The Coming Hydrogen Economy
Fuel cells powered by hydrogen are about to hit the market. In time, they'll let us kiss the sheikhs goodbye.
fortune.com
Hydrogen experts, though accustomed to thinking in decades instead of years or months, are already mulling that question, and their answer can be summed up as "yes." A major source of hydrogen is instantly available: natural gas, or methane. Already it is widely processed into hydrogen for manufacturing plastics, "hydrogenated" vegetable oil, and other products. Making hydrogen this way is not totally environmentally friendly--reforming methane generates carbon dioxide, the main culprit in global warming. But it's strategically friendly: Today 99.5% of the methane consumed in America is produced in the U.S. and Canada. What's more, companies such as Praxair of Danbury, Conn., and Air Products & Chemicals of Allentown, Pa., operate a limited but widely dispersed hydrogen infrastructure in the U.S., including pipelines, storage terminals, tanker trucks, and reformers.
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Short-term moves like those would pave the way to a future that excites giant oil companies and environmentalists alike--in which methane would begin to recede as a hydrogen feedstock while renewable sources, like solar and wind power, and biomass, would come to the fore. Before September's terrorist attacks such a shift was projected to happen around the middle of this century. Royal Dutch/Shell, one of the oil giants that is investing heavily in a hydrogen future, projects that by 2050 about half of the world's entire energy supply may well originate with renewables.
Around the industrialized world, the seeds of oil displacement are already visible. Next year, for instance, three major energy companies in Scandinavia plan to build a pilot plant to make hydrogen from wind power. While it's only a start, the implications are huge: Denmark, the world wind-power leader, already gets nearly 15% of its electricity from the wind. Use that electricity to produce hydrogen, and the Danes would have the energy equivalent of the euro: an energy currency that can be efficiently swapped for heat or locomotion, or turned back into electricity. And while electricity is hard to store in large quantities, hydrogen is easy. The Scandinavians plan to use it in fuel-cell-equipped buildings and vehicles--such as the hydrogen-powered buses that DaimlerChrysler expects to roll out in Europe next year.
The U.S. is rich with similar prospects. The windy Dakotas, if studded with twirling wind turbines, could become the Saudi Arabia of hydrogen. Spare megawatts from the 55 major dams along the Columbia River and its tributaries in the Pacific Northwest could be fed into electrolyzers, turning them into the equivalent of inexhaustible oil gushers. Hawaii could help too: Its volcanically abundant geothermal energy could be tapped to generate electricity for churning out hydrogen.
In a telling sign of how far renewable energy has matured since the Age of Aquarius, Home Depot recently started selling solar photovoltaic systems made by AstroPower of Newark, Del., at some of its California stores. Meanwhile, companies such as United Solar Systems in Troy, Mich., have rolled out nifty forms of solar roofing--including shingles that can double as little power plants. Solar cells are only one-tenth as expensive today, on a per-watt basis, as they were in the 1980s, and manufacturers are having trouble keeping up with demand. Worldwide, photovoltaic sales jumped 38% last year. (No high-tech bust there.)
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Thanks to advances such as the advent of monster 1.65-megawatt turbines, wind-power costs have dropped 90% since 1980. In some places, wind watts are now cheaper than those from oil- or gas-fired generators. Over the past decade wind power worldwide has grown, on average, 25% a year, faster than any other energy source, says the Worldwatch Institute, a Washington, D.C., think tank. (Only solar comes close, with a 20% annual growth rate.)
Europe's wind capacity could reach a staggering 60 billion watts by 2010, enough to serve 75 million people, according to the European Wind Energy Association. (By comparison, a large nuclear plant has a capacity of about one billion watts.) The U.S. lags behind Europe in developing wind power, but America's wind-generating capacity is ramping up fast--it's expected to increase by a whopping 60% this year, or 1.5 billion watts.
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Renewable energy, excluding hydropower, which currently dwarfs other renewables, provides only 2% of U.S. electricity today. But its potential is huge. The harnessable wind power in Midwestern and Western states alone could supply as much electricity during a 15-year period as all of Saudi Arabia's vast oil reserves if they were burned in power plants, according to a federal study.
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Despite its recent fiscal woes, DaimlerChrysler, like every other major automaker, is pouring hefty sums into the effort to launch the cars between 2003 and 2005. But they won't necessarily turn up in showrooms then. The first ones are expected to be marketed as "fleet" vehicles such as taxis. That's because corporate fleets can be gassed up at home bases and so can be rolled out before hydrogen is widely available at service stations. The fuel-cell car market probably won't surpass 5% of U.S. new-vehicle sales, now about 850,000 vehicles a year, until after 2008.
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Federal handouts for hydrogen might seem anathema to the oilman in the White House. Yet in Texas two years ago then-governor George W. Bush enacted a sweeping mandate that made Texas a leader in renewable energy. Its first phase requires the state's electric utilities to add 400 megawatts of renewable-energy generating capacity by 2003. The utilities opted for wind power; won over by its low cost, they have since doubled their renewable-energy commitment. Randall Swisher, executive director of the American Wind Energy Association, a trade group in Washington, D.C., calls the Texas program "the most effective renewable-energy policy in the country." More such mandates are sorely needed, adds Swisher, for many utilities and state power regulators still view wind power with a jaundiced eye.
Once the fuel-cell market begins to take off, its impact could snowball. Using hydrogen to combine such renewable energy sources with highly efficient fuel-cell cars could deliver a double whammy to oil's hegemony, says Amory Lovins, an influential energy expert at Rocky Mountain Institute in Snowmass, Colo. That's because the cars' fuel cells could be used both for transportation and, when parked, to generate electricity to feed into the grid. The dividends from such dual-use "Hypercars," he predicts, would probably make them less expensive to get around in than conventional gasoline-powered cars even when oil is still fairly plentiful and cheap, accelerating its displacement by hydrogen. Oil will still have a role in future years: "It will be good mainly for holding up the ground," he quips. |
