The onsite vs offsite hydrogen production debate
Hydrogen production for vehicles has grown to a point where both centralized and decentralized production is possible. PetrolPlaza talked to researchers and experts to dive into how both models differentiate and how they will develop.
Hydrogen refueling stations (HRS) have come a long way – from pilot projects to dedicated hubs intended to cover major transportation routes. Several sites can now produce their own H2 by installing electrolyzers powered by solar panels and wind turbines. This method can help enhance a station’s energy autonomy and avoid risks linked to delivery operations, often cited as some of the main challenges for H2 refueling facilities.
Several pilot projects launched in the last years have proven the model’s feasibility with cost still the biggest hurdle. The proliferation of this concept could lead to a divided scenario where some stations rely on centralized production while others become self-sufficient.
Comparing offsite vs. onsite hydrogen production
The distribution of hydrogen produced offsite is similar to that of liquid fuels. H2 is produced and then stored in high pressure tanks to be delivered at HRS. Sites require the necessary storage equipment and a high technical expertise to create a safe environment to handle the energy and its high volatility. This commonly involves integrating storage units, a compressor, cooler and dispenser. Centralized production facilities are the most common method across the world.
On the other hand, onsite hydrogen production moves most of these processes to the station. By installing an electrolyzer and renewable energy generation equipment such as solar panels or wind turbines, a site can produce its own H2. This type of integration has been piloted around the world for some years now.
Back in 2019, Nilsson Energy launched an off-grid hydrogen refueling station in Sweden powered by solar panels. This facility can not only cater to fuel cell vehicles (FCVs) but also supply another station located in the proximity. SimpleFuel has launched a similar prototype in the U.S. but on a smaller scale, combining electrolyzer production, PDC compression, onboard storage and dispensing in one unit able to fit in small locations. China’s Sinopec has found another path thanks to its methanol-to-hydrogen station, which leverages methanol’s reduced volatility and capability as a H2 carrier for production.
Onsite production’s path to feasibility
These examples are proof of the model’s versatility and potential but major obstacles remain. These can range from the energy’s price curve to the potential remodeling costs for a site.
The International Council on Clean Transportation (ICCT) has been tackling the challenges that onsite H2 production faces to become a feasible option. The recent study “Cost of renewable hydrogen produced onsite at hydrogen refueling stations in Europe”, outlines the need for a “3-euro per kg hydrogen subsidy” so that the industry can “advance down the price curve by 10 years” for green H2. Conducted by Yuanrong Zhou, Researcher at ICCT’s Fuels program team, and Stephanie Searle, Director for the Fuels Program at ICCT, the research emphasizes that government support can help this method become economically viable and replicated around the world.
“The hydrogen industry, especially green hydrogen, is still in its early development stage and although there have been some movements, people are still waiting for clear policy signals. For example, the additionality requirements in the Renewable Energy Directive in the EU, and details of the tax credits in the Infrastructure Reduction Act in the US,” describes Zhou.
The researcher also mentions that although the concept is “technically feasible” there are other obstacles to overcome before it can reach its full potential, such as achieving the safe and effective storage of H2.
The path to coexistence
Despite these projections, Zhou points out that onsite production will not take over the hydrogen refueling network as the go-to model. “Central production is needed when onsite production is not feasible,” adds the expert. The same way in which solar panels or wind turbines are effective depending on the area they are deployed, one can’t expect H2 refueling stations to have the same results in different areas.
Lorenz Jung, Managing Director and Chief Commercial Officer at H2 Mobility Germany, has similar ideas regarding the coexistence of both concepts. He believes that onsite production won’t make much of a difference in the future landscape of hydrogen mobility as results will not vary much between both models.
According to Jung, the only differentiator is the “access to the grid,” which would benefit a station that produces H2 “if the power connection is shared.” Again, it is a factor that depends on the area’s properties.
It is safe to say that decentralized hydrogen production is set to ramp up in the coming years. Its reliance on a location’s specifics and energy demand will hinder its development but it is poised to have a share of the market.
This article is part of the PetrolPlaza Special "The Future of Hydrogen." Check it out the rest of the Special here.
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