To prepare for a greener tomorrow, reexamine H2 energy today

Special Focus: Future of hydrogen energy

To prepare for a greener tomorrow, reexamine H2 energy today

Today, roughly 70 metric MMtpy of H2 is produced to help meet rising global energy demands.1 Those are the highest levels in history; however, H2 comprises only a small fraction of the current global energy infrastructure. Despite dramatic improvements in the methods of producing H2 energy, many regions still lack the infrastructure and technologies required to expand production, delivery and usage of H2 in a meaningful way.

That may change, as governments and private businesses around the world seek out more sustainable and economic means of energy production. H2 can play a key role in preparing the global energy industry for a cleaner future but only if action is taken now to prepare. What does the H2 industry look like today? What are the fiscal and environmental factors driving its expansion? What role can advanced technologies like artificial intelligence (AI) play in facilitating the role of H2 in the energy needs of tomorrow?

The H2 industry

Worldwide demand for H2 has more than tripled since the 1970s, when interest in H2 power first spiked due to oil shortages, rising gas prices and concerns around the environmental impact of fossil fuels.2 Sound familiar? Most of those problems persist today, but demand for clean H2 as an energy source is rising again, fueled by new capabilities for H2 technology and growing international alarm over the climate change crisis.

While the use of H2 has traditionally been dominated by the industrial sector, such as oil refining and the automotive industry in the form of fuel cells, more recent initiatives are looking at producing H2 in a low-carbon manner to serve these same industries, expand into adjacent industries such as power generation, as a fuel supplement and even as a replacement to existing power grids with compressed H2 pipelines. In 2020, The European Union (EU) rolled out its new Hydrogen Strategy, supporting the installation of at least 6 GW of renewable H2 electrolysis facilities in the EU by 2024, with the goal of increasing renewable H2 production to 10 MMt by 2030.3 Similar projects—albeit on a smaller scale—are also underway in Japan.4

If this trend continues, a report from the Hydrogen Council suggests that clean H2 power could provide up to 24% of the world’s energy needs and generate a market worth $2.5 T by 2050.5

Cost advantages of H2 energy

The cost of producing renewable H2 via electrolysis is around $6/kg, although those costs are expected to fall as electrolysis technologies are improved and production facilities are scaled up.6 The real benefits come from the transport costs—it is roughly 10 times cheaper to transport H2 through a pipeline than electricity through cables.7 That is because it is much more efficient to transport materials over long distances in their molecular form, like H2, than as raw energy. This cost efficiency also makes H2 a much more viable option to transport across long distances, especially to more remote regions without existing energy distribution infrastructure. For example, H2 can be transported in a similar fashion as LNG.

In addition to already-high transportation cost savings, H2 can be used as an effective energy storage medium, as it can be stored for longer periods of time with little to no negative impact. For example, excess energy from renewable sources (e.g., solar PV and wind) can be converted (stored) by leveraging the electricity from these sources in the electrolysis process for producing H2. Conversely, traditional fossil fuels have multiple storage limitations, whether that is natural gas supplied via a pipe or environmental degradation and fire danger in the case of coal storage in a coal yard. This means that H2 can be sent in large quantities to remote locations or regions where demand is anticipated to grow, and be stored there until it is needed. For example, The Advanced Clean Energy Storage (ACES) project is one group already capitalizing on this potential with the construction of the world’s largest H2 storage center outside of Salt Lake City, Utah.8

Environmental impact of H2 energy

When H2 is used in a fuel cell, the only emissions are water vapor and warm air. On the surface, that gives it tremendous environmental advantages over traditional fossil fuels, which are responsible for most of today’s CO2 emissions. However, for H2 to become a truly clean energy source, it is important to understand that there are four primary categories of H2 production—called brown, gray, blue and green H2—each with different levels of emissions during the electrolysis production process. While other methods of H2 production exist, these four categories are the most prominent.

Unsurprisingly, brown H2 is the dirtiest form and accounts for roughly 25% of global H2 production. Brown H2 relies on a process called coal gasification and results in around 19 kg of CO2/kg of H2 produced.9 Gray H2 is produced from natural gas and emits smaller levels of CO2, but is still not entirely clean. Blue H2 is created through essentially the same process; however, the resulting CO2 is captured and either stored underground or repurposed, making it a more sustainable option. Green H2 is produced by electrolysis from renewable sources such as wind or solar. While green H2 only accounts for 1% of global production, it is the gold standard of H2 energy and will be critical to making H2 the most environmentally friendly and sustainable energy source.

Several initiatives are underway around the world to bolster the production of H2 with renewables, but perhaps the most significant one to date is the UN’s Climate Change Green Hydrogen Catapult initiative.10 The project’s goal is to accelerate the global production of green H2 by 50 times its current levels in the next 6 yr. This is a significant undertaking, but it may be necessary if green H2 is to become cheap enough to emerge as an attractive option for future power generation needs.

The role of AI

With so many potential benefits to a clean H2 energy system, why have countries not made this a major initiative already? Unfortunately, the production of H2 and revamping the existing global energy infrastructure to take advantage of H2 as a fuel—alongside initiating processes for generating electric power from H2—are all incredibly complex and expensive factors. This is where AI technologies come in. AI systems are already heavily utilized by several of the world’s largest energy providers in the oil and gas industry, and many of the technology’s benefits for optimizing efficiencies and producing cleaner fuels can be applied to the H2 sector.

One of the most immediate opportunities for AI is improving the utilization of renewable resources fueling the electrolysis process. Before an H2 plant is even constructed, AI systems can analyze the available resources, interconnections and landscape of the area to determine the optimal location, as well as which methods between solar, wind, geothermal and other renewables will be most effective.

This same principle also applies to planning and distribution strategies. Businesses and local governments can utilize AI to better determine the cost/benefit ratio with anticipated demand for energy using H2 as fuel or production feedstock, as well as optimal pipeline layouts and storage planning based on current energy usage patterns and future population and construction plans.

Once the infrastructure is in place, AI equipped with smart sensors and big data sets can also play a crucial role in maintaining and optimizing the production site’s operations. AI and machine learning platforms can continuously monitor thousands of measurements and data points to identify inefficiencies in H2 production, transportation and electricity generation, and provide recommendations to human operators on how to correct those issues.

Moreover, because AI is analyzing these systems in real time, it can quickly and accurately pinpoint pipeline leaks, faulty equipment or other issues requiring maintenance—and even offer predictive maintenance recommendations—to ensure the facility is running at peak efficiency.

The H2 future starts today

The concept for the H2 fuel cell was first conceived almost 200 yr ago; however, the technology still only makes up a small percentage of global power and energy infrastructure today. Significant obstacles stand in the way of broader adoption, including limited technological resources, relatively high production costs and a lack of investment to possibly compete in the future with existing electrical grids. However, H2’s potential as a clean energy resource is drawing renewed interest around the world.

AI will also play a key role in government and business initiatives to scale and establish clean H2 in the power systems of the near future. By equipping H2 electrolysis facilities and distribution systems with AI, providers can further improve upon recent H2 technology advancements to achieve higher production rates, reduce costs and develop smarter facilities. All these factors will be crucial to the success of clean H2 power. If these projects are not invested in today, that future may be here sooner than we think.H2T



  1 Schiavo, M. and Nietvelt, K., “How hydrogen can fuel the energy transition,” S&P Global Ratings, November 2020, online:

  2 International Energy Agency, “The future of hydrogen,” June 2019.

  3 “A hydrogen strategy for a climate-neutral Europe,” European Commission, June 2019.

  4 Walton, R., “Japanese launch world’s largest-class hydrogen production unit,” Power Engineering, March 2020.

  5 Hydrogen Council, “Hydrogen scaling up,” November 2017, online:

  6 Hydrogen Council, “Path to hydrogen competitiveness,” January 2020, online:

  7 Wijk, A., “Could hydrogen replace the need for an electric grid?” BRINK, January 2020, online:

  8 Hornyak, T., An $11 trillion global hydrogen energy boom is coming. Here’s what could trigger it,” CNBC, December 2020, online:

  9 Bartlett, J. and A. Krupnick, ”Decarbonized hydrogen in the U.S. power and industrial sectors: identifying and incentivizing opportunities to lower emissions,” Resources for the Future, December 2020.

10 Climate Champions, “Green hydrogen catapult,” Race to Zero, December 2020, online:


Steve Kwan is Director of Product Management for power generation/grid management at Beyond Limits, an industrial-grade AI company that builds advanced software solutions for the energy, utilities and healthcare sectors. He has more than 25 years of experience in product management and engineering, holding previous positions in the product organizations at OSIsoft and GE Energy. Dr. Kwan earned a BS degree in engineering chemistry from SUNY Stony Brook and a PhD in materials from Pennsylvania State University.