The use of hydrogen as an alternative fuel
Madrid, 24th May 2022
The unstoppable boom in renewable energies is generating new demands in the insurance sector, such as specific policies or loss adjusters specialising in claims of this nature.
A good example of this is green hydrogen, which Fernando Pérez García, Director of the Energy Specialty at RTS, talks about, analysing the important role that hydrogen will play in the future as an alternative fuel.
RTS International Loss Adjusters, as a member of IMIA (International Engineering Insurance Association), actively participates in the field of Engineering Insurance, being part of working teams focused on the analysis of risks related to the hydrogen industry.
Within the energy transition towards decarbonisation, whose purpose is to reduce carbon emissions, especially carbon dioxide (CO2) into the atmosphere, hydrogen is an alternative fuel with high energy content and a clean energy source, as it does not emit polluting gases.
It is one of the most abundant elements in nature and is an important energy carrier, despite being the simplest molecule (two protons and two electrons bound together by electrostatic forces).
It can be stored in a liquid or gaseous state and in the near future it will be possible to convert it into electrical energy by converting natural gas turbines into hydrogen.
The difficulty lies in the cost of obtaining it, as it is generated from other substances that contain it, such as water, coal and gas.
Hydrogen is classified into three categories according to its sustainable value: grey hydrogen, which is currently the most widely used, for example, in the chemical industry or in large refineries, as its generation still requires fossil fuels; blue or low-carbon hydrogen, which requires fossil fuels, emitting fewer pollutants; and green hydrogen, produced from renewable energies.
Although 96% of the world’s hydrogen production currently corresponds to grey hydrogen, the aim is to use environmentally friendly production methods, such as green hydrogen.
The ideal way to produce green hydrogen is to obtain it directly from water, through a process of electrolysis, which consists of the decomposition of water molecules (H2O) into oxygen (O2) and hydrogen (H2), for which a lot of electrical energy is needed.
The falling price of renewable energies will eventually make electrolysis-generated hydrogen the most sustainable energy alternative on the market.
The global capacity of electrolysers, needed to produce hydrogen from electricity, has doubled in the last five years. There are currently some 350 projects under development that could reach 54 GW by 2030.
In this regard, in April 2021, the Chinese chemical manufacturer Ningxia Baofend Energy Group launched the world’s largest green hydrogen production project, with an investment of 200 million euros, whose 150 MW alkaline electrolyser is powered by a 200 MW solar plant.
Another major project under development is the Hamburg-Moorburg project in Germany, which is scheduled to come on stream in 2025, based on green hydrogen from an electrolytic process using electricity generated from several photovoltaic and wind farms, with the hydrogen generated being used to supply a gas-fired power plant and an industrial area.
In the near future, it will be possible to use hydrogen in its gaseous state to power turbines that currently use natural gas to generate electricity, with appropriate adaptations. Tests have already been carried out even on aircraft turbines.
Hydrogen production would be more cost-effective if excess renewable energy that is not consumed, and therefore cannot be stored, could be used.
Thus, at times when renewable electricity production capacity exceeds demand, instead of shutting down these facilities, the electricity would be diverted to electrolyser parks, where hydrogen would be produced and stored and then converted back into electricity through the use of fuel cells or transported as an energy carrier to other locations such as industry.
A large-scale hydrogen-based storage system could make it possible to store surplus renewable energy for later use.
It is important to note that hydrogen, given its volatility and flammability and its odourless and colourless characteristics, represents a significant fire and explosion risk.
It is therefore necessary to carry out an adequate risk analysis – in activities related to the production, use, storage and transport of hydrogen – that considers, among others, the improvement of safety with redundant control systems, detection and control of leaks in pipes and flanges (hydrogen is up to four times more permeable than methane in polymer pipes used for the transport of natural gas and up to three times more in iron and steel pipes), adequate ventilation to avoid explosive atmospheres in the event of leaks (ATEX regulations), choice of materials and compartmentalisation of installations and adequate training of operators.
There is no doubt that the lowering of electricity costs for renewable energies and the increase in costs due to CO2 emissions from fossil fuels will increase the development of the green hydrogen industry in the future, which will require expert engineers specialised in this technology.
Fernando Pérez García is an Industrial Technical Engineer specialising in Electricity from the University of Zaragoza, and teaches on a Master’s Degree in Renewable Energies. He also has a specialisation course in Analytical and Financial Accounting and is accredited as an insurance expert by APCAS, INESE, UNESPA and FUEDI (ELAE).
His professional experience includes more than 25 years as an insurance loss adjuster specialising in adjusting and adjusting claims for industrial risks, technical branches and energy, especially in the renewable energy sector, having handled claims in this speciality in Asia, America and Europe. In the field of engineering, he has carried out numerous projects and technical management of industrial installations.