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May 9, 2019

Energy industry has new focus on hydrogen and renewable technology

The energy power industry is going through a major transformation as the demand for diverse forms of energy are rapidly increasing. Renewable energy and cleaner fuel are disrupting traditional business models as well as the functioning of power grids themselves. 

Over the past 10-15 years, power grids have increasingly become decarbonized, replacing aging facilities with more affordable natural gas and renewable power generation. Demand for liquid natural gas (LNG) is escalating; LNG now provides more fuel to power sources in the U.S. than any other type of power source. 

As solar and wind power sources have scaled, technology has improved their capacity to generate power while lowering installation costs. The price of renewable power has fallen rapidly, making them an affordable and accessible option.

New drilling technologies and advanced combined-cycle gas turbine (CCGT) technology has resulted in lowered costs for natural gas. Turbines that generate natural gas are more affordable, allowing power grids to decarbonize at a faster rate. For these reasons, natural gas is quickly replacing coal and oil power sources.

Natural gas is beneficial to the environment. Combined-cycle natural gas produces 65 percent less CO₂ than a similarly-producing coal-fired plant. And, when paired with a 50-50 split between gas and other renewable sources, the difference improves to 85 percent. 

According to a report by researchers at Carnegie Mellon University, the combination of natural gas and renewables replacing coal and oil producing power plants has lowered carbon emissions from the U.S. power sector by 33 percent since 2005. 

While the energy industry continues to benefit from natural gas and renewable power generation, hydrogen power offers a new phase in the development of renewable energy power sources. Scientists are researching the use of hydrogen as a way to store electricity during low or negative-pricing periods. 

Renewable energy has the ability to produce hydrogen through the process of electrolysis, where excess electricity is used to break the water molecule (H₂O) into separate hydrogen and oxygen molecules. This renewable hydrogen can then be stored and eventually used in a CCGT power plant to produce electricity. 

Hydrogen can be produced from diverse resources, such as:

  • Fossil fuels

  • Biomass

  • Water electrolysis. 

There are a number of ways to produce hydrogen, including:

  • Natural gas reforming/gasification

  • Electrolysis

  • Renewable liquid reforming

  • Fermentation. 

Several hydrogen production methods are being tested, such as:

  • High-temperature water splitting

  • Photobiological water splitting

  • Photoelectrochemical water splitting.

Industry and government research projects are working on ways to lower the cost of production technologies in order to make hydrogen production costs more competitive. The answer to a cleaner, more cost-efficient energy future lies in the combination of gas and renewable energy sources. As the technology of storing energy becomes more refined, zero-carbon energy systems offer the potential to provide the world with sustainable, reliable, affordable power. 

Marsh & McLennan Agency (MMA) offers knowledge and expertise on risk and insurance issues that impact the renewable energy industry. Contact us here to learn more about our creative risk solutions for the energy industry.