The Hydrogen Economy:After Oil, Clean Energy From a Fuel-Cell-Driven Global Hydrogen Web

Amory Lovins co-founded the Rocky Mountain Institute in 1982 and is known as one of the premier energy experts worldwide. RMI developed the Hypercar, a model for today’s hybrids and fuel cell cars. He wrote Natural Capitalism with Paul Hawkin.

Lovins: The DOE’s FreedomCAR program with the Big Three automakers is still a blank slate; it could go either way. It could be a flop if they simply drop fuel cells into inefficient cars. It could be a triumphant leapfrog for national competitiveness if they build on the best of what’s already been worked out. In 2000 Hypercar designed the vehicle FreedomCar wants to spend the next 10-20 years designing.

The cars have to be ready for the hydrogen, meaning that they’re made so efficient they need only a third the normal amount of power. Therefore, the fuel cell is small enough to be affordable even at early prices and the compressed hydrogen tanks are small enought to fit conveniently. That’s what Hypercar vehicles do. Those kinds of cars are making steady progress toward markets but I would like it to happen faster. They have been delayed by a combination of the collapsing private equity market over the past two years and the usual cultural problems in very large automaking organizations.

E Magazine: Aren’t most fuel cell cars on the road today using pre-existing chassis and platforms with fuel cells stuffed into them?

Lovins: It’s a bad design because it makes the fuel cell too big to afford and the tanks too big to package. If you stuff them in, you compromise interior space or performance, and you pay extra costs. Or you’re driven to converting fossil fuels through an expensive, bulky on-board chemical reformer. Most oil and car companies have noticeably cooled on their enthusiasm for non-board reformers. By the time you’re done, your gasoline-to-wheels efficiency is comparable to that of a good combustion engine.

E: Do you think the hydrogen economy is becoming more inevitable?

Lovins: There are several new important discoveries. One, from work by C.E. “Sandy” Thomas, president of H2Gen, is that the capital costs of a national hydrogen fueling infrastructure based on miniature natural gas reformers will be less than that of sustaining the existing gasoline fueling structure. That was quite a revelation to many people who assumed hydrogen would be too expensive.

Second, General Motors believes such as strategy would actually reduce national consumption of natural gas. That’s because the extra gas that you turn into hydrogen to run vehicles can be offset, or more, by the gas you save in power plants, furnaces and boilers by integrating deployment of fuel cells in vehicles and buildings.

E: Jeremy Rifkin believes the end game is locally generated networks producing hydrogen from renewables.

Lovins: I think that’s a plausible scenario. In brief, the hydrogen transition strategy we set out starts by making hydrogen mainly from natural gas in buildings. Then we sell surplus hydrogen from buildings to cars parked nearby. We then put the miniature gas reformers and electrolizers, as they get cheaper with volume, out into filling stations and elsewhere. That helps create a large hydrogen market, which would make practical and possibly cheaper the centralized production of hydrogen from either planet-safe electricity or reformed natural gas with carbon sequestration or possibly other methods.

E: What is the oil company strategy for hydrogen?

Lovins: They’re realizing they can be better off in the hydrogen business than in the oil business. This is very interesting for them and it changes the politics. All the major oil companies I work with have put substantial efforts in this direction. It’s been obvious for a long time that hydrogen is a good play for the natural gas industry.

Another revolution hasn’t happened yet but it shows promise. That’s the work at the Princeton Climate Mitigation Center making a plausible prima-facie case that it may be cheaper in the long run to make hydrogen our of coal than out of natural gas, with carbon sequestration in both cases. There’s less hydrogen in coal than in natural gas, and it’s harder to get at, but the coal is so much cheaper that it may compensate – if sequestration works as well as is hoped.

Another potential revolutionary notion is that hydrogen can greatly improve the economics of renewable electricity. A fuel cell is several times as efficient as a gasoline engine in converting fuel energy into traction in a vehicle. Instead of selling electrons as a raw commodity, you make it into a value-added product by attaching a proton to each electron at the wind farm or hydro-dam or solar cell. The extra price it fetches more than pays for that conversion and you end up making more money than you did selling electricity.

E: The Bush Administration’s hydrogen plans include using it to jump-start the moribund nuclear industry.

Lovins: That’s to be expected from an administration that’s enthusiastic about nuclear power. It doesn’t change the economic unattractiveness of building more nuclear plants. No investors showed up at the American Nuclear Society’s conference this year and there are good reasons for that. There are at least three technologies abundantly available that beat nuclear plants by a factor of at least three to five in cost, and more are on the way.

James Cannon: China at the Crossroads: interviewed by Jim Motavalli, Editor of E Magazine

James Cannon wrote the book Harnessing Hydrogen in 1995. His 1998 report for INFORM, Inc, China at the Crossroads, was a groundbreaking investigation of the potential for fuel cell development there. He heads Energy Futures, Inc. publisher of EV News, The Clean Fuels and Electric Vehicles Report and Hybrid Vehicles.

E: China’s population is growing at 19% a year, and they are curtailing bicycle use in favor of the private automobile.

James Cannon: In the U.S. now, American cars release about 30 tons of CO2 every second. It took the U.S. a century to get to be the world’s largest emitter, and China only started having private cars 10-20 years ago. At the current pace, China will quickly surpass the U.S.

When I visited China as part of a hydrogen delegation in 1997, we were hard pressed to find more than just basic research into the chemical and physical properties of hydrogen. Since then, China has made rapid progress in building a well-coordinated national hydrogen program. China is looking both at hydrogen production and the development of vehicle prototypes to use the hydrogen.

E: Could China go directly to a hydrogen economy since they don’t have a multi-billion dollar investment in a fossil fuel infrastructure?

James Cannon: The field is wide open because China doesn’t have an integrated transportation system for any fuel today. Hydrogen would be the most cost-effective approach for them. You can see this in Beijing. I attended the opening of the first natural gas pipeline in China five years ago, a big event that was then not attached to any transportation purpose. Now China has 5000 natural gas buses tied into that pipeline, the largest fleet in the world. The government is seriously considering bypassing oil.

Are you optimistic that China will develop a hydrogen energy economy?

James Cannon: Yes, China is very sensitive about this and is grappling with it early on. They’re hitting some of the dramatic warning signs of oil dependence. It’s fortunate that so much is available in demonstration programs and in the literature about the true potential of a hydrogen economy. It’s happening much quicker that we were thinking 10-20 years ago. The natural gas program is creating the infrastructure for using gaseous fuels, and that could speed up the timetable and accelerate the work on hydrogen.

The Next Great Economic and Social Revolution
This clean fuel could make obsolete our big-scale, polluting oil network through a locally based system. The first thing to keep in mind is that with distributed generation, every family, business, neighborhood and community is potentially consumer, producer and vendor of hydrogen and electricity. Because fuel cells are located physically at the sites where the hydrogen and electricity are going to be produced and partially consumed, with surplus hydrogen sold as fuel and surplus electricity sent back onto the energy network, the ability to aggregate large numbers of producer/users into associations is critical to energy empowerment and the advancing of the vision of democratic energy.

Empowering people and democratizing energy will require that public institutions and nonprofit organizationslocal governments, cooperatives, community development corporations, credit unions and the likejump in at the beginning of the new energy revolution and help establish distributed generation associations in every country.

Eventually, the end users combined generating power via the energy web will exceed the power generated by the utility companies at their own central plants. When that happens, it will constitute a revolution in the way energy is produced and distributed. Once the customer, the end user, becomes the producer and supplier of energy, power companies around the world will be forced to redefine their role if they are to survive. A few power companies are already beginning to explore a new role as bundler of energy services and coordinator of energy activity on the energy web that is forming. In the new scheme of things, power companies would become virtual utilities, assisting end users by connecting them with one another and helping them share their energy surplus profitably and efficiently. Coordinating content rather than producing it becomes the mantra for power companies in the era of distributed generation.

Utility companies, interestingly enough, serve to gainat least in the short runfrom distributed generation; though, until recently, many have fought the development. Because distributed generation is targeted to the very specific energy requirements of the end user, it is less costly and a more efficient way to provide additional power than is relying on a centralized power source. It costs a utility company between $365 and $1,100 per kilowatt to install a six-mile power line to a three-megawatt residential customer. A distributed generation system based on renewable energy can meet the same electricity requirements at a cost between $500 and $1,000 per kilowatt. Generating the electricity at or near the end users location also reduces the amount of energy used because between five and eight percent of the energy transported over long distance lines is lost in the transmission.

The energy revolution will advance on several fronts simultaneously. Before the hydrogen network can be fully realized, changes in the existing electricity grid will have to be made to assure both easy access to the web and a smooth flow of energy services over the web. Thats where the software and communication revolution comes in. Connecting thousands and then millions of fuel cells to main grids will require sophisticated dispatch and control mechanisms to route energy traffic during peak and
non-peak periods. The Windsor, Colorado-based Encorp has developed a software program for remote monitoring and control that would automatically switch local generators onto the main grid during peak loads when more auxiliary energy was required. Retrofitted existing systems are estimated to run about $100 per kilowatt, which is still less costly than building new capacity.

The integration of state-of-the-art computer technologies transforms the centralized grid into a fully interactive intelligent energy network. Sensors and intelligent agents embedded throughout the system can provide up-to-the-moment information on energy conditions, allowing current to flow exactly where and when it is needed and at the cheapest price. Sage Systems, for example, has built a software program that allows utilities to set back thousands of customers thermostats by two degrees with a single command over the Internet if the system is at peak and over-stressed.

Empowering the Poor
Incredibly, 65 percent of the human population has never made a telephone call, and a third of the human race has no access to electricity or any other form of commercial energy. Lack of access to energy, and especially electricity, is a key factor in perpetuating poverty around the world. Conversely, access to energy means more economic opportunity. In South Africa, for example, for every 100 households electrified, 10 to 20 new businesses are created. Electricity frees human labor from day-to-day survival tasks. Simply finding enough firewood or dung to warm a house or cook meals in resource poor countries can take hours out of each day.

Making the shift to a hydrogen energy regime, using renewable resources and technologies to produce the hydrogen, and creating distributed generation energy webs that can connect communities all over the world, holds great promise for helping to lift billions of people out of poverty. The goal ought to be to provide stationary fuel cells for every neighborhood and village in the developing world. Cooperatives, lending institutions and local governments might then view distributed generation energy webs as a core strategy for building sustainable, self-sufficient communities.

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