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SUMMARY FIGURETHE U.S. MERCHANT HYDROGEN MARKET, 2010-2016($ BILLIONS)
Source: BCC Research
INTRODUCTION
OVERVIEW
The purpose of this report is to measure and forecast the demand for hydrogen that is sold as a commodity for end-uses that range from petroleum refining to energy production. This commodity sale and use of hydrogen is informally referred to as the “merchant hydrogen market.” The remainder of the hydrogen market is referred to as the “captive” segment. The report defines individual markets and technical applications for hydrogen. In regard to cutting-edge developments, areas such as biological processing, localized production, and nanotechnology, where considerable research dollars have been expended, are covered.
Hydrogen is a colorless and odorless gas and is almost insoluble in water. The element was discovered by the English scientist Henry Cavendish in 1766. In the laboratory hydrogen is produced by electrolysis of water or by action of diluted acids on zinc or iron. Commercially, it is typically produced in a two-step process, wherein in the first step carbon monoxide and hydrogen are produced by combustion of natural gas with steam, and in the second step carbon monoxide is converted to carbon dioxide by the water-gas reaction and then the carbon dioxide is removed by washing. This report discusses many alternative methods for hydrogen production, most of which are relevant to the merchant market.
Among the key trends in the merchant hydrogen business is the drive to develop small-scale distributed production facilities and to perfect end-use devices and technologies such as hydrogen-powered fuel cells. In many cases, these efforts are more strenuous in overseas markets in comparison to the U.S. In fact, there have been significant cutbacks in government funding for hydrogen-related research in the U.S., as the Obama Administration has de-emphasized hydrogen-powered fuel cell vehicles in favor of electric and hybrid vehicle development.
STILL THE FUEL OF THE FUTURE
Hydrogen has been considered to be the “fuel of the future” for quite literally decades due to its abundance as an element and its nonpolluting combustion products. Although 75% of the elemental matter of the entire Universe is hydrogen, most hydrogen is bound up in compounds such as methane or water or more complex sources such as coal, and thus energy is required to break the hydrogen free from these compounds. Additional energy is required to purify, compress, and/or liquefy the hydrogen for storage and transportation to usage points. This energy input, as well as technical issues related to storage and transport, is what prevents widespread utilization of hydrogen. Widespread production, distribution, and use of hydrogen will require many innovations and investments to be made in efficient and environmentally acceptable production systems, transportation systems, storage systems, and usage devices, particularly fuel cells. In the U.S., virtually all hydrogen is made from natural gas, giving rise to significant quantities of unwanted and undesirable carbon dioxide (CO2) emissions. In particular, steam methane reforming of natural gas produces about 12 kilograms of carbon dioxide equivalent per kg of hydrogen produced.
Hydrogen is primarily used in petroleum refining and as a chemical intermediate, particularly in the manufacture of agricultural fertilizers. Hydrogen is inconsequential as a fuel source in transportation, and numerous technical and economic barriers still exist to widespread deployment of either hydrogen-powered engines in vehicles or fuel cell-powered vehicles that use stored hydrogen.
Despite the unfavorable economics for uses of hydrogen other than refining and as a chemical intermediate, interest in it has always remained strong because hydrogen in transportation would not directly generate greenhouse gases. And if the hydrogen can be obtained via “renewable” resources such as wind or solar power or even biological processing, it would truly be emission-free.
The cheapest way to produce hydrogen is natural gas reforming or coal gasification at a central plant. Hydrogen, particularly high purity hydrogen, can be obtained indirectly from electricity via water electrolysis, a usually costly process due to the high energy input. Because all current processes to produce hydrogen generate significant amounts of CO2 emissions, large-scale hydrogen production from natural gas and coal would be environmentally acceptable only if combined with carbon capture and storage technologies.
During, and in many cases beyond, the forecast period of this report, some essential technologies that could be deployed to produce hydrogen include fossil sources with carbon sequestration (coal and natural gas), renewable energy sources (solar, wind, and hydroelectric), biological methods (biomass and biological), and nuclear energy.
SCOPE OF STUDY
This BCC study focuses on key hydrogen technologies and applications. It provides data about the size and growth of both captive and merchant hydrogen markets, company profiles, patent trends, and industry trends. Cutting-edge developments, research priorities, and potential business opportunities are a key focus.
The report focuses on these key areas:
INTENDED AUDIENCE
With its broad scope and in-depth analyses, this study will prove to be a valuable resource, particularly for anyone involved with or interested in hydrogen production and utilization. It will be particularly useful for researchers and laboratory and government personnel working in research or company settings, as well as business professionals such as marketing managers, strategic planners, forecasters, and new product and business developers who are involved with most aspects of the hydrogen industry. It also will be of value to potential investors and members of the general public who are interested in acquiring a business-oriented view of the use of hydrogen in practical applications. The projections, forecasts, and trend analyses found in this report provide readers with the necessary data and information for decision making.
METHODOLOGY
Both primary and secondary research methodologies were used in preparing this study. Research methodology was both quantitative and qualitative in nature, the latter relying on Delphi-style forecasting techniques. Initially, a comprehensive and exhaustive search of academic literature discussing hydrogen applications was conducted. These secondary sources include hydrogen and fuel cell journals and related books, trade literature, marketing literature, other product/promotional literature, annual reports, security analyst reports, and other publications. A patent search and analysis was conducted. Other sources include magazines, academics, technology suppliers, technical experts, trade association officials, government officials, and consulting companies.
INFORMATION SOURCES
As is the case with most industries and economic sectors, data resources analyzing the applications and markets for hydrogen have become vast. There are numerous peer-reviewed, referred journals devoted solely to hydrogen technology, not to mention environmental journals that report on larger systems issues or strategic/economic issues in environmental management. The number of companies involved in this business is particularly large as many are in the developmental stage and thus account for only a tiny portion of industry revenues.
Data sources that were employed include press releases on company websites covering application news, company news, marketing news, and product news as well as brochures, product literature, magazines, technical journals, technical books, marketing and other promotional literature, annual reports, security analyst reports, and other hydrogen-specific business digest publications. An extensive patent analysis was conducted to gauge technological innovation and to determine research activity as it applies to new product development.
ANALYST’S CREDENTIALS
The author of this report, Project Analyst Kevin Gainer, holds B.A. and M.A. degrees in quantitative economic analysis and technology forecasting and has more than 25 years of economic, industry intelligence, and market research experience. He is the author of six published books and dozens of technical papers, analyses, and studies published in conference proceedings, including many unpublished proprietary analyses within corporations. He has worked as a Research Editor and Project Analyst at BCC Research since 1985, and has authored numerous BCC technology market research reports and periodicals.
BCC ON-LINE SERVICES
BCC Research offers an online information retrieval service. Its home page, located at www.bccresearch.com, enables readers to:
DISCLAIMER
This publication provides informative material of a professional nature. It does not constitute managerial, legal, or accounting advice, nor should it serve as a corporate policy guide or an endorsement of any given product or company. This information is intended to be as accurate as possible at the time it was written and was undertaken on a best-effort basis. The views expressed are those of the author and do not make any warranty, express or implied, for the accuracy, completeness, or usefulness of the information, or for the interpretation of data or its use by others. Projections involve risks and uncertainties that include but are not limited to technical risks associated with technology development, government regulatory approvals, and access to capital. The author assumes no responsibility for any losses or damages that may result from one’s reliance on this material.
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