The hydrogen option for energy: a strategic advantage for Quebec
Jacques Roy, Ph.D. Marie Demers, Ph.D. Full Professor Research Associate, CHUS Department of Logistics and Operations Management Université de Sherbrooke HEC Montréal
December 2019 Table of Contents
1. Executive summary...... 3 6. Flourishing external markets...... 29
2. Introduction...... 5 7. Profile of the situation in Quebec...... 39
7.1 Energy sources used in Quebec...... 39 3. Hydrogen: an energy vector...... 7 7.2 Energy dedicated to the transportation sector...... 40 3.1 A renewable and efficient energy source...... 7 7.3 Greenhouse gas emissions...... 40 3.2 Hydrogen and hydroelectricity: a winning combination...... 9 7.4 Advent of electric vehicles...... 41 3.3 Leverage for reducing GHG emissions and increasing energy efficiency....10 7.5 Incentives for running on clean energy...... 41 4. Different uses of hydrogen as an energy source...... 11 7.6 The current regulations to limit CO2 and dependence on hydrocarbons...... 43 4.1 Electric vehicles...... 11 8. Opportunity for the development of the hydrogen sector in Quebec...... 44 4.2 Hydrogen fuel cell buses...... 12 8.1 Hydrogen production...... 44 4.3 Freight transportation...... 13 8.2 The different market segments for conversion to hydrogen...... 46 4.4 Refuelling stations...... 15 8.3 New transportation infrastructure projects...... 49 4.5 Other possible applications in the transportation sector...... 17
4.6 Applications in industry...... 17 9. Conclusion, feasibility conditions and recommendations...... 51
4.7 Comparison of battery electric vehicles (BEV) 9.1 Conclusion...... 51 and fuel cell electric vehicles (FCEV)...... 18 9.2 Feasibility conditions and recommendations...... 51 5. Current and developing technologies...... 19 References...... 53 5.1 Hydrogen production...... 19 • Current production modes...... 19 Appendix 1: List of Hydrogène Québec coalition members...... 59 • Developing production modes...... 21
5.2 Hydrogen storage...... 23
5.3 Hydrogen distribution...... 25
5.4 Hydrogen for propulsion of vehicles...... 27
2 1. Executive summary
The energy transition to renewable, non-greenhouse As an energy vector that can be produced from many sources, hydrogen is currently the object of many research studies and multiple demonstration gas-emitting sources, has begun in several countries. projects, stimulated by industry, by governments and by organizations The development of solar, wind and hydroelectric directly dedicated to this resource around the world. But what is the situation in Quebec? energies is on the agenda, but their intermittent This document presents a status report on the use of hydrogen as an character causes difficulties adjusting supply and energy vector in the world, with emphasis on its different applications in the transportation sector as well as in industry. demand. The possibilities of transformation and It shows the advantages related to hydrogen and its role in fighting climate storage of surpluses in the form of hydrogen offer a change, because its use does not release any greenhouse gas emissions or any other by-product harmful to the environment. new avenue for reliance on clean energy. The most recent advances in hydrogen-related technologies are presented, whether for its production, storage and distribution or its role in propulsion of vehicles. The complementarity of electric battery-powered vehicles and hydrogen fuel cell vehicles is the focus of special attention. Four cases of countries or states that are forerunners of this conversion are then examined in more detail: California, China, Japan and Germany are already flourishing markets, whether for the deployment of hydrogen refuelling stations or the conversion of vehicles. Finally, to contribute to Quebec’s position on the question, a profile of the energy and transportation situation is drawn and government involvement in clean energy is documented. Quebec occupies an eminently favourable position in the integration of hydrogen into its energy system, due to its substantial hydroelectric resources and their losses. Some multinational companies have followed suit for production of hydrogen in Quebec for export.
3 Several measures are proposed here in the context of an approach of integrating hydrogen into transportation in Quebec. They address both the public sector and the private sector.
For the public sector: For the private sector:
• Rely on the action plans in force to extend reliance on clean • Collaborate with other stakeholders and the public sector to energy to hydrogen; help develop successful policies; • Adopt a hydrogen roadmap with objectives and targets; • Invest in hydrogen production for the purposes of use in Quebec and for export; • Encourage the hydrogen production initiatives from renewable energy sources such as hydroelectricity, particularly in remote • Adopt a phased conversion strategy: regions, and for export; – First convert forklifts in industry as the benefits • Stimulate R&D on hydrogen-related technologies; have already been demonstrated by private companies like Walmart and Canadian Tire; • Deploy incentives for the purchase of hydrogen vehicles, particularly those of captive fleets including taxis, delivery – Participate in the conversion of captive fleets of vehicles (taxis, vehicles, government fleets, emergency vehicles, and buses as delivery vehicles, government fleets, emergency vehicles and well as for heavy trucks; buses) as they can be refuelled at their main station or terminal; – Put the emphasis on heavy trucks, which are • Contribute, with the private sector, to funding the gradual large GHG generators, by converting those deployment of hydrogen refuelling stations; that return to their terminal every night; • Provide a regulatory framework to ensure safe use of – Integrate hydrogen into new transportation infrastructure hydrogen; and projects like tramways and passenger trains; and • Raise public awareness about hydrogen-related issues (safety, – Participate in the construction of a network costs, benefits for the environment). of hydrogen refuelling stations.
The costs related to the energy transition to hydrogen will be high. But it can be expected that substantial benefits will result from them, both for the companies involved and for the environment and Quebec society as a whole. With its renewable resources, Quebec is advantageously positioned to initiate and benefit from this transition. 4 2. Introduction
Fossil fuels account for 82% of the world’s energy The urgency of acting to counter the impact of climate change has made it necessary to study methods in various greenhouse gas-generating consumption (Hydrogen Council, 2017a) and are fields, such as transportation. The decarbonization of the transportation sector is now on the agenda to meet the desired targets. CO is the main largely responsible for the rise in greenhouse gas 2 source of emissions responsible for global warming, and the transportation emissions, which have aggravated the environmental sector was responsible for 23% of global CO2 emissions in 2014 (Horsin Molinaro and Multon, 2018). In addition to the deleterious impact of fossil and health effects of climate change. fuels on climate, environmental degradation and air pollution, in turn, have negative impacts on the population’s health.
FIGURE 1
CO2 emissions and contribution to global warming in 2014
In % Other sectors Fluorinated gases 4 4 5 7 including 100 6 4 7 N O PFC + HFC + SF6 2 9 11 tertiary 2 % 90 5 % 23 80 Residential 33 32 28 70 Transport 60 19 CH4 19 50 10 13 20 % 8 5 Industry and 40 6 construction CO2 30 73 % Energy sector 40 43 41 except electricity 20 36
10 Electricity production 0 World China USA EU-28
Source: Horsin Molinaro and Multon, 2018.
5 During the Paris Climate Conference (COP 21) in December 2015, 195 This study’s objective is to report on the use of hydrogen as an energy countries adopted an agreement that binds them to limit the polluting source, with special attention to the applications in the transportation field. emissions contributing to climate change. The Paris Climate Agreement, The study was sponsored by Hydrogène Québec, a coalition of companies signed in 2016, encourages the continuation of efforts to limit the rise in committed to raising awareness among the Quebec population about temperatures to 1.5 degrees Celsius; it also promotes low greenhouse gas hydrogen as a fuel solution to kickstart the energy transition1. The study emissions development and seeks the achievement of a carbon-free world will enhance the comparative advantages of hydrogen for the environment between 2050 and 2100. and the economy, particularly inspired by the recent experience observed in other countries. Special attention will be paid to the situation in Quebec, Energy efficiency measures, behavioural changes intended to reduce which benefits from a strategic advantage by having hydroelectric surpluses energy consumption, and carbon pricing tools, will not achieve the desired that can be used for clean and cheap hydrogen production. The study is objectives on their own. A major transformation of the energy system is based on a fairly exhaustive analysis of the recent literature on the subject necessary to achieve low carbon emissions (Potvin et al., 2017; World and on interviews with several stakeholders and industry experts. Energy Council, 2018). The transition to renewable and low-carbon energy sources has already begun, but the rhythm of implementation in the transportation sector is mixed.
Wishing to reduce greenhouse gas emissions drastically, a coalition of 89 European cities and regions (Fuel Cells and Hydrogen Joint Undertaking) adopted this strategy in 2017 and plans to carry out development projects of around 1.8 billion euros for the deployment of hydrogen fuel cell technologies over the next five years (Ruf et al., 2018).
Canada, and particularly Quebec, occupies a favourable position for low- carbon energy development, due to its hydroelectric and biomass resources, but also due to its fossil fuel operations, which could be equipped more systematically for carbon capture and storage. Experimental projects are also underway in several Canadian provinces.
1 See appendix 1 for the names of the coalition members. 6 3. Hydrogen: an energy vector
3.1 A renewable and efficient energy source Hydrogen is the simplest, smallest and lightest element of the periodic table FIGURE 2 and the most plentiful element in the universe. However, it is rarely found Specific energy of different fuels in its pure state but is almost always bonded to other elements (such as 160 oxygen to form water (H2O), for example), which necessitates the use of technical processes to separate them. Usually encountered in its gaseous 140 141.9 form, hydrogen liquefies at a very low temperature (-253° Celsius). Due H2: (MJ/kg) to its low density, it is usually put under pressure or liquified for storage 120 33,3 kWh/kg and transport. Its liquefaction increases its density 800 times (Shell, 2017). 100
Endowed with greater energy potential than gasoline and other fuels (Jain, 80 2009; Sinigaglia, 2017; Tarascon, 2011), hydrogen can be produced 60 from many energy sources, such as biomass, wind, solar, hydroelectric 55.55 or nuclear energy, and decarbonized fossil fuels; this versatility confers 40 50.39 47. 2 7 47. 21 an undeniable advantage. Odourless, colourless and non-toxic, this gas, 20 30.0 which does not generate any carbon emissions from its combustion, is considered by some to be the most promising energy carrier for the future, 0 (MJ/kg) density Energy especially since it is inexhaustible. Hydrogen Methane Ethanol Propane Diesel Natural Gas
Among hydrogen’s other advantages, we should mention that it is easily Source: Tarascon, 2011. storable and that its possible uses are multiple (Terlouw et al., 2019; IRENA, 2018). In particular, it can be used for industrial heating, transportation, and fuel for industrial handling equipment such as forklifts, etc.
Hydrogen is omnipresent in fossil energy sources in the form of carbon- hydrogen compounds (hydrocarbons). The more hydrogen atoms the source contains relative to the number of carbon atoms (as in methane
CH4, the principal compound of natural gas), the lower the quantity of
CO2 produced during combustion and consequently, the atmospheric GHG emissions will be lower; in the case of petroleum and diesel gas, the proportion of hydrogen atoms is smaller, which will result in more GHG during combustion (Shell, 2017). 7 Hydrogen also offers an interesting flexible solution for the intermittent FIGURE 3 character inherent in renewable energy sources, such as wind and Production and utilization of hydrogen photovoltaic power (Brandon and Kurban, 2017), because it can be easily stored for subsequent use. SUPPLY Hydrogen’s long-term storage capacities are superior to those of other sources, which is an advantage when energy demand varies over time (for example, when the demand is greater in winter than in summer).
Hydrogen transported by pipeline over long distances is subject to smaller energy losses during transport, contrary to electricity, which makes it an H2 attractive option in economic terms (Hydrogen Council, 2017a).
DEMAND
Source: Horner Automation Group, website 2019.
FIGURE 4 Various technologies for electricity storage 1 year Methane
1 month Hydrogen Water 1 day pumping Redox flow CAES
NAS 1 hour
Lithium-ion battery Flywheel
Storage Period Storage Scale 1 kWh 1 MWh 1 GWh 1 TWh
Source: Iida and Sakata, 2019 8 3.2 Hydrogen and hydroelectricity: a winning combination
Currently, most of the hydrogen produced in the world (70%) comes from Hydrogen production from clean renewable hydroelectric resources like natural gas through a steam methane reforming process (Shell, 2017), those available in Quebec can also optimize the use of surplus production which produces GHG emissions. Hydrogen produced by electrolysis from of clean electricity by offering the possibility of storing the surpluses in renewable energy sources, such as hydroelectricity, generates little or no low consumption periods to make them available in peak periods and to GHG. But the electrolysis of water to produce hydrogen requires a lot of export them (Hydrogen Council, 2017a; Toyota, 2016), particularly to the electricity, which Quebec has available at a reasonable price. The use of United States, where hydrogen is generally and primarily produced from hydroelectric facilities to produce hydrogen will therefore contribute to the natural gas at the present time (Leblanc, 2018). If the electricity production reduction of the negative effects of GHG on climate. generated by the hydroelectric facilities exceeds the demand, this results in major losses. Hydrogen production can avoid these losses. Hydrogen FIGURE 5 and electricity are seen as complementary energy vectors: hydrogen can be converted into electricity and vice versa (IEA 2017). CO2 emissions depending on the energy source for vehicles 300 Hydrogen can also be produced by small hydroelectric facilities located in remote regions by taking advantage of energy surplus periods, which Upstream (fuel production pathway emissions) 250 Exhaust (vehicle emissions) can avoid transporting hydrogen over long distances (Yumurtaci and Bilgen, 2004). 200
150 FIGURE 6 e/km) 2 Hydrogen: from production to use 100 Primary Production Storage Transport Utilization 50 energy methods
0 Emissions (g CO Coal Gasification Baseline Baseline 33 % 50 % 100 % 0 % 33 % 100 % 2017 hybrid renewable renewable renewable renewable renewable renewable Biomass Gasification Gasoline Electrolysis hydrogen Natural gas reformed hydrogen
Source: Isenstadt and Lutsey, 2017. Stream reform Bio-gas methods Liquification (SRM) Pipeline Storage Natural gas Stream LH2 Compression reforming CH2 In Switzerland, the deployment of a plant for hydrogen Hybrides Photovoltaic Truck production by electrolysis at the Aarau hydroelectric facility Hybride Refuelling will make it possible to supply the annual fuel consumption Wind power Electrolysis of 170 hydrogen fuel cell vehicles. Transport Hydropower sector (Frangoul, 2017) Source: Sinigaglia et al, 2017. 9 3.3 Leverage for reducing GHG emissions and FIGURE 8 Annual CO emissions could be reduced by 6 Gt in 2050 increasing energy efficiency 2 1 Power generation, Fuel cell electric vehicles present one of the best alternatives in terms of 0.4 buffering clean technology. When generated from renewable energy sources (wind, 4 Cars 1.7 solar or hydroelectric energy), the hydrogen used to supply fuel cell vehicles Transportation 3.2 does not produce any greenhouse gas emissions. Even when the hydrogen Trucks supplying them is produced from natural gas without carbon capture, 5 0.8 Industry energy 1.2 fuel cell vehicles generate up to 30% fewer emissions than conventional Buses 0.2 vehicles (Hydrogen Council 2017b). 6 Building heating and power 0.6 Other1 0.4 The Hydrogen Council (2017b) forecasts that the CO2 emissions attributable to the transportation sector could be reduced by 3.2 Gt by 2050 if Industry feedstock 0.7 Total 3.2 appropriate measures were put forward to promote the transition to fuel 1 Aviation, shipping, rail, material handling cell vehicles. Total 6.0 SOURCE: Hydrogen Council
Source: Hydrogen Council, 2017b. FIGURE 7 Well-to-wheels greenhouse gas emissions for 2035 mid-size car Low, Medium & High GHGs/mile for 2035 Technology, Except Where Indicated
2012 Gasoline 430 Gasoline 220 Diesel 210 Natural Gas 200 Conventional Internal Combustion Engine Vehicles Corn Ethanol (E85) 170 Cellulosic E85 66 Cellulosic Gasoline 76 Gasoline 170 Cellulosic E85 50 Hybrid Electric Vehicles Cellulosic Gasoline 58 Gasoline U.S./Regional Grid 170 Gasoline Renewable Electricity 150 Plug-In Hybrid Electric Vehicles Cellulosic E85 Renewable Electricity 45 Cellulosic Gasoline U.S./Regional Grid 76 (10-mile [16-km] Charge-Depleting Range) Cellulosic Gasoline Renewable Electricity 52 Gasoline U.S./Regional Grid 180 Gasoline Renewable Electricity 110 Extended-Range Electric Vehicles Cellulosic E85 Renewable Electricity 34 (40-mile [64-km] Charge-Depleting Range) Cellulosic Gasoline U.S./Regional Grid 120 Cellulosic Gasoline Renewable Electricity 39 BEV100 Grid Mix (U.S./Regional) 160 BEV100 Renewable Electricity Battery Electric Vehicles BEV300 Grid Mix (U.S./Regional) 165 (100-mile [160-km] and 300-mile [480-km]) BEV300 Renewable Electricity Distributed Natural Gas 190 Natural Gas (Central) w/Sequestration 110 Coal Gasification (Central) w/Sequestration 100 Fuel Cell Electric Vehicles Biomass Gasification (Central) 73 Wind Electricity (Central) 36 Grams CO2e per mile 0 50 100 150 200 250 300 350 400 450 10 Source: Manley, 2014. 4. Different uses of hydrogen as an energy source
4.1 Electric vehicles Hydrogen fuel cell vehicles can play an important role in the reduction of The fuel cell converts hydrogen into electricity, which will serve to propel greenhouse gas emissions because they do not produce emissions during the vehicle. The fuel cell operates continuously in the presence of hydrogen combustion, contrary to conventional gasoline or diesel vehicles. The and oxygen. deployment of these vehicles works in synergy with that of battery electric vehicles, because both types have different advantages and disadvantages and can prove complementary.
FIGURE 9 Hydrogen technology is ready to be deployed Mass market Start of commercialization acceptability1 Today 2020 2025 2030 2035 2040 2045 Forklifts 4 Medium/large cars Transportation City buses Vans Minibuses 1 Defined as representing more than 1% Coaches of sales in a given market. Trucks Small cars5 Synfuel for freight ships 2 The market share represents the volume Trams, railways and airplanes of production using hydrogen and Passenger ships carbon to replace the raw material.
2 Refining Production of methanol, olefins et and BT using H2 and carbon 3 Using hydrogen to produce steel in low Industry Ammonia, Steel3 carbon intensive processes. feedstock methanol 4 Decarbonization of feedstock 4 The market share represents the volume 6 Building of raw material produced using low heating Hydrogen injection in natural gas networks and power carbon intensive sources. 5 Industry Medium/low industry heat 5 In France, the deployment date has energy High-grade industry heat been adjusted with respect to the 1 Power global roadmap and upscaling. generation, buffering Source: Hydrogen Council, 2017b. Today 2020 2025 2030 2035 2040 2045 11 One of the first attempts to use hydrogen as a fuel in Canada occurred ZEFER, a European initiative for the deployment of hydrogen fuel cell during the Vancouver Olympic Games in 2010, when 20 buses were vehicles, in progress in three cities (Paris, London and Brussels), is currently supplied with hydrogen produced in Quebec from hydroelectric energy and testing this technology to demonstrate this option’s viability for captive transported by truck to the Whistler refuelling station (Natural Resources vehicle fleets, such as taxis, a car rental service and police cars (Green Canada, 2019). This pilot project ended in 2014. Car Congress, 2018).
Since then, several manufacturers have been involved in production of After Japan and California, Toyota is now testing its Mirai car in Quebec hydrogen fuel cell vehicles: among the leaders are Toyota with the Mirai with a demonstration fleet of 50 hydrogen fuel cell vehicles purchased model, Hyundai with the Nexo model, and Honda with the Clarity model. by the Quebec government using renewable hydrogen produced on site Depending on the model, the vehicle’s autonomy reaches between 500 with water electrolysis. and 600 km (Vorano, 2019). Automobiles account for most of the hydrogen Fuel cell technology currently would be particularly appropriate for highly fuel cell vehicles currently deployed on the road (IEA, 2019). used captive vehicle fleets, such as taxis, car rental services, delivery According to the International Energy Agency (2019), there were 11,200 services, police cars and buses, which could benefit from refuelling on automobiles and light trucks running on hydrogen fuel cells on the road their own site or at transit stations, in the case of buses. worldwide at the end of 2018. These vehicles are primarily located in the United States (California), with approximately half of the vehicles, followed by Japan with one quarter and Europe with 11%, mainly in Germany and France.
FIGURE 10 FIGURE 11 Diversification of electrified vehicle products Fuel cell electric technology explained
Fuel cell vehicle (hydrogen)