Special Report: The Hydrogen Economy 2.0

Lithium-ion battery technology is leading the clean energy industry.

But you ignore the hydrogen market at your own peril.

From fuel cells to liquid hydrogen, new technologies are rapidly being developed that promise to make hydrogen a very important fuel source for the future.

The Fuel Cell Promise

Hydrogen fuel cell sales alone could easily DOUBLE... then TRIPLE... then grow MANY more times over.

The Hydrogen Council forecasts that by 2050, hydrogen will power more than 400 million passenger cars worldwide and up to 20 million trucks and 5 million buses.

It expects hydrogen technologies to provide 18% of the world's total energy needs by that time. The annual sales generated from the hydrogen fuel cell market are projected to reach $750 billion in revenue by 2050 while creating 3.4 million jobs globally.

sales hydrogen fuel cell vehicles

That's quite a move for the market from here. But it's not an impossible one.

As of February 2021, there are only about 9,000 fuel cell vehicles in America. That's virtually nothing. But there are pretty good reasons for low sales numbers today — and good reasons to expect sales to increase many times over.

First, it's important to remember that hydrogen fuel cell vehicles are not available in every area. It's very unlikely that you personally live near a dealer that sells a hydrogen fuel cell car. You could buy one, of course, but you'd most likely have to ship it to your house.

And then there's a serious lack of infrastructure. As of early 2021, there are only 45 public hydrogen refueling stations in the U.S., 43 of which are in California.

Both of these factors play a major role in low sales right now.

However, it's also very important to remember that hydrogen fuel cell technology is still developing.

The cost of producing hydrogen fuel cells has dropped significantly over the past several years.

Up until a few years ago, it cost up to $1,000 for every kilowatt-hour produced by hydrogen fuel cells.

But today, the Department of Energy reports that figure is down to $21 per kilowatt-hour on-board storage and $13–$16 at a refueling station.

And with continued development, the DOE expects costs to continue dropping ultimately to $8 per kilowatt-hour on-board storage and less than $4 at the pump.

net cost, hydrogen, graph,

Via Green Car Congress

Hydrogen fuel cells are becoming so affordable that they're now even being marketed to the public to recharge small electronic devices.

You can get a portable hydrogen fuel cell reactor to charge your tablets, cell phones, etc. right now for under $100.

Heck, you can even choose the color!

hydrogen fuel cell reactor

This portable hydrogen fuel cell reactor is among the first of its kind. Imagine how much more powerful these things will be in just a few years.

I'm guessing by that time, a hydrogen fuel cell reactor the size of today's laptop will be able to power an entire house.

Governments and industry leaders all over the world have already begun jumping on board.

The DOE announced it has plans to collaborate with the U.S. Army on the development of hydrogen fuel cell technologies for military and civilian use in 2020.

Of course, working with the military, the DOE was mostly tight-lipped about the plans. But military research (which has deep pockets) could fast-forward development of hydrogen fuel cells, making them more affordable, efficient, and faster than currently expected.

Projects like H2Rescue, which plans to develop a hydrogen fuel cell truck that will provide power, heat, and water to disaster relief sites for up to 72 hours. The DOE will support the effort, the U.S Army will lead the solicitation, and Cummins was just recently awarded $1 million by Homeland Security to construct these vehicles. 

Companies like Toyota have been marketing the Mirai, a hydrogen fuel cell passenger vehicle, to the retail market for a few years now with limited success. Costs, lack of infrastructure, and limited production have generally held back sales.

miraia 600px wide

Estimates put the current global fuel cell vehicle market at $15.5 billion. But as fuel cell technology becomes more affordable, that's expected to change. By 2025, it's estimated that the global hydrogen fuel cell market will be worth over $26 billion.

Hydrogen fuel cell technology is at the same point in development as electric vehicles were in the late 1990s.

The Toyota Prius, the first major hybrid electric vehicle to hit the market, came out in 1997. It was the first sign of things to come. Today, electric vehicles are a trillion-dollar worldwide business. The Mirai may serve a similar purpose: the first sign of a hydrogen fuel cell revolution.

For now, costs are still a problem. Toyota just recently began a promotion to sell its hydrogen fuel cell Mirai for just $50,000 — and that's with a $20,000 government subsidy.

Tesla's Model X starts out at $80,000 with every new model. But that is its luxury model. Tesla's Model 3, which is comparable to the Mirai in luxury, tends to sell at around $36,000.

But aside from production and consumer costs, hydrogen fuel cells don't really have a lot of serious support from many major automakers — not right now at least.

See, the science behind the case for hydrogen fuel cells is hard to argue against. The energy density of hydrogen is far higher than any lithium-ion battery, making for faster refueling and longer range.

But in terms of overall efficiency, lithium-ion battery electric is a bit better. And that has a lot to do with hydrogen production.

Even though hydrogen is the most common element in the universe, it's usually bonded with something else, like oxygen to make water. And producing hydrogen for fuel is very energy intensive and expensive, as is storing it. This results in high costs at the hydrogen pump for consumers.

It costs around $8 to fully recharge a Tesla Model 3. With that, they got a range of 263 miles for a fuel efficiency of about $0.03 per mile.

Comparatively, they filled up a Toyota Mirai for $75 and were able to drive 312 miles for a fuel efficiency of $0.24 per mile.

So for the consumer, a lithium-ion battery electric vehicle makes a lot more sense... but again, right now.

Hydrogen fuel cell technology is still developing — I really can't stress that enough.

Lithium-ion battery electric vehicle technology and sales didn't take off overnight, either.

The U.S. Bureau of Economic Analysis reports that there were only 4,736 electric vehicles sold in the U.S. between 2008 and 2010.

Last year, there were over 295,000 EV sales in America.

So can the hydrogen fuel cell vehicle population in America double to 18,000?

Absolutely. No problem.

Can it triple to 21,000?

Easily.

Could they reach 295,000?

Sure... eventually, when costs of technology and fuel come down and infrastructure is built.

But it's important to be an investor now because all that's happening now!

With costs coming down over the years, hydrogen technology could be on the brink of a major breakout. So it would be foolish not to have at least some exposure to the technology.

But fuel cells are just one segment of the future of the hydrogen industry.

Liquid Hydrogen

Want to see a significant source of greenhouse gas emissions? Take a look up at the sky.

plane 600px wide

Aircraft are major contributors to carbon emissions. To fly round-trip from New York to London produces the same amount of emissions as the average household produces heating their home for an entire year.

Right now direct emissions from global aviation account for more than 2.5% of the CO2 being released into the atmosphere. On the EASA (European Union Aviation Safety Agency) website, it says no aircraft can fly without their environmental approval. 

Over the years, aviation emissions have increased along with higher travel. Between 1990 and 2019, carbon emissions from the global aviation industry increased almost 150%. From 2012–2019, emissions increased another 29%.

airplane emissions 2013-2018

via Transport & Environment

And that's expected to continue growing. The International Civil Aviation Organization (ICAO) forecasts that by 2050, aviation emissions could increase by up to 700%, making aviation one of the fastest-growing sources of greenhouse gases.

Problem is, right now there are few alternatives.

Finding engineering solutions for fossil fuel alternatives to use in ground-based vehicles (cars, trucks, even trains) is much easier than it is with aircraft, which require far more power.

One solution, however, might be liquid hydrogen.

Before I go any further, be sure not to confuse this with hydrogen fuel cells. The hydrogen fuel cell is a separate technology.

Instead, this concept replaces the jet fuels used today with liquid hydrogen.

A little chemistry…

At ambient temperature, hydrogen is a gas. If it's cooled down enough, hydrogen will become liquid. And that liquid could be used as a great fuel for aircraft.

You see, liquid hydrogen is very light. A liter of liquid hydrogen at its boiling point weighs 71 grams. Compare that to a liter of water, which weighs 1,000 grams. (And water wouldn't lose more than 5% of its density when boiling).

Now, a 747 can carry nearly 240,000 liters of jet fuel. And with weight always a consideration in aviation, a lighter fuel could drastically increase efficiency and cut down on emissions.

Sooner or later, the public is going to put their focus on greenhouse gases from aviation. When that happens, switching to liquid hydrogen seems like it would make the most sense for airlines.

That's because going to liquid hydrogen won't require drastic design changes to aircraft.

Let's face it: If the airlines are going to go green, they're not going to buy brand-new aircraft to get there. They're going to convert their existing fleets to make them less polluting.

And converting from using jet fuel to electric batteries or hydrogen fuel cells probably won't even be feasible in the short term. On the other hand, switching from jet fuel to liquid hydrogen will require much fewer design changes, and thus much lower conversion costs.

Using liquid hydrogen as fuel isn't a new concept. Between 2005 and 2007, BMW produced the Hydrogen 7, a limited-production passenger vehicle that could run on either gasoline or liquid hydrogen. Again, this is separate from the hydrogen fuel cell vehicles being built today by Toyota and BMW.

bmw h7

However, a hydrogen fuel cell airplane is in the works... sort of.

In late February 2021, Ohio-based airship company LTA Research and Exploration unveiled plans to build a hydrogen-powered aircraft using the world’s biggest mobile hydrogen fuel cell. After over six years in development, the 18-meter-long, 12-engine aircraft was dubbed “Airship 3.0”

The craziest part? It costs $18.70. Sergey Brin, the owner of LTA and ninth-richest person in the world, has innovated something that could forever change the dynamics of humanitarian aid — and its filing price through the FAA is under $20.

The airship’s patent plans to use both hydrogen and helium to get the craft into the air. Hydrogen will give the aircraft the power to get off the ground, and helium will keep it off the ground. The design resembles one of a roller coaster — allowing rotation for the airship while it’s being created, making it easier for people to work on it safely on the ground. 

LTA is also planning to make a family aircraft, with claims on the website that it will “substantially reduce the total global carbon footprint of aviation.”

So even though hydrogen fuel cell technology is being incorporated, there still may be a future for liquid hydrogen in the aviation industry.

I've got to hand it to LTA, though — the aircraft design does look pretty cool.

LTA aircraft design

via IEEE Spectrum

Liquid hydrogen... hydrogen fuel cells…

Hydrogen is hot.

Think about this: It wasn't until recently that fuel cells even began gaining momentum. In 2017, China put hydrogen-powered buses on the road. In 2018, the world's first hydrogen-powered train entered service in Europe. Last year, the first hydrogen-electric plane took off in England.

Almost every country in Europe has signed to remove diesel-powered trains by 2050.

And let's be absolutely clear here: This is the kind of growth opportunity Wall Street drools over.

Battery electric vehicles are set to become the standard over the next few decades. But ignore the hydrogen market at your own peril.


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