in a further 10 units that will be ready for customer installations in Europe by the end of the year, Aggreko said.

CMB opened a 450 kg/day hydrogen fueling station in Antwerp at the start of June to fuel ships, tube trailers, cars, trucks and buses.

Aggreko sees an opportunity for integrating hydrogen and renewables into temporary power, requiring no capex commitment on the part of customers. These short-term contracts can help businesses take steps towards decarbonizing their energy needs, the company said.

Reincke-Collon said the company's commitment to achieve net-zero emissions across its own operations and reduce diesel fuel used in customer applications by 50% by 2030 had spurred it to prioritize the use of clean fuels.

"Fuel plays a big role in our services, as we often have to bring the energy to the site where the customer needs our services and solutions," he said. "We have been looking at alternative fuels for a long time, more so with the increased targets that we set ourselves for the energy transition."

Hydrogen infrastructure development is needed to move from demonstration projects to commercial scale, Reincke-Collon said, noting large natural gas-based hydrogen production projects with CCS would help scale the industry.

Reincke-Collon noted that the logistics and infrastructure for hydrogen are more challenging than for liquid fuels such as diesel. Methanol is a good contender as a green hydrogen carrier in the future, he added, as it is simpler than ammonia to handle and does not have the same issues of toxicity.

Hydrogen-fueled back-up and temporary power generation could be supplied by tube trailers in areas with ready production of the energy carrier, but the development of pipeline infrastructure would be needed to enable large-scale hydrogen power plants, Reincke-Collon said.

Aggreko is also developing 45 kVA hydrogen fuel cell and battery hybrid generators.

Reincke-Collon said the flexibility in load for a fuel cell is limited, and combining hydrogen fuel cells with batteries helps to optimize the load.

The company has partnered with Nedstack on the proton exchange membrane fuel cell and lithium-ion battery system, which will also be piloted in Moerdijk.

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