January 27, 2015

Japan’s hydrogen energy hype

http://www.japantimes.co.jp/opinion/2015/01/27/commentary/japan-commentary/japans-hydrogen-energy-hype/#.VMoNBS51Cos

Much excitement is permeating within the industrial segments related to hydrogen energy, following the government’s announcement in June 2014 of the “Strategic Road Map for Hydrogen and Fuel Cells.” It calls for creation of a “hydrogen-based society” as a trump card to prevent a further global warming and designates 2015 as the “first year”of the age of hydrogen.

In reality, however, the clean image of hydrogen-based energy and its economic viability are much exaggerated.

The government and business enterprises are rushing to building a hydrogen society in order to create huge public works largely funded by government subsidies, and gain rights and interests from them.

Creating demand for a hydrogen fuel and distributing it would require infrastructure preparations of enormous scales like mass-marketing of fuel cell-powered automobiles, building networks of hydrogen supply stations, construction of hydrogen liquefaction plants and creation of transport systems for liquefied hydrogen.

In contrast, the popularization of electric vehicles would not require large investments. Although battery cars represent another candidate for the next generation of motor vehicles, they can rely on facilities already existing throughout the country to generate and transmit electricity and, besides, quick recharging stations can be built for only around ¥5 million each.

As the infrastructure needed for a broad use of hydrogen is virtually non-existent, hundreds of billions of yen would have to be invested in construction of new hydrogen plants throughout the country. In addition, ¥600 million will be needed to build one hydrogen station to supply hydrogen to fuel cell vehicles — 120 times more than the cost of setting up a quick charging station for battery cars.

With an eye on making the 2020 Tokyo Summer Olympic Games an arena to showcase Japan’s hydrogen energy technologies, the government is working on plans to run fuel cell buses around the sports facilities and expanding networks of hydrogen fuel supply stations in the four metropolises of Tokyo, Nagoya, Osaka and Fukuoka.

Under the plans, the number of hydrogen stations will increase to 1,000 by 2025 nationwide from 100 in 2015, with the government bearing one half of the costs. This alone would represent splashing more than ¥300 billion in the taxpayer money.

In support of the plans, rosy statistics have been released by the government and think tanks. One corporation estimates, for example, that by 2020, the size of the fuel cell auto market will expand to the scale of ¥500 billion while the market for electric power generation using hydrogen will reach ¥900 billion.

Similarly, Deloitte Tohmatsu Consulting Co. forecasts that the sale of fuel cell cars will expand so rapidly that in 2025, 850,000 such cars will be sold in the United States, another 710,000 in Europe and 200,000 in Japan.

Lots of efforts are being made to drive home to the public the clean image of hydrogen as an energy source. The government is feverishly publicizing that hydrogen is the “ultimate clean energy source.” Hydrogen may appear to be the most appropriate substance to be touted as capable playing the principal role in building a carbon-free society because when it reacts with oxygen, only water is emitted. Moreover, some experts claim that if the exhaust heat is utilized in an energy supply system, the overall energy conversion efficiency could reach 90 percent, far surpassing 40 percent for thermal power generation.

These views would be correct if hydrogen was a primary energy source existing independently in nature. But hydrogen is a secondary energy source that must be obtained by reforming the composition and characteristics of hydrocarbons, which are the main components of natural gas and kerosene.

Since carbon dioxide is emitted in the process of producing this secondary energy source, it becomes clear that the government’s claim that hydrogen is the “ultimate clean energy source” is fishy.

Furthermore, hydrogen will have to be liquefied and refrigerated at 253 C below zero in order to be transported. This process would consume large amounts of energy and generate carbon dioxide. Thus it is no exaggeration to say that the claim of hydrogen being carbon free is a sheer fabrication.

Studies are being conducted on directly combusting hydrogen to power cars and generate electricity, rather than using it for fuel cells. Although no carbon dioxide is emitted in this process, nitrogen oxides, which form when nitrogen in the atmosphere combines with oxygen, are emitted, as in the case of gasoline-powered automobiles and thermal power stations.

Another shortcoming is the small size of the hydrogen molecule and a technological solution has yet to be found to prevent hydrogen leakage from pipe seams.

The aforementioned rosy statistics about the impact of the use of hydrogen on the economy are a pie in the sky because they are based on an optimistic assumption that all problems related to technologies and costs would be resolved easily. In other words, it represents a wishful thinking of those hoping to make windfall profits from colossal investments.

Some people say that even from a geopolitical standpoint, Japan is not fit to become a hydrogen society. European countries, for example, have closely meshed networks of pipelines that supply natural gas from Russia and they can easily obtain hydrogen with a simple method of reforming natural gas. The abundance of facilities to generate electricity through renewable energy sources, like solar and wind power, will make it possible to obtain hydrogen by using excess electricity to electrolyze water almost free of cost.

These processes are not feasible in Japan, which doesn’t have gas pipelines or excess electricity. As a result, it faces the high costs of obtaining hydrogen by reforming expensive liquefied natural gas and liquefied petroleum gas imported from the Middle East. There is no prospect in sight of the costs of producing hydrogen dramatically falling.

The recent fall in crude oil prices has reduced the cost competitiveness of hydrogen as an energy source. Moreover, hydrogen cars costing ¥7 million each cannot be expected to be sold in large volumes in the most competitive, Asian auto market.

If the present trends continue, fuel cell automobiles made in Japan may survive solely with large subsidies provided by the government and may be sold and used only in Japan.

In the long run, it is essential to continue research on fuel cells. Development of an alternative material to platinum, which is used as catalyst in the production of hydrogen but is the cause of the high costs, is necessary.

While a number of domestic organizations are engaged in such research projects, the government appears to be making the foolish move of providing subsidies to spread immature technologies that have not yet reached the level of practical use. This could turn out to be a repeat of a similar folly the government committed in the promotion of solar power generation.

Politicians, bureaucrats and business circles are all rushing to the hydrogen-related projects, for which huge investments will be made, on the pretext of “reducing reliance on Middle Eastern oil” and “creating a low carbon society.”

Ultimately, the taxpayers would have to pick up the bill for the public works projects the government will undertake blindly without assurance for their economic viability.

This is an abridged translation of an article from the January issue of Sentaku, a monthly magazine covering political, social and economic scenes.