Once seen as a utopian solution that would take decades to materialize, hydrogen is now firmly planted at the centre of the global decarbonization agenda — and it is time for miners to get in on the action.

The first few times green hydrogen was discussed at Energy and Mines conferences less than five years ago, the response was mixed: the audience recognized the technology’s full decarbonization potential, but thought it would take decades for equipment and production to become commercially competitive. Today, this timeline has been reduced to just 5 to 10 years, with many seeing 2030 as the tipping point when hydrogen will become the cheapest clean solution for many power and mobility applications.

In January 2020, the Hydrogen Council — an international advisory body that went from 13 to 60 members since its creation in 2017 — published a study on the path to hydrogen’s cost competitiveness, and predicted that hydrogen production and distribution systems at scale would unlock hydrogen’s competitiveness in many applications sooner than previously anticipated. Specifically, the analysis found that hydrogen’s total cost of ownership (TCO) would reach parity with other low-carbon alternatives by 2030 in 22 different applications.

Government-led expansion

In the year since the publication of this study, several electrolyzer manufacturers have announced plans to build large-scale production plants: ITM Power has started operations at its new factory in Sheffield, England, starting with a production line of 350 MW but with the ambition to increase it to 1 GW or even 2 GW as orders come in.

Earlier this year, Nel also went public with its plan to build a fully automated electrolyzer factory in Norway, cutting their price by 75% and bringing green hydrogen production prices down to the level of grey hydrogen (produced using fossil fuels) by 2025 — around US$1.50/kg.

Kevin Peakman, Hydrogen Director at Energy Estate, comments: “All three big electrolyzer companies have recently commented that they will have electrolyzers in the market within five years at half the current price, and that’s mainly off the back of economies of scale that they will realize through moving to manufacture-based equipment rather than project-based. Today, most of them make that equipment to order, but within five years, most of it will be coming off the shelf.”

This bullishness in the electrolyzer industry is mainly driven by government ambitions for hydrogen: as of January 2020, 18 governments, representing about 70% of global gross domestic product, had developed a detailed roadmap to kickstart their domestic hydrogen economy.

“What we’ve seen lately is an acceleration on the part of governments,” notes Julien Colas, Global Partnerships and Solutions at Engie’s Hydrogen Business Unit. “In Europe and Australia, they are putting money on the table to kickstart the hydrogen economy, which will enable the orders for 100 MW scale projects. This in turn will enable the electrolyzer suppliers to invest in new automated plants,  ramping up production and lowering costs. ”

Pilots coming to fruition

The other element prompting electrolyzer manufacturers to make plans for gigawatt factories is the expectation that pilot projects under construction today will lead to large-scale orders in the coming years. For example, Anglo American is in the process of piloting a hydrogen-powered heavy-haul truck at the Mogalakwena mine in South Africa, with the hope of switching entire fleets to hydrogen in the future.

"To date, this will be the largest hydrogen-powered vehicle that you would see on any road,” says Jan Klawitter, Head of International Policy at Anglo American. “If you think about the bigger vehicles that you have at the moment, they’re buses consuming about 15 kg of hydrogen a day. The amount of hydrogen that we expect the truck to use in the mine is up to a tonne of hydrogen per day. It’s a multiple of what you have at the moment, and that goes along with refuelling requirements. We’re expecting to get useful insights on all of that, in order to then ramp up and roll this out across our operations,” he adds.

At the time of writing, construction was underway at the site for all the basic infrastructure required for renewable generation and the electrolyzer, and Anglo American expected the hydrogen power plant module to be fitted into the prototype truck by the end of 2021. Of course, these projects take time, and even if the Mogalakwena truck performs well, more pilots will need to happen in other countries to test the prototype in different circumstances and environments. But considering the amount of hydrogen needed for just one truck, and the number of trucks that could be converted to hydrogen in the mining sector, Anglo American’s pilot alone is seen as a potential catalyst for the hydrogen economy.

"We expect this pilot project, because of its sheer size, to have a positive impact on the cost curve of hydrogen and fuel cell equipment, especially if it is successfully deployed across our operations but potentially more widely in the industry, since other companies also need to decarbonize their operations. In terms of the amount of hydrogen produced, electrolysis and fuel cell capacity, if you put these trucks in place just in one mine, you immediately have more hydrogen consumption and capacity on the mine roads than you currently have in entire countries in the mobility sector,” says Klawitter.

In fact, heavy mobility is expected to be the first hydrogen application to reach cost parity with current solutions. Alfred Wong, Asia Pacific Managing Director at fuel cell provider Ballard Power Systems, believes that the industry is just “four or five years away from getting to TCO parity for heavy-duty trucks on mines that have to bring diesel to site by ship or truck.”

Order books lag behind

However, all the excitement and ambitious announcements coming from the hydrogen sector have yet to materialize in electrolyzer and fuel cell providers’ order books. In the mining industry, for instance, many have expressed interest, but only Anglo American and Fortescue Metals Group are actually installing electrolyzers on site to test out hydrogen applications.

"There’s a lot of interest and mining companies are developing plans, but right now, funding could be a challenge in some of these projects,” explains Alan Kneiz, Global Business Development Director at Cummins.

At the time of writing, the largest electrolyzer in operation in the world was 20 MW — a Cummins electrolyzer system installed at the Air Liquide hydrogen production facility in Bécancour, Québec.

While predictions indicate that manufacturers will benefit from economies of scale in the next five years, there is still a chance that this won’t happen, particularly if project developers continue to hold off on placing orders.

“For prices to come down, people need to place orders so manufacturers can convert their fabrication process from made-to-order to a manufacturing process, where they have all the necessary items to build the units on the shelf. Based on the forecast that the electrolyzer companies are seeing, they are predicting that they’ll be able to reduce the cost of electrolyzer by half by 2025, but obviously if the forecasts don’t materialize, they won’t do that,” warns Peakman.

More experience necessary

The truth is, while the green hydrogen economy is undeniably accelerating, it is still nascent. Electrolyzer manufacturers themselves need to gain experience before they can deliver the promised gigawatt facilities. “The focus now should be on scale. As we think about the 20-100+MW scale projects on the horizon we need to take learnings from the 2-5MW projects that have already been commissioned,”  notes Kneiz.

Hydrogen is almost certainly going to play a part in the mining sector’s decarbonization — whether it is used for power in microgrids, in mobility, or in processing. Most likely, green hydrogen will be produced on site and used in more than one application. But equipment providers need to test their products in a variety of mining environments before they reach commercial maturity.

“The mining environment being fairly remote, there’s still a lot that we need to learn,” admits Wong at Ballard. “There are specific operating conditions at mine sites but a lot of that can be learned from the on-road experience we’re gathering from our heavy-duty trucks and buses. The fundamental technology is all there, it’s really about gathering real-life experience operating in these types of environments.”

People who work in the hydrogen space agree that all the elements needed to make green hydrogen applications a reality in the mining sector are already there: the ability to generate cheap wind and solar power, the ability to convert that electricity into hydrogen, store it and convert it back to electricity when required. “All the components are there, but what hasn’t been done even at pilot scale is integration. That’s the key piece that’s missing: the integration process is what needs to take place. It’s the willingness and preparedness to invest in doing some trials,” notes Peakman.

Small is beautiful

If mining companies want to see hydrogen opportunities materialize by the time they aim to hit their decarbonization targets, now is the time to get involved. Any pilot project, no matter how small, will support the development of the hydrogen economy and — perhaps more importantly — prepare organizations for the transition.

“Small is beautiful, and pilot projects are not only about the technology; they’re about prepping your organization and working on the cultural change that's needed. When you’re talking about integrating renewable hydrogen in a mining ecosystem to provide electric power, but also to fuel heavy mobility, you are breaking silos, and that might not feel very natural at first for a large mining company. You need to change little things, but these small cultural challenges will allow you to co-create an optimized and integrated energy ecosystem,” advises Colas at Engie.

One of the low-hanging fruits miners could explore for hydrogen implementation is mine camps, a good testing ground where potential errors don’t have a very high impact. “Between a solar system and a hydrogen system, you could get to a point where you could power those camps completely on hydrogen and take them off grid. I think camps offer the best opportunity and are the perfect size for doing some very good early installations around some of those hydrogen mechanisms,” says Peakman.

Another area of interest to miners could be rail applications. Various companies, including Alstom and Talgo, are planning to roll out fuel cell locomotives in Europe in the next couple of years, and trains are considered to be a natural match for hydrogen, since predefined routes lower the requirement for refuelling infrastructure.

John Schellenberg, Mining Product Manager, Trucks, Global Mining at Hitachi Trucks, explains: “Thinking of some of the mine sites that I’m aware of that run their own rail systems to port, if they were able to generate hydrogen locally, the rail segment is a no-brainer. If you have a 100-150 km rail segment going to the port, that’s an easy run for rail. All you’d really have to do is change your locomotive and have your fuel system, and you’ve just decarbonized your entire rail system.”

Hydrogen’s potential in decarbonizing the mining sector is widely recognized. In power, storing renewable energy as hydrogen would allow for time shifting, bringing renewable penetration in microgrids to 100%. In mobility, while battery-electric vehicles may become the preferred solution underground, hydrogen’s versatility and flexibility make it the stronger contender for open-pit heavy-haulage. And with current developments around rail and shipping applications, hydrogen could even allow miners to tackle some of their scope 3 emissions. So while the technology may take another few years to become commercially competitive, it is not too early for miners to jump on the bandwagon.

"In 2020, you had a lot of institutional players that started to forecast the installation of electrolyzers in the world. We went from a moment of visionary companies advocating for hydrogen, to it being a consensus within governments and the full ecosystem,” reminds Engie’s Colas. “Even though the electrolyzer and fuel cell production is not there yet today, it will be growing exponentially in the coming years. So, now is the time to develop the projects that will enable the pathways to net-zero mining operations.”

Written by Melodie Michel, Reporter, Energy and Mines