Toby Gill, CEO of British climate-tech company IPG, argues that a holistic approach is needed to make hydrogen the ‘fuel of the future’.
Investment in green hydrogen production is on the rise: take the UK Government’s £10 million project to decarbonise Glasgow’s local transport, or even Iberdrola’s €2.3 billion “green steel” project. Increasingly, there is a renewed sense that Hydrogen could actually be the fuel of the future.
So, with all these good news stories for the transportation and industrial sectors, what is preventing this same progress for distributed power generation, to ultimately bring about the demise of the diesel generator?
Why fossil fuels have remained dominant to date
To understand more, let’s take a closer look at what the diesel generator offers. Temporarily setting aside the emissions it produces, it’s a highly useful product across a huge variety of industries, from construction and mining, providing back-up power in hospitals and data centres, or even to power electric vehicles (EVs). That’s because of its ability to provide power exactly when and where a business needs it.
The large-scale investments seen in the news demonstrate a willingness to make the jump to greener energy. However, renewable fuels such as hydrogen still aren’t being adopted by businesses as a viable alternative to diesel.
The reason for this is risk. Diesel is widely accessible no matter where a company is based in the world, even if geographic location affects its cost. For businesses with a job to do, a project to build, or a service to deliver, diesel is a fuel source with as low an availability risk as there could be.
The world’s largest companies can fund dedicated, renewably powered facilities and even move operations to the optimal geographic locations to do so. Last year, for instance, Amazon invested some of its $2 billion Climate Pledge Fund in Infinium, a company that uses green hydrogen to generate ultra-low-carbon fuels. Meanwhile Ikea is planning to spend £3.4 billion by 2030 to ensure its global operations use energy from available wind and solar farms, alongside funding EV charging infrastructures and hydrogen to reduce the emissions from its delivery vans. But these only represent a small fraction of enterprises that continue to burn diesel every day.
Although smaller companies are willing to increase their initial outlays to minimise environmental impact, what they cannot compromise is stability. All businesses need a reliable and secure energy supply to maintain day-to-day operations – something that greener energy sources aren’t yet able to offer in the way diesel generators can. Green hydrogen, solar, and wind plants are all distributed power assets, reliant on specific conditions – such as the presence of water, sunlight or ideal weather patterns – meaning energy must be pumped in from outside industrial areas, often leading to uncertain results.
Moreover, the lifetime of diesel generators spans more than a decade, which when combined with the risk of unreliable supply of alternative fuels, results in a very slow rate of change. Instead of demonising companies that continue using diesel generators when they don’t have a true alternative, and ultimately consigning them to a transition too slow for our climate goals, now is the moment to work with these businesses to understand their pains and deliver alternative solutions that make sense for them.
Smoothing the road to hydrogen adoption
Further work is needed to make hydrogen supplies secure and truly sustainable. Firstly, not all hydrogen is produced the same way. As of 2019, the majority of hydrogen was generated using fossil fuels. Grey hydrogen, for example, is created using non-renewable energy sources and gives off carbon emissions, while blue hydrogen generation captures these emissions to decrease environmental impact. Green hydrogen, as will be created by the Glasgow project, is produced using electrolysis to split water into hydrogen and oxygen, leveraging renewable energy to do so.
But with so much complexity and uncertainty around the production — and therefore the secure availability — of greener fuels, investing in the infrastructure for a single fuel source presents a high risk to businesses. Companies need to be assured that they can get a long-term and reliable supply of their chosen type of hydrogen or alternative renewable fuel.
Due to the diesel generator being so good at the job it was designed for, and the transition to a greener alternative such as hydrogen being a precarious decision, industries currently face a chicken-and-egg scenario. Most energy providers don’t have the incentive to increase green hydrogen production when businesses aren’t ready to buy it, but without a reliable supply, business aren’t investing in power generation assets that have demand for those fuels. This will continue to undermine the progress we are making with wind, solar and energy storage. So, what can be done to further the progression towards a truly net-zero energy system for all businesses?
How can we turn aspirations into reality?
Fuel agnostic generators offer a way of providing onsite, dispatchable power without the risks presented by renewable fuel supply issues, enabling businesses to transition away from diesel sooner. These generators utilise a varying combination of fuels to produce the necessary power and switch between sources to ensure they use whichever is the most reliably available at the time – thus reducing the reliance on fossil fuels. Without this adaptability, companies will understandably continue purchasing diesel generators with the intention of running them for their lifespan, delaying the transition to more sustainable fuels for up to ten years at a time.
The diesel generator has delivered a one-stop solution for companies no matter their power requirements or location. Now as the transition to a more complex and distributed energy system continues — with hydrogen, wind, solar, and other sustainable fuels — procuring a renewable power solution for business needs is also becoming increasingly complex.
For example, a construction company with many sites across the UK or a delivery company with multiple depots require a solution for those cases where wind and solar are not practical or economically feasible. Because of these scenarios, committing to the removal of all diesel generators from construction sites or implementing 100% net-zero power generation isn’t possible. What fuel-agnostic generators offer therefore is another feather in companies’ cap, joining a suite of renewable energy technologies that can deliver net-zero power requirements in all circumstances.
Although energy security has presented challenges to the adoption of more sustainable fuels, being empowered to seamlessly change between sources will allow businesses to move forwards with their green initiatives. To deliver this vision and achieve a net-zero combination of hydrogen and other renewables as needed, there is a growing pressure for industries, energy suppliers, and technology providers to unite their efforts and help the market mature. Only then do we have all the components needed for a net-zero energy system that can provide power exactly when and where a business needs it.
Find out more about IPG’s work on flameless generator technology at ipg.energy.