Hydrogen’s Role in the Low Carbon Transition

Image of a gas station and gas pumps in the middle of a desert where the hydrogen's role starts

How is hydrogen going to become a decarbonization energy vector for the world?
How do we get from the cost of clean hydrogen today to the cost of where it needs to be? When are we going to introduce hydrogen to the world? What’s the fastest way to do it? Here is some insight from Industry Leader Chris Reid.

With international governance shifting policy towards climate change, energy alternatives have never been more relevant. Electrifying fuel sources is a main focus in this transition.

What is Electrification?

Electrification refers to the process of replacing technologies that use fossil fuels (coal, oil, and natural gas) with technologies that use electricity as a source of energy. Depending on the resources used to generate electricity, electrification can potentially reduce carbon dioxide (CO₂) emissions from the transportation, building, and industrial sectors.

Complete electrification is not a goal that can be achieved in the short-term, with the US government wanting to reduce GHG’s (Greenhouse Gases) by 50% by 2030. This poses an imminent issue.

A potential solution to this issue is hydrogen, presenting an alternative path to low-carbon energy production that could become a major factor in achieving GHG targets in North America.

We recently talked with Chris Reid – CEO at Ekona Power Inc. and Managing Director of IBET (Innovative Breakthrough Energy Technologies), about the current state of hydrogen and its role in the low carbon movement. Chris summarized the current state of hydrogen this way,

Hydrogen has been around and viable for decades, the world is just starting to realize that we can’t electrify everything and we need a solution in chemical fuel - that is hydrogen

When asked about the current state of hydrogen, and at what scale it could be viable in 2021, Reid had this to say “It’s not economically viable, it costs too much right now — that is the challenge – to figure out ways in which we can reduce the cost of clean hydrogen. Everyone is excited about it and when that happens, they expect the cost structure to come down from where it is, but it won’t be that simple.

We have steam methane reformers all over the place, the problem with those is that they produce a lot of CO2. We can sequester the CO2 but it almost doubles the cost. People also look to electrolysers but that can quadruple the cost.”

The future of Hydrogen’s viability then lies in 3 key factors:

  1. Carbon intensity reduction
  2. Cost to produce hydrogen at the lowest cost per tonne of CO2 displaced
  3. Residual carbon intensity – how many negative emissions will be required to get to net zero carbon?

We asked Chris 4 questions to provide insight:

1. Interest in hydrogen development is growing, what are some of the next industries that could implement hydrogen?

“It goes right across the gambit. There is a hydrogen Market that is already out there — for methanol, ammonia, upgrading and refining oil, hydrogen peroxide, etc. There are emerging markets for natural gas decarbonization, and for energy use. We don’t really use hydrogen for energy today except in a few fuel cell applications. These are huge opportunities. If we take natural gas and replace it with hydrogen, imagine if all the gas delivered through the grid today was hydrogen. That is what we aim to do, but it will take a while. We need to start with industry before it can be adapted to our houses.”

2. What are the obstacles facing hydrogen use moving into the mainstream?

“Three things – Cost cost cost! Really, it’s about production costs and costs of large scale hydrogen distribution. Right now we can make lots of hydrogen from SMR and CCS and it’s pretty cheap. A lot cheaper than electrolysis for dispatchable applications. We can sequester the CO2 at this low price and then we can pipe it into the existing network of natural gas lines up to a certain percentage of hydrogen.”

Carbon Capture Sequestration (CCS): This process requires carbon dioxide (CO2) emissions recapturing from various industrial processes, such as steel and cement production, or the burning of fossil fuels in powerplants. Once recaptured, carbon is transported from where it was produced and stored deep underground in geological formations.

Steam Methane Reformer (SMR): The process of steam reforming involves methane and other higher hydrocarbons reacting with steam in the presence of a catalyst to form both carbon oxides and hydrogen.

“That poses the biggest challenge – how do we get it to the customer? We have to start to convert the transmission systems. I’ve installed a lot of hydrogen refueling stations and the cheapest way to get it to my customers was always liquid. You produce it from natural gas through an SMR, liquify it, put it in tanker trucks and deliver it. You can do that for transportation applications but for heating applications that is too expensive. We need to get it into the pipelines and come up with a distributed way to produce hydrogen anywhere on the grid.

This requires CCS infrastructure (Carbon sequestration infrastructure) – it has to be on a geographical formation where you can put CO2 in the ground. We need to create hydrogen from natural gas while not creating CO2. Ekona Power does that through a process called pyrolysis. It takes the natural gas, produces hydrogen and turns the carbon into solid carbon, rather than CO2. You can take that solid carbon to an industry and they can use it – making the hydrogen even cheaper and available anywhere on the grid. Of course electrolysis will have a role and we will use it with cheap intermittent renewables and wherever we are dumping power.


We need chemical fuels – we don’t have the capacity in this country to electrify everything and if we did there are sectors that couldn’t take that price point”

3. What are some applications of hydrogen that the average consumer is not aware of?

“The very first market that adopted hydrogen is fuel cells for energy power is the large distribution centres around the world, operating huge fleets of electric lift trucks which use batteries and electricity to move pallets – companies with huge distribution centres such as Wal-Mart and Amazon. Fuel cells and hydrogen allow these companies to move more pallets per hour and increase their productivity.

The shirt that you are wearing, the books on your shelves – many objects have all been touched by the blades of a forklift – most people don’t realize this stuff. This is a multi billion dollar market and when they use hydrogen fuel cells as opposed to batteries and chargers, they are not limited by the amount of charge they have, they don’t have to swap batteries or go to charging centres – the productivity went up by 3 to 4 points which is a big deal.

Walmart, Sysco, Amazon, Nissan have all started to convert these huge centres of production over to hydrogen. There are probably 40,000 fuel cells that they have sold in the market. They are the largest user of liquid hydrogen in continental North America, feeding this market. And nobody knows about it!”

4. Where can an investor go to learn more about hydrogen?

The Transition Accelerator Group in Alberta is good. They’re working on this issue specifically. They’re looking for Alberta to be a world leader in hydrogen. A lot of investors in Ekona like Suncor and Cenovus are a part of this investment movement. We spend a lot of time talking to provincial governments trying to convince them that they need to embrace hydrogen as a path forward. Alberta is working with the Transition Accelerator to develop infrastructure to support a greater overall transition.

Enercan has a lot of material on it, the Japanese have done a lot of work with it, our minister of environment Johnathan Wilkinson is a big supporter of it. This has taken a lot of time, convincing and work to get this support.

Companies out in Alberta are exploring how Bitumen fields can be harvested as hydrogen producers. We worked closely with Emissions Reductions Alberta who can get a lot of the credit for lobbying the Alberta government around hydrogen.

We have never seen the level of interest in investing in hydrogen technologies that we have now.

Biden’s 50% carbon reduction is a great goal, but not practical without using the existing infrastructure and alternative avenues to electric batteries. This isn’t a time for magical thinking – it’s a time for math, science and economics to step up.”

Gas pump in front of snowed mountain

Genus Director of Sustainable Investments, Mike Thiessen agrees with Reid, “Climate action requires a variety of technologies and thinking. The Genus Fossil Free High Impact Equity fund has invested in hydrogen, solar, wind, and energy efficiency technologies to contribute to the world’s need for clean and affordable energy.”

Have a question or want to learn more? Join us for our May 20th webinar “Hydrogen’s Role in the Low Carbon Transition” with Chris Reid and Mike Thiessen as they discuss the current hydrogen landscape in Canada: where it stands today and what it could be tomorrow.


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