Hydrogen in an industrial context: advantages and disadvantages with regard to energy production and storage


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The energy transition of industrial processes is considered to be one of the most important topics of our time, especially against the backdrop of climate protection. The main aim is to decarbonize industrial processes that were previously powered by fossil raw materials such as natural gas or coal. With regard to the successful reduction of emissions, green hydrogen is very promising – especially in areas where a direct electrification of processes is not yet possible. So, where does the use of green hydrogen in industrial processes make sense – technically and economically speaking? How about the scalability?

Hydrogen usage in industrial processes

“Green hydrogen is the petroleum of tomorrow” – says the German Federal Ministry of Education and Research confidently. In this context, Germany is pursuing a clear course as part of the energy transition. The aim is to use green hydrogen: i.e. hydrogen that is produced in a climate-neutral way with the help of renewable electricity: to minimize the dependence of many industrial processes on fossil fuels such as natural gas, coal or crude oil and, wherever possible, to end it completely – in line with the decarbonization so urgently needed for climate protection. To this end, Germany presented the so-called “National Hydrogen Strategy” in 2020. With the help of the strategy, Germany seeks to demonstrate how green hydrogen can be used to maintain competitiveness in the industrial sector, transport and the energy system. At the same time, the focus is expanded to achieving climate protection targets and opening up new markets.

Hydrogen production with natural gas

Although hydrogen per se is a colorless gas, a distinction is made between green, blue, gray and turquoise hydrogen due to the different ways in which it is produced. Green hydrogen is hydrogen produced by the electrolysis of water. This process uses electricity from renewable energy sources such as wind or solar power. Green hydrogen is thus considered the “cleanest hydrogen” and is accordingly the focus of the industrial energy transition. In contrast, gray hydrogen is usually produced from fossil natural gas using steam reforming. Since CO2 is emitted into the atmosphere and natural gas is required for the production process, it lags behind green hydrogen in terms of climate protection. The situation is quite similar with blue hydrogen, yet with the difference that in the latter case, CO2 released during production is partly captured and stored in the ground. Turquoise hydrogen is produced by the thermal splitting of methane. The processes are still largely under development.

Green hydrogen as a substitute for fossil fuels

Green hydrogen is considered a key raw material in the context of a successful energy transition. It functions both as a fuel in fuel cells and as a raw material for industrial processes – at the same time, there is also the possibility of using it to store and transport energy. This should make the energy supply of the future much more flexible. In the steel industry, for example, green hydrogen can replace coal as a reducing agent and thus make a valuable contribution to decarbonization. In the chemical industry, on the other hand, hydrogen is needed to replace crude oil as a raw material. Furthermore, green hydrogen can heat industrial furnaces – for example in the glass, cement and steel industries. Green hydrogen is also relevant for the use of waste gases and their conversion into fertilizer, synthetic and fuel precursors.

Decarbonization with hydrogen in non-electrifiable processes

According to the National Hydrogen Council, the most important industrial applications for green hydrogen are currently in the steel and chemical industries, since many processes here are not yet electrified or can only be electrified with great difficulty. The required amounts of electricity would simply be too expensive or not available in the necessary dimensions. Nevertheless, experts repeatedly point out that the use of green hydrogen must remain limited to these areas, as the energy carrier will not be available on a widespread and cost-effective basis in the near future. 

Green hydrogen: advantages and disadvantages at a glance

Green hydrogen is a great source of hope in industry due to its zero emissions and wide range of applications. In addition to the advantages, however, there are also key challenges that have so far stood in the way of widespread use.

Green hydrogen for energy storage

Hydrogen is not only an energy source and raw material, but also a storage option for renewable energy. If green electricity is available in surplus, it can be used to produce hydrogen, which can then be stored to provide electricity and heat again when needed. 


Various technologies are used in this context. Most well-known are probably the so-called compressed gas storage systems, which press gaseous hydrogen into tanks under very high pressure, and liquid hydrogen storage systems. Using a large amount of energy, the latter store hydrogen that has previously been cooled to -253°C as cryogenic liquid. 

Challenges when using green hydrogen in industrial processes

Despite its many advantages, the use of green hydrogen as an energy storage medium in industrial processes is not entirely unproblematic. In most countries, the production of green hydrogen is still at an early stage. For example, a total of 54 power-to-gas projects were counted in Germany last year. (Source: Statista Research). The main disadvantage of green hydrogen is the comparatively high cost of production and procurement. After all, green hydrogen is more expensive than the fossil-based gray and blue hydrogens and is difficult to scale, especially for industrial companies. 


While publicly accessible green hydrogen is not yet available in sufficient quantities for large-scale industrial use, in-house production facilities for green hydrogen – so-called “power-to-gas plants” – require high investment costs on the part of industrial operations. Another challenge that makes it difficult to use green hydrogen as an energy storage medium in an industrial context is the comparatively low efficiency of water electrolysis, i.e. the separation of water into hydrogen and oxygen using electric current. The effectiveness currently amounts to approximately 70 percent. Upon reversion, this means that around 30 percent of the energy originally used is lost, particularly in the form of heat. Storage, transport, utilization and possible reconversion to electricity further reduce the efficiency. Therefore, wherever possible, electricity from renewable sources should be used directly.

Thermal energy storage systems and their advantages over green hydrogen

Based on the status quo, green hydrogen will not be available on a widespread basis in the foreseeable future. For the time being, it will therefore remain too precious to be burned as  base load. Its use should therefore be limited to areas where a direct electrification is not possible.


Thermal energy storage solutions such as the ThermalBattery™ offered by ENERGYNEST present a cost-effective and reliable alternative to store renewable energy and use it for the electrification of industrial processes – entailing a significantly better efficiency than hydrogen. With only minimal losses, energy is stored as heat within the battery and released when needed. In conjunction with electric boilers, energy from renewable sources can thus be used to provide the heat needed for industrial processes. The efficiency of the ThermalBattery™ amounts to 98 percent – compared to 50 percent when green hydrogen is used.


Good to know: The technology of thermal energy storage systems, such as those used in the ThermalBatteryTM, has long since reached market maturity. Their rapid availability gives them an advantage over hydrogen solutions, especially in industrial applications for the electrification of processes, where many technologies are still undergoing scientific testing.


Another undeniable benefit is the fact that thermal energy storage systems can be easily and cost-effectively integrated into many industrial processes. According to studies, the payback for reducing CO2 emissions is remarkably fast to boot. All this makes thermal storage an attractive, easily scalable electrification solution for industrial processes.  

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