My first encounter with hydrogen was when in 2017, me and my team prepared an offer to the government of Russia to build a multimegawatt wind farm backed by a seasonal hydrogen storage in the Taman peninsula. The region suffered from electricity shortages in the summers when air-conditioning and industry demand peaked. Even then, the total cost of the project, expressed in CAPEX per MWh was lower, than for equivalent gas-fired CHP. Sure enough, the Ministry of Energy went with the CHP, costing almost twice our wind plus hydrogen.   IEA projects that power generation will be the main source of demand for hydrogen by 2030 and will only be overtaken by demand from aviation and marine fuel by 2050. With my recent client and a team of hydrogen experts, working in this industry for the last 15 years, we have explored the opportunities for hydrogen applications in the power industry, which I’d like to share here. Mind you, these are my conclusions, that do not necessarily match with those of my team or my client.   How do you generate power using hydrogen? First, you can generate power via fuel cells. The capacity of fuel cells is currently limited, with the average being 100 kW. This makes them problematic to use in large-scale grid applications. Second, you can mix hydrogen with natural gas, or mix coal or gas with ammonia, burn them, and generate electricity on the gas turbines. This seems to be the preferred way to generate electricity with hydrogen on a multimegawatt scale. Technologies to do that are still being developed and tested, but it is fair to say that by the end of this decade, all major gas turbine manufacturers will have a couple of hydrogen-ready turbines in their sales catalogs. Source: IEA, 2023   What mystifies me, is why you need hydrogen-based power generation in the first place. To mix hydrogen with natural gas or ammonia with coal, you first must make “green” hydrogen. And how do you make it? Right, via electrolysis with electricity generated from hydro, wind, or sun. So, to make electricity with hydrogen you first have to 1) make electricity from sun/wind/hydro; 2) use electrolysis to make hydrogen; 3) store and transport hydrogen; 4) burn hydrogen with fossil fuels; 5) capture any leftover GHGs.   Just to drive it home: you build enormous infrastructure to make, store and transport hydrogen. You spend time and money to design and build special turbines, capable of running on pure hydrogen or hydrogen mix. You build systems to capture and store GHG emissions. And when you fire up that hydrogen power plant, you lose up to 82% of energy [1]  in the process. For what? To make some clean kWh? Really? Well, go back to step 1, and there you have it!   According to the “Hydrogen ladder” by M. Liebreich, generating power with non-stored hydrogen is ultimately uncompetitive. What a surprise! Now hydrogen can have different uses in the power sector, not only directly burning it in the power plant.  Short-duration grid balancing has slightly better chances of becoming adopted, but there we have lots of alternative solutions in the form of lithium-ion or redux-flow batteries or other battery chemistries like zinc-air or tried and tested hydro storage.   Best-case scenario, according to the “Hydrogen Ladder” – is using hydrogen for long-duration storage of excess renewable energy and subsequent power generation. The IEA in their recent “Renewables 2023” report show, that from 2023 to 2028 there will be about 4 terawatts of renewable generation capacity added worldwide (depending on the scenario). By 2030 renewables will account for half of all electricity generated. That would certainly mean that in some cases there will be an oversupply of clean energy, that could be stored in hydrogen and used when there is a shortage of energy.     Source: https://www.linkedin.com/pulse/hydrogen-ladder-version-50-michael-liebreich/ Changes made - red underlines by me.   This brings me back to my Taman project, and investment decisions in cleantech in general. Hydrogen in power generation is overcomplicated, and overcomplicated projects carry much higher execution risk than simpler projects. Try building a wind farm. You will have enough risk management work on your hands, so you would not want the additional headache of building the hydrogen chain up to and including a power station.   In this energy transition, we must make smart choices on how to spend time and money in a way to make the most impact in the shortest time possible. The path to the decarbonization of the power sector has been clear now for several years – deploy more renewables, as fast as possible. Where battery storage will be needed, lithium-ion or redox-flow batteries will take of it most of the time. Simple and efficient. Hydrogen will have better uses elsewhere. [1]   https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/hydrogen-technology-faces-efficiency-disadvantage-in-power-storage-race-65162028

This book took me a while to get through. I’ve made two attempts, after failing the first time. Well, it was worth the effort. Before taking up the book I’ve encountered multiple references for the works of Professor Vaclav Smil, from journalists to Bill Gates (in his book, not in person). The title of the book drew me as it hinted that it would be more of a history book, rather than a book about physics or economics. There is nothing wrong with the former two, it is just that history I enjoy a little more.   When I was done reading, I realized that the book was about energy transitions. Although Prof. Smil has written a separate book dedicated to energy transitions, I’ve found myself thinking a lot about how he describes the advances of civilization through the process of discovery and improvement in technology of harvesting different sources of energy. The book slowly and meticulously describes how humanity went from one source of energy to another, all the time working to get more useful energy from the resources available.   Prof. Smil shows how energy could be used to measure almost everything that we do and debunks a lot of common myths on the way.  He starts by examining how our bodies produce and use energy. “ A slowly running 70 kg man will produce 800 W; the power of an accomplished marathoner running the race (32.195 km) in 2.5 hours will average about 1,300 W “. This is a reasonable starting point, given that during much of human history, we relied mostly on our muscles and animal muscles to move things around.   The shift from foraging and hunting to agriculture can be thought of as energy transition zero. This is when humans started to use more energy-rich crops. “Compared to foraging, early farming usually required higher human energy inputs—but it could support higher population densities and provide a more reliable food supply.” This enabled us to settle and feed many more people, than simple hunting and foraging ever would: “a single mill would have produced enough flour in a 10-hour shift to feed 2,500–3,000 people, a fair-sized medieval town.”   Energy surplus gave rise to the first civilizations such as Sumerian and Egyptian civilizations – they could use excess energy from agriculture to get more people to build pyramids, zikkurats, invent writing, and first muscle-powered machines. Still, during our agricultural period, we could only get better power output by using water as a prime mover (like for watermills) and wind, for windmills and sailing.    I used to think that using the energy of coal and oil was the first time in human history that humanity has severely damaged the environment to satisfy its energy needs. Smil debunked this myth, by showing just how severe the impact on the environment of using the oldest fossil fuel – wood: “The harvesting of wood for fuel (as well as for construction and shipbuilding) led to widespread deforestation, and the cumulative effect reached worrisome levels in previously heavily wooded regions. At the beginning of the eighteenth century about 85% of Massachusetts was covered by forests, but by 1870 only about 30% of the state was covered by trees”.                                                                                                                     To us, it is clear now that such deforestation could not be sustainable, and a change in the primary energy source was in order. Around the same time, coal started to get some sizable share in the total energy production. The first coal-fired steam engines appeared as early as the 18th century, but only by the end of the 19th century, they became efficient enough to be widespread. Still, an average steam engine in the year 1900 wasted about 92% of coal.     It is widely believed that much of the 19th century was dominated by coal, and much of the 20th century was dominated by oil. Smil points out that both impressions are far from reality. In fact, in the 19th century, wood was at its peak as the primary energy source. And wood was still used in significant amounts up to the middle of the 20th century, as in China. In Russia, for example, wood was used to provide more than 20% of all primary energy in 1913.   Coal overtook wood in the first half of the 20th century as the primary energy source, and only recently made way for oil. It took coal two centuries to become dominant, and it took oil just one century to do the same (see picture)   Source: Smil, Energy and Civilization   We are just getting over our oil phase, aren’t yet done with gas, and have ditched nuclear.  As Smil notes “Established sources and prime movers can be surprisingly persistent, and new supplies or techniques may become dominant only after long periods of gradual diffusion. A combination of functionality, accessibility, and cost explains most of this inertia.” As for nuclear, he calls it “successful failure”.   We are now in the middle of the next energy transition – a transition away from fossil fuels and to renewable energy. Use of fossil fuels created “the most worrisome challenge … the widespread environmental degradation.” As I’ve mentioned earlier, this is not the first time in history that we are facing environmental problems due to the way we get energy. This time, however, we are experiencing negative effects on a much larger scale. This is the primary driving force behind the current energy transition, and this sets it apart from the previous ones. All previous energy transitions lead to more energy being produced and consumed. This one is focused on using less and cleaner energy.   Now, using less energy to achieve the same or even greater results is a hallmark of ingenuity and efficiency: “…forced to compete globally, multinational companies strive to lower the energy intensity of their production, diffusing new techniques and fostering higher energy conversion efficiencies worldwide” . This quest for energy efficiency, along with a push for the decarbonization of energy will characterize the current energy transition.   The key question is when will this transition happen? Will it happen fast enough to stop the climate from deteriorating beyond any hope of recovery? Professor Smil is not optimistic about timelines. Energy transitions, defined as the time needed for a new energy source to take a large share in total supplied energy usually take two or three generations, or anywhere from 50 to 75 years. Smil thinks that only two technologies are capable of accelerating this energy transition – the swift scaling of nuclear power, and the availability of inexpensive energy storage, to store energy from solar and wind.   What about other multitude of sources and technologies? Hydrogen, nuclear fusion, wave energy, etc.? Professor Smil doesn’t go into details here, as this book is about history, not about the future. However, he urges us to “merely note the coexistence of two contradictory expectations concerning the energy basis of modern society: chronic conservatism (lack of imagination?) regarding the power of technical innovation, set against repeatedly exaggerated claims made on behalf of new energy sources.”   I have chosen to focus on energy transition in this review as it resonated with my work. However, the book is much more than that.  It is a book about physics, history, and innovation. And surprisingly, it is also about why energy is not central to our civilization.  Professor Smil refuses to fully equate energy use with civilization advances: “Very similar per capita energy use (for example, that of Russia and New Zealand) can produce fundamentally different outcomes, while highly disparate energy consumption rates have resulted in surprisingly similar levels of physical quality of life: South Korea and Israel have nearly identical human development index while the Korean per capita energy use is about 80% higher”.   It is refreshing to see towards the end of this book as Smil turns around and points, that it is possible to use watts to measure almost everything we do but not all. And what we cannot measure this way, may be the most important. The effect of culture, music, art, and literature cannot be explained in Watts: “No energetic considerations can explain the presence of Gluck, Haydn, and Mozart in the same room in Joseph II’s Vienna of the 1780s”. It also cannot explain sudden changes in societies: “An indisputable fact is that many instances of sociopolitical collapse came about without any persuasive evidence of weakened energy bases.”   Professor Smil wrote 47 books on energy and environment. I’ve read just one, but it got me hooked. I recommend it even if you are not working in the energy industry or it is not your field of study. At the very least you will have a massive collection of interesting facts that will liven up any cocktail party.  And at the most – it will give you the tools and motivation to carry on whatever it is that you are doing in the energy field.

Let's delve into a topic that's gaining traction in the energy sector: the burgeoning role of hydrogen. It's akin to a modern-day gold rush, with projections of over $320B in investments by 2030. The anticipated leap in clean hydrogen production from less than 1 million tons today to around 70 million tons annually signifies an astounding CAGR of over 100% for green hydrogen in the next six years.   Green Hydrogen's Role in Decarbonization   Green hydrogen is widely regarded as a key solution for sectors traditionally challenging to decarbonize, such as chemicals and steel manufacturing. Currently, these industries consume over 90 million tons of hydrogen annually, predominantly produced from fossil fuels, contributing significantly to global emissions.   The Steel Industry's Hydrogen Demand   Steel production is a major player here, but it currently uses less than 10% of the world's hydrogen. Traditional methods of steel and iron manufacturing involve heating iron ore with coking coal. Every ton of steel generates 1,5-3 tons of CO2, which contributes to about 6% of global greenhouse gas emissions. Enter the alternative: electric arc furnaces running on hydrogen, cutting out the need for fossil fuels.   Analyzing the Numbers   According to estimates by the IEA and AFRY, decarbonizing steel production with hydrogen would require about 97.5 million tons of hydrogen per year. This translates to a need for approximately 1.4 TW of renewable energy capacity. With the current pace of renewable energy capacity addition (around 350 GW in 2022), we'd need four years to get there. But let's be real, most of the next five-six years renewable capacity additions will not go towards making green steel.   Economic and Regulatory Challenges   Right now, the steel industry isn't exactly jumping on the green hydrogen bandwagon. Why? Cost and lack of regulatory push. Green hydrogen is pricey compared to the grey stuff and using it now would hike steel prices by a whopping 50%.     At COP28 in Dubai last December, steel execs were pretty clear: they'd switch to green hydrogen if there was a carbon price on their products. The European Carbon Border Adjustment Mechanism (CBAM) is a step in that direction, but will it be enough to drive widespread adoption of green hydrogen in steel? I'm not so sure.   The Alternative: Carbon Capture and Storage (CCS)   A more elegant and less expensive solution would be to outfit existing smelting plants with carbon capture and storage technology. This would require far less investment but will lead to the same results. According to IEA estimates , the cost of carbon capture and storage in the steel industry varies in the range of $40-100 per ton. This looks like a good much for an expected CBAM CO2 price of $80-120/ton.   Looking at this from a Greentech investor or startup perspective, I'd be eyeing CCS startups and projects, not hydrogen. Sure, about 40 projects are planning to use green hydrogen, but only 6 with CCS (according to the Green Steel Tracker ). My money's on CCS for the long haul.     Inviting Your Insights   I'm curious to hear your perspectives. Do you believe hydrogen is the future for steel decarbonization, or does CCS offer a more viable path? Let's discuss the implications for our environment and the economic landscape.   #GreenHydrogen #CCSTechnology #SteelIndustry #SustainableInvesting #COP28 #EnvironmentalImpact

Today I’m gonna tell about a developing case from my current practice on building a so-called «platform» in electric vehicle manufacturing. The success of many modern businesses, such as Google, iOS, AirB&B, is associated with the creation of "platforms" - technologies that allow a wide range of developers quickly and easily build a final product on it. This is easily done in the IT sector - you create a convenient platform once and then it starts working for itself. For example, Apple does not have to make any extra effort to allow one more programmer to develop another application on the iOS platform. Each next user of the platform is essentially a pure margin for your business. Not surprisingly, many seek to apply the "platform" model to their industry. Here's the idea - make an electric car "platform" and sell it to anyone who wants to make their own electric car. The platform will consist of a chassis, a battery, and an electric motor. The buyer of the platform invents his own electric car on its basis: individual body design, interior according to his budget, and, «voila!», the new electric car is ready for the end-user! Today you can order an individual electric car made for you. Its “platform” will most likely be Tesla Model 3 or Model S. However, Tesla itself does not sell «platform», it sells electric cars. Different companies at different times have tried and are trying to create an electric transport platform - Trexa, Nio, Arrival, and even the Russian military manufacturer «Almaz-Antey». But so far no one has succeeded. I recently came across a similar EV platform project and we had a dispute: what should be the business model? Should we make a full line of electric vehicles or should we focus on the platform? After some debate, it seems that first, you need to answer one most important question - is there anyone who wants to buy a platform, and not a ready-made electric car? A finished electric car may have many buyers, while a platform is likely to have a limited number of buyers. Large automakers have their own developments, and would rather buy not a platform, but its developer, and not for the sake of technology, but to fight off competition. Perhaps the platform would be bought by niche electric vehicle manufacturers, but are there many of them out there? Will they be able to generate enough demand to make the production of the platform pay off? Judging by the fact that no announced platform has yet become commercially successful, there is not enough demand yet. But perhaps the market has not yet been offered a reliable and inexpensive platform. Creating such a platform for electric vehicles involves designing a completely new way of manufacturing a car, one that does not require large investments in the construction of huge factories and where manufacturing steps are streamlined. The real question is then whether the necessary technologies for the production of electric vehicle components have matured enough. From what we see, such technologies already exist, and it is possible to combine them into a new production chain to create just such a reliable and inexpensive platform.