There’s little doubt that wind and solar are now true market competitors to conventional energy sources, namely coal, oil, and nuclear. This marks a long-awaited moment in efforts to turn the tide on climate change—cheaper renewable power is critical to meeting the 2015 Paris Agreement target.
More than half of all annual additions to the world’s power generation capacity have been renewable technologies since 2011. While hydropower has historically been the most common source of renewable primary energy worldwide, wind and solar are fast growing. Their share of total renewable energy generated globally grew by 28.34 percent between 2000 and 2019. All renewables, including biomass and geothermal power, now account for 5 percent of all energy production internationally.
The financial advisory firm Lazard published data in 2019 showing that the levelized cost of electricity (LCOE) of renewables was now comparable with fossil fuels, giving already growing investor confidence a boost. BloombergNEF (BNEF) reported in April 2020 that the global benchmark for the LCOE for onshore wind and utility-scale photovoltaic (PV) had fallen by 9 percent and 4 percent, respectively, in the second half of 2019 alone.
Of course, the shift to renewables didn’t happen overnight.
Intentional, targeted policies over the past thirty years have accelerated technological innovation from the prototype phase to large-scale commercialization and marketization. Policy-led approaches like New York State’s Climate Leadership and Community Protection Act (CLCPA) and others across the globe have helped (and continue to help) lift the first generation of renewable technologies—especially PV panels and onshore and offshore wind turbines—into economic maturity. The CLCPA was revised in 2019 to require 100 percent carbon-free electricity by 2040. Today, the number of countries with renewable energy targets now in place has grown nearly four-fold since 2011. These policies, though each unique in shape, altogether led to a 470-percent increase in government investment in renewables globally, up from $55 billion to $260 billion.
Yet, despite it all, a carbon-free energy economy is not imminent.
Renewables’ share in the global energy mix remains small. In 2019, the United States consumed over 75 quadrillion British thermal units (BTU) of energy. Eighty percent of that total was produced using fossil fuels: petroleum (37%), natural gas (32%), and coal (11%).
The development of wind and solar has been uneven in terms of sector focus. Hard-to-decarbonize sectors like heavy industry, large-scale transportation, construction, and agriculture continue to principally rely on carbon-based fuels. Even if all electricity in the U.S. was generated through wind and solar, it would only account for about 27 percent of the country’s total greenhouse gas emissions. Industry and transportation are responsible for 50 percent of that amount, though the growth of electric vehicles will see some blurring between these sectors and electricity.
Despite supplying a record 43 percent of the country’s consumption of energy in 2019, the progress of Germany’s Energiewende, one of the world’s most ambitious energy-transition strategies, has plateaued. Now the country is unlikely to meet its 2020 target of reducing greenhouse gas emissions by 40 percent compared to 1990 levels. Energiewende will see all of Germany’s coal-fired plants shut down by 2038 and its nuclear reactors decommissioned by 2022. But this hole in the German base load is being dug faster than it can be filled by its existing renewable capacity. And that has forced Berlin to okay construction of new natural gas infrastructure and even a new 1,100-MW coal power plant to fill the gap.
Faced with the limits of existing wind and solar technologies, policymakers around the world are looking to build a richer, more diverse ecosystem of clean energy. And the technology that is on everyone’s minds is hydrogen.
A growing number of experts believe that the hydrogen fuel cell (a technology that is more than 180 years old) can carry renewable energy into sectors that wind and solar alone cannot. To work, a fuel cell needs only pure hydrogen—the most abundant element in the universe—and its only byproducts are pure water and heat. Hydrogen doesn’t exist in isolation on Earth, which means it has to be extracted from water or other molecular bonds. The processes for doing this, such as electrolysis and reforming, areenergy-intensive, which is why currently 95 percent of all hydrogen fuel is made using fossil fuels.
Clean energy can power electrolysis, but, until recently, the cost has made it unfeasible. Now, with the falling price of wind and solar, “green hydrogen” is attracting the serious attention of governments, energy activists, and investors. They’re also attracted to hydrogen as a storage technology for wind and solar. Stored hydrogen can be used to make electricity during periods of intermittency.
The world’s leading economies—China, Japan, Korea, the U.S., Saudi Arabia, to name a few—are seizing this opportunity, and have launched large-scale initiatives to secure a foothold in the new hydrogen economy. Hydrogen not only offers a new pathway for meeting their sustainability goals, but it could provide a much-needed jump in the recovery from the post-COVID-19 economic recession.
Q&A with Daniel O’Connell of Plug Power
What will it take to bring next-wave clean energies like hydrogen-based technologies to market maturity, like wind and solar today?
To find out, we sat down with Daniel O’Connell. He is an innovator with Plug Power, the world’s fastest-growing hydrogen company, providing both hydrogen fuel solutions and advanced fuel cell technologies. He was a member of General Motors’ hydrogen research-and-development laboratory and launched the successful startup American Fuel Cell, which Plug Power acquired in 2018.
Plug Power is a company that knows the challenges of scaling up a technology well, having grown from a clean-tech startup in 1997 to the largest consumer of liquid hydrogen in the world, valued at $230.2 million in 2019. Headquartered in Latham, New York, Plug Power’s fuel cells have been fitted into forklifts working in the massive, fast-paced warehouses behind Walmart and Amazon’s expansive distribution networks.
O’Connell manages the company’s operations in Rochester, New York. The facility manufactures Plug Power’s unique membrane electrode assembly (MEA), a critical component of its novel fuel cell technology, converting hydrogen to electricity.
Q: As a hydrogen veteran with more than 30 years of experience in the research and development space, you’ve seen this kind of surge in enthusiasm before. Much of your time at GM was spent as part of its fuel-cell vehicle lab in Honeoye Falls, New York, which closed in 2012 as the company refocused its efforts into electric vehicles.
With all this mind, are you optimistic about current efforts to scale up hydrogen energy? How is it different from earlier attempts, if at all? Do you feel the potential for green (clean) hydrogen is greater now than before?
A: You are correct there have been several cycles of enthusiasm for hydrogen and fuel cell technology development over the years. We are currently enjoying a surge in interest driven mainly by the recent significant reduction in the cost of renewable wind and solar electricity generation. Low-cost, green electricity combined with the cost reductions of electrolyzers makes green hydrogen competitive with other energy sources. Combining that with the volume/scale that Plug Power brings to the fuel-cell industry with nearly 40,000 forklifts in operation that are driving down the raw material costs and you have a lot of positive signs for the hydrogen economy.
Plug Power is the clear leader in global hydrogen consumption and if you think about all those warehouses having fork lift hydrogen refueling stations strategically placed across the U.S., we can easily envision a scenario where a Walmart or Amazon fuel cell truck would be able to transport goods from coast to coast, stopping all along the way to refuel. That represents the first step to a national infrastructure for hydrogen.
Q: The most persistent challenges facing companies looking to scale up clean-energy technologies like hydrogen come down to cost, industrial engineering, and market entry. The startup American Fuel Cell, which you led with partner David Wetter, met these head on through an innovative design for a critical component of the membrane electrode assembly (MEA), the proton-exchange membrane (PEM).
A PEM typically requires rare earth metals that are expensive, like gold or platinum, but your team at American Fuel Cell was able to dramatically reduce dependence on these materials to bring down the unit cost, along with other improvements. This kind of innovation matters—cost-effective PEMs will be essential to growing hydrogen’s share of the world’s energy mix.
What led American Fuel Cell to focus its efforts on PEM design? And how did you find the sweet spot between what the market demanded and what you could technically achieve? What resources were essential to the success of this process?
A: My partner and I started American Fuel Cell to bring fuel cell jobs back to Rochester and leverage the abundance of excellent fuel-cell resources available locally in industry, the supply base, universities, and well-trained human capital. American Fuel Cell wanted to produce a low-cost, high-quality MEA using a roll-to-roll capability in partnership with our local suppliers. Our strategy was to reduce the cost of the critical component (MEA) in the fuel-cell stack such that it would help energize the industry, and it has. We were focused on scaling up production to reduce cost and enable U.S.-based raw material suppliers. American Fuel Cell benefitted from the excellent entrepreneurial network of resources available in our area: NextCorps, Rochester Institute of Technology (RIT), Alfred State College, and many others, as well as funding from NYSERDA and other local investors.
Q: American Fuel Cell’s success as an innovative startup led to its acquisition by Plug Power in 2018, the world’s largest supplier and user of liquid hydrogen gas. Now, as the site manager of Plug Power's operations in Rochester, New York, you're part of a company that is making impressive strides towards realizing the hydrogen economy. Plug Power’s GenFuel module is attractive to investors while also providing a cost-effective, sustainable mobility and energy solution for industry. But Plug Power is not only making the case for hydrogen as a whole, its goal is to “make green hydrogen a ubiquitous fuel,” according to its website.
What are the biggest hurdles that Plug Power will need to clear on the way to meeting that goal? What strengths do you think the company brings to the problem of scaling up green hydrogen technology? Has American Fuel Cell’s PEM technology, now Plug Power’s, played a significant role in this strategy?
A: Plug Power is very well positioned to execute on the volume scale-up for MEAs for fuel cells but will need to add additional resources to apply the same manufacturing capability to the rest of the fuel-cell stack and system. Plug Power now uses the American Fuel Cell-designed MEA in a majority of their production volume. Plug Power has a long history of innovative fuel-cell system experience and has installed more than 80 refueling stations. Plug Power has performed more than 20 million refuelings and operated our fuel cells for more than 200 million hours. In addition, we recently acquired an electrolyzer company (Giner ELX) and we are in the process of productionizing that design. It will be critical that we are able to apply the fundamentals of design for manufacture (DfM) to electrolyzers in order to realize the cost and performance targets set by the company. If we can do the same for electrolyzer MEAs that we did for the fuel-cell MEA, then I think we will be well on our way to producing very low-cost, green hydrogen.
Q: There are two extremes when it comes to research and development of clean-energy technology: well-funded, large-scale corporate or government labs on the one end and self-funded, bootstrapping startup innovation on the other. You’ve experienced both of these intimately at GM and American Fuel Cell. Now, perhaps, you sit somewhere in the middle. Plug Power is an established, globally growing company, but it’s working in a sector where there is still considerable risk.
Risk is the name of the game for startups. Some see it as the key ingredient for innovation. Even so, the risk is especially high when it comes to clean-energy tech startups.
How did you navigate this risk at American Fuel Cell? How can larger, established entities—large corporations, government agencies, and policymakers—work in sync with startups to sustain a clean-energy economy? What are the relative strengths and weaknesses of each when it comes to commercialization in this space?
A: As a startup you are often times able to take on more risks than larger companies in order to move the needle on innovation quickly to establish a differentiating technology. However, the down side is that if you are too slow or the technology development takes too long the risk of failure can be daunting. Here in the Rochester area there is a strong entrepreneurial network but finding adequate funding is extremely difficult and time consuming—it really requires a concerted effort from the entire team (local, state, federal, investors, and academic). I spent many sleepless night wondering how we could survive long enough to get into production. American Fuel Cell would not have been successful without help from each and every one of the available resources.
Q: Plug Power has found highly successful commercial applications of hydrogen especially in the industrial material-handling sector. The company is currently growing its market into other uses, like on-road electric vehicles and robotics, focusing on heavy use, industrial assets.
Why is hydrogen better suited for industrial uses than electric batteries? Do you think projects like HYBRIT can work and help to transition heavy industries to clean energy? Is Plug Power currently involved in any similar projects or does it have plans to be?
A: There is a tipping point where fuel-cell technology is better for an application than battery technology and it all boils down to an efficiency formula that takes into account mass, volume, run time (range), energy-conversion efficiency, etc. An example might be back-up power for a cell tower that might be required to operate after a natural disaster for several days (off-grid). A supply of hydrogen running through a fuel cell to power that tower would be much easier and cheaper than adding sufficient batteries. At Plug Power we are currently evaluating multiple applications that have reached that tipping point based on the recent cost reductions of fuel cells, electrolyzers, and green electricity. Be on the lookout for a number of upcoming announcements from Plug Power around aerospace, industry, and back-up power.
Q: One barrier to the widespread adoption of hydrogen is not an engineering problem, it’s a public perception issue: safety.
Do you think such concerns about the safety of hydrogen vehicles or storage and transport of the fuel is justified? What challenges, if any, has Plug Power faced when it comes to ensuring that its services and products are safe?
A: While all forms of fuel generally have some level of safety concerns, it is my opinion that we have realized extensive experience in the proper way to handle hydrogen and fuel cells such that they can be used safely. We continue to implement everything we have learned in the past one hundred years to make hydrogen a viable fuel for multiple industrial and commercial applications.
Q: Even if the moment for hydrogen has finally arrived, it will be just one solution among many to transition the world’s existing energy mix to fully non-fossil sources. Innovations in clean energy will need to continue at a fast clip into order to meet the United Nations goal of limiting global warming to 1.5 degrees. If you learned one thing in your hydrogen journey that would help clean-tech entrepreneurs starting out today to succeed, what would that be?
A: I find that many people are convinced that it is an “either/or” debate on batteries versus fuel cells. I honestly believe that we need both in order to meet our long-term energy and climate-change goals. My parting advice to any entrepreneur would be that you need to lean on the advice of experts local to you and have the courage to give it your all and persevere even during the darkest days of launching a company—it will pay off in the end.