Hydrogen Steps on the Gas
• Stuart Macdonald on the fuel of the future

The Economist, 12th March 2030

The world's last coal-fired thermal power station will today puff out its final watts of electricity and take its place in the history books alongside Nuclear power. This dying breed has finally run out of steam, as Hydrogen now drives the circuitboards of 21st century economies. Stuart Macdonald looks back over the events which have shaped the energy industry's journey since the new millennium.It may seem implausible now, but in 2000 the widely respected International Energy Agency (IEA) predicted that by 2020, global emissions of carbon dioxide would have risen by sixty percent on 1997 levels. This would have meant a staggering 700 million tonnes of carbon being pumped into the Earth's atmosphere each year. We take it for granted in our society that we will have enough hydro in the car to last us for a month; or that the Ballard™ in the cellar will warm our water and power our hairdryers. Yet these everyday assumptions were unheard of in 2000.

'Fossil' Fuels

Thirty years ago, companies such as Royal Dutch/Shell and Better Power (BP) reaped huge profits in excess of 10bn euros, purely from sales of crude oil and gas. However, only these and a few other companies correctly anticipated the future of the European and global energy markets. Much of their money from fossil fuels was invested in the development of renewable energy sources and particularly hydrogen, as the fuels of the future - a huge gamble at the time. This decision was to prove critical, as some of their less far-sighted peers, such as the now defunct ExxonMobil, paid the ultimate price for failing to appreciate the shift in market trends over the next decade.

For the former 'big oil' companies, the saying 'the Stone Age didn't end because we ran out of stones and the oil age will end before we run out of oil' has proven rather prophetic. Yet, it was undeniably the case that at the turn of the century, the world was dependent for its energy on fossil fuels such as oil, coal and natural gas, to an extent that left our economies dangerously exposed to the whims of the major producers.

There were several factors which caused the eventual death of fossil fuel energy production and led to the shift to today's cleaner and more efficient sources of power. Chief amongst these was the volatile price of oil in the fifteen years following the turn of the century. In 2000, the level of proven reserves of oil and other fossil fuels would have been sufficient to meet the thirsty world's energy needs for many centuries into the future. The business of oil exploration and exploitation had been highly profitable throughout the 20th century and there were few reasons to believe that this situation would not persist for the next hundred years. Production, however, was heavily concentrated in areas such as the Middle East and southern Russia, which together produced almost two-thirds of global oil supplies.

Seismic Shift

When the earthquake of 2003 struck western Asia, over 1 million people lost their lives and a further 14 million were left homeless. Regional infrastructure was ruined and the main supplies of oil were devastated. The problem was compounded when Islamic Fundamentalist terrorists began a series of co-ordinated attacks on the surviving oil-pipelines from the Middle East. These had the desired effect of causing huge disruption to Europe and America. The crisis was only alleviated when South Africa and Nigeria flooded the market with their stockpiles of oil, which allowed crucial time for the Middle East to recover. In spite of their actions, however, the price of oil briefly touched $100 per barrel before drifting back down to settle at around $40.

Many businesses today still talk of the fortunes that were won and lost in the great oil squeeze which followed the upheaval of 2003, as the former oil cartel OPEC saw production halved virtually overnight. As a result, the fossil fuel dependent economies of the world were plunged into a crippling recession in 2004, as consumer spending dropped away at an alarming rate. Customers had to bear the increasingly high costs of fuel and electricity, which were passed on by the utilities. It became common to find high streets deserted on previously busy Saturday mornings, as people battled against the debilitating effects of inflation. We had experienced economic slumps before, but never one this severe, where staples such as electricity and gas had become expensive and precious commodities.

It was this recession which initially raised the profile of alternative sources of energy and led to the decision by many companies to convert to Hydrogen and other renewable technologies offered by Ballard, Scottish Power and the Rocky Mountain Institute (RMI). However, the adoption of alternatives to fossil fuels was by no means assured even at this stage. The global economy had been developed around the burning of fossil fuels for energy since the 19th century. From transport, to electricity - the extent to which we were in the grip of coal and oil was absolute.

Silver Foxes

The roller coaster ride of commodity prices was to take yet another twist, when a succession of bitterly cold winters took an icy grip of Europe and North America from 2005-8. Supplies of oil and gas had yet to return to normal levels and the combined demand for energy resulted in terrible shortages. The situation came to head in 2008 when 5,000 OAPs marched through the snow to Downing Street, to protest at spiralling fuel costs. The high prices of electricity and gas had resulted in the deaths by hypothermia of 45,000 old people that winter.

Prior to this latest fuel crisis, the UK government and many others, had for years been investing millions of euros in the promotion of research into potential alternative energy sources for the 21st century. This succession of fossil fuel price shocks was damaging both economically and politically and there was an overwhelming public cry for change. It was this sentiment which was the driving force behind the International Emissions Agreement of 2010 and led to the introduction the now infamous Pollution Tax.

The Edinburgh Accord

At the time, many people were taken aback by the strength of the measures which were agreed upon at the Earth Summit in Edinburgh, 2010. Amongst the most unpopular were stringent controls on the biggest industrial polluters; a ban on the burgeoning trade in carbon emissions permits (which left Russia and the Ukraine in dire financial straits); and a tax on energy which was not produced from renewable sources (the Pollution Tax). Yet these decisions were crucial in order to allow our society to live in the relatively pollution-free conditions of today. They effectively redressed an ancient imbalance, whereby all resources had been allocated a value, except that upon which the human race is most reliant - the environment. The Edinburgh Accord essentially passed the cost that was paid by society as a consequence of pollution, onto the polluters. As thirty-five percent of total carbon pollutants came from the power generating industry in 2010 , this represented a rather serious cost, which consumers proved unprepared meet.

The obvious and most viable alternative to fossil fuel energy production was, as we now know, Hydrogen power. The crucial point however, was that although this was a relatively new technology, the public were already familiar with it. This was partly as a result of the decision by many companies (notably Sony and Nokia) to convert to hydrogen fuel cells after the initial oil price volatility. Yet the key link in this chain of events was the Hypercar.

Hypercars

The first models hit the streets in 2004 to be greeted by resounding public indifference. The ill-fated Necar from DaimlerChrysler initially suffered from serious reliability problems. There was even an horrific [alleged] report of one exploding during crash testing, yet it went on to achieve sales of over 200,000 across the EU within five years of its launch. There are similar tales for General Motors' Giya and Renault's Mondiale, however both progressed to sell a total of almost 1 million models. By 2010, one in ten cars were powered by hydrogen fuel cells in the UK, with a penetration rate of over one in four in Japan and parts of Germany and France. The steps taken at the Edinburgh Accord in the same year were not a mere formality, but they were far from the: "… ill-conceived ramblings of young boys playing at Communism", as one commentator astutely observed.

Enter the Dragon

Perhaps the most important consequence of the Earth Summit in 2010, however, related not so much to developed European and other OECD nations, but to Asia and in particular to China and India. The Accord identified the growth in the market for energy in Asia as the single largest threat to cleaner and more efficient energy resources and a better environment. In China alone, demand for electricity was already forging ahead by eight percent per annum, as a result of opportunities created in the wake of its accession to the World Trade Organisation in 2001. The provisions which were made under the terms of the Accord, to assist developing nations in the creation of an environmentally sustainable energy production programme, are unquestionably one of the most important achievements of this century.

Twenty years ago, China was about to embark on one of the most ambitious plans of energy generation and provision that the world has ever seen. The Chinese had already begun the monumental engineering feat of the diversion of part of the Yangtse River, to the arid northern area of the country. This project remains twenty years from completion and forms a crucial section of the Chinese blueprint for the future of not only their rural communities, but of the entire country. It would be pointless, however, if this were not combined with a reliable supply of electricity, gas and other resources, so as to enable businesses to flourish in a populous but underdeveloped region. The Chinese authorities had therefore decided that the solution was to build scores of fossil fuel burning plants, which would exploit the massive mineral deposits which lie beneath the Chinese plains. Had this part of the Chinese plan proceeded, it would have led to an environmental calamity on an unprecedented scale, with millions of tonnes of carbon and other harmful pollutants being pumped into the atmosphere on an annual basis. The IEA's prediction of a sixty percent rise on 1997 levels of atmospheric carbon by 2020 would have become a grim reality and the Earth would have continued its annual asphyxiation.

As a direct consequence of appeals at the Earth Summit and continued representations from Edinburgh Accord officials, the Chinese were persuaded of not only their moral and environmental responsibilities, but crucially of their economic ones as well. The high initial capital outlay required to install localised hydrogen fuel cells and other forms of distributed power, has been more than offset by the savings in production efficiency, but also as the national grid has not required expensive additions and improvements, so as to penetrate around the country. It is the economic argument which had to prove compelling and, along with a hefty warchest of 5 billion euros in energy subsidies for developing countries, this has proven to be the case. Other countries such as India and Pakistan have followed China's lead, with the result that they have become models of efficient energy production, if not yet actually of energy consumption.

Ruthless FOE

A further goal of the Edinburgh Accord has been to encourage energy efficiency. The Federal Office of Energy (FOE) was allowed wide-ranging powers in order to ensure that once a company had committed to efficient energy consumption and was in receipt of the resultant tax breaks, it did not cut any corners. The number of cases which FOE report each year remains high (1 million in 2029 ), however, the number of companies which they are required to police under their international remit has grown severalfold since their inception in 2015. As the atmosphere today testifies, the FOE's draconian punishments of large fines and tax hikes, have had the effect of allowing us all to breathe a little more easily.

2015 was a landmark year for other reasons, as it was also the first time in over 200 years, that the growth in carbons and other atmospheric pollutants had ceased. The joy of this announcement was short-lived however, as in July of that year, an explosion in the Nuclear reactor at La Rochelle in France caused the worst Nuclear accident since Chernobyl in 1985. The radioactive fallout spread across vast tracts of northern Europe, decimating crops and causing mass hysteria for a few awful days, as people tried to escape the onslaught of radioactive rain. 235 people were killed as a direct result of the accident and many more have been permanently disfigured.

Legacy of La Rochelle

Although the future of Nuclear power had until that point been uncertain, the governments of Europe shortly afterwards followed Germany's earlier lead and announced the immediate decommissioning of all of their Nuclear power plants. The contributions which were made by Nuclear power plants to total European electricity supply, had fallen to around two percent by 2014 and they were markedly less cost effective than competitors such as Hydrogen and gas fired power stations. Most important however, was their radioactive legacy, which will provide mankind with a terrible problem in the coming years, as secure containers become naturally breached.

Other countries such as China, India, Pakistan and Australia have followed Europe's lead, with the notable exception of the USA, which retains 15 Nuclear power plants in Texas. Governor George W Bush has intriguingly stated: "Our Nuclear power plants have yet to exhaust their natural usefulness. It would be more expensive to shut them down, than to keep them running at a loss". It is also interesting to note that America was not amongst the original signatories of the Edinburgh Accord, although they have since joined in 2020. Until fifteen years ago, the USA was the biggest global polluter by a large margin, pumping a huge 250 million tonnes of pollutants into the atmosphere in 2014. This compares with the total figure for the EU (which has a larger population) of 100 million for the same year.

One of the principal reasons that the Americans did not sign in Edinburgh was that they felt that the Accord did not take full account of the fact that many countries no longer produced emissions at the level of their allowances, under the Kyoto Protocol of 1998. Senators argued that America, as the world's leading economy, should be permitted some leeway in this matter because it would be much harder for them than for other countries, to stick to the emissions targets of the Edinburgh Accord. Delegates in Edinburgh unanimously rejected this claim as untrue.

Scorn in the USA

Since signing the treaty in 2020, however, the USA has demonstrated a remarkable ability to stick religiously to the emissions guidelines of the Accord. They have decommissioned all of their coal burning thermal power stations and are well into the Hydrogen transition programme of smaller local fuel cells, with larger gas-fired plants supporting the national grid until, until the wind and solar farms in each state are fully operational. The subject of their Nuclear generating capacity however, remains a thorny issue, but one which must be grasped and dealt with swiftly.

In Europe in 1998, barely nine percent of our electricity came from renewable sources . By 2028 that figure had jumped to ninety-eight percent . The EU's journey to better and cleaner energy production has not been easy and it has often met with stiff opposition from inert incumbents, content with the profitable status quo. The impact on world transport for instance, has been profound. The price of aviation fuel (kerosene) rose by nearly six hundred percent in the aftermath of the 2003 earthquake, when the main production facility in Riyadh was destroyed. This meant that within a matter of weeks, air travel became the exclusive preserve of the very wealthy and cheaper alternatives were rapidly required.

The 2019 transatlantic voyage by the Virgin Hyperfoil was the first to beat the historic 24-hour mark between Liverpool and New York. Although the boom in hydrogen powered crossings of the Atlantic has now ceased with the advent of Hydro-aviation fuel cells, for twenty glorious years the world had returned to the age of sea voyages and the advances which were made were astounding. The Hyperfoil was the culmination of a period of nautical design, which had spawned the Rocket, the Tempest and a fleet of other hydro-wings and Hovercraft.

Transport also has played a crucial role in power generation across distributed generation facilities in rural China, India and Africa. The ingenious Mondiale from Renault was the first car which could be used to generate electricity for homes and place of work. Today we all take advantage of our cars' spare generating capacity when they are not in use, by plugging them into our offices or homes. Through this simple act, over one third of total generated capacity is derived from this everyday source in Africa alone.

Nuclear Fusion at Last?

This design expertise has recently manifested itself once more in Scotland, where scientists at Edinburgh University last week claimed to have perfected the process of Nuclear fusion. The potential of such a discovery far surpasses any amount of energy that can be garnered from Hydrogen fuel cells. Over the past thirty years, the world has undergone a miraculous volte face in its consumption and production of energy, which has seen pollution levels fall five percent since 2020 levels (although overall this figure remains some thirty percent above that of 1997).

It could well be the case with last week's announcement that we are on the verge of yet another disruptive technology, which will fundamentally change the way in which we all live. Thankfully, the energy path which humanity now follows does not lead to the ultimate exhaustion of our planet, yet by 2060, could we be witnessing the closure of the world's final Hydrogen plant? Earlier this year, India had sold a total of 20 million hypercars, so the death of hydrogen seems rather unlikely. Yet it in 2000, everyone drove petrol powered cars and the last of these now fill the world's transport museums. If the last thirty years have taught us anything it is that the power and pace of change is irresistible and it should never be underestimated. Former ExxonMobil employees will certainly testify to that.

© Stuart Macdonald 2001

 

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