Delivering on hydrogen: Transport and storage solutions

Using hydrogen as a fuel source could unlock new opportunities for improving energy security and climate mitigation. Operating at scale in the future, part of hydrogen's appeal lies in its potential to decarbonize hard to abate industries, transportation, and power generation. However, to use hydrogen worldwide at scale, sufficient infrastructure is needed to safely transport and store it.

Most hydrogen today is compressed and transported via pipelines, which have low operational costs and a proven track record. Work is underway globally to scale up and innovate other transport and storage solutions to handle the anticipated increases in volumes of hydrogen and the likely long distances it will need to travel. Besides pipelines, other options for moving hydrogen may include liquid ammonia, liquid hydrogen, or liquid organic hydrogen carriers. Currently, there is no one-size-fits-all, cost-effective method of transporting and storing hydrogen. The various methods offer different benefits, and all present some level of risk given that hydrogen and its derivatives require controls to enable its safe handling. As such, transportation and storage options require careful risk assessment.

Going the distance: Hydrogen transportation

In the near future, when quantities or distances of hydrogen become greater, the most viable methods that could make transporting it possible are ammonia, liquid hydrogen, and liquid organic hydrogen carriers (LOHC).

Ammonia

Ammonia is one of the most attractive options for transporting hydrogen over large distances for several reasons:

• As it is a widely used fertilizer, ammonia production already has established trade routes and storage infrastructure.
• Ammonia also contains more hydrogen by weight than liquid hydrogen or pipelines, meaning more energy can be transported via ammonia for the same volume.
• Ammonia can be stored as liquid at relatively moderate temperatures and moderate pressures.

However, despite these factors, the "cracking" process that decomposes ammonia back to hydrogen is energy intensive, leading to a potential 13-34% energy loss. Future development and demonstration at scale could make this a more efficient process.

Further, as ammonia is toxic, specific risks apply to transporting and storing it. Operators must strictly follow regulations and safety procedures to prevent any leakage that may harm public health or the environment, or that could cause fire and explosion.

Liquid hydrogen

While liquid hydrogen is an environmentally safe option given that it is non-toxic, transport and storage can be technically complex because of its flammability and low temperature. The liquefaction process requires large amounts of energy, and once produced, liquid hydrogen must be kept at -253ºC or lower, which requires specialist vessels to store and transport.

In 2022, the Hydrogen Energy Supply Chain project set to demonstrate the world's first shipment of liquefied hydrogen. Learning from this, the project plans to build a commercial-scale hydrogen carrier by the mid-2020s.

Liquid organic hydrogen carriers (LOHCs)

A LOHC is a liquid capable of storing and releasing hydrogen through a chemical reaction, which differentiates it from liquid hydrogen (which is not chemically bound to any other substance). Hydrogen transported using a LOHC is relatively inexpensive and safe, given that there is no need for compression and existing assets can be used to store it. LOHCs are stored under ambient conditions and behave in a manner similar to conventional, petroleum-derived liquid fuels.

To progress with LOHCs, there may be a need to develop alternative LOHCs that fulfill several criteria, such as thermal and chemical stability, relatively low toxicity, and high hydrogen storage capacity.

Compressed hydrogen

Transporting compressed hydrogen via pipelines, either newly laid for hydrogen use or through existing natural gas pipelines, is another option. This method could be a lower-cost option for delivering large volumes of hydrogen in regions such as North America, Europe, and China, but pipes made of high-strength carbon steels may be susceptible to hydrogen embrittlement. Careful evaluation and engineering studies of existing pipelines may be required to establish if a network is suitable for long-term hydrogen transportation. Upgrading pipelines may be difficult but is possible.

Other risks to hydrogen pipes are familiar and may include external corrosion, hydrogen embrittlement, accidental damage (due to digging, for example), exposure to natural hazards, vandalism, sabotage, and vehicle impact.

Compressed hydrogen can be used as an alternative fuel in the automotive and transportation industry. For instance, fuel cell cars are powered by compressed hydrogen gas that feeds into a fuel cell.

Overcoming storage limitations

Once hydrogen is produced and processed, it may require distribution and storage. Hydrogen has a high energy content by weight but not by volume, which can be a particular challenge for storage. As with the different transportation methods, hydrogen can be stored physically in gaseous or liquid form. Likewise, each storage method has advantages and limitations. Other than cost differences, important considerations may include operating temperatures and pressures, capacity, and scalability.

Due to its very low boiling point liquid hydrogen requires very well-insulated vessels for safe and effective storage. Gaseous hydrogen requires high-pressure solutions for storage and transport to achieve an energy density that is gets close to the cost effectiveness of liquid hydrogen.

Another option is to use a liquid organic hydrogen carrier (LOHC), which are compounds that chemically bind and release hydrogen through chemical reactions.

One concern often raised is hydrogen embrittlement, where pipes and vessels can become brittle in the presence of hydrogen. However, the causes of embrittlement and the mitigations are well understood within the industry. Selecting hydrogen embrittlement-resistant materials reduces this risk, or potentially using barrier coatings can protect from hydrogen permeation.

De-risking hydrogen

Hydrogen can be a significant pillar of future energy policy. As hydrogen's use grows, current transport and storage capacity options will likely scale up and help drive hydrogen utilization across various industrial sectors.

With the focus today on understanding how technical and safety concerns are being managed in hydrogen production, transport and storage, as well as how different options can be scaled, there is an increased demand for insurance markets to help protect organizations in this space.

The hydrogen economy contains many known risks, including hydrogen specific physical and chemical properties, alongside emerging risks that may come with scaling up or investment risks of first-movers. Opportunities and challenges with hydrogen's scaling up will require ongoing analysis and continuous monitoring to improve stakeholders' understanding of the risk profile for hydrogen projects.

Marsh is the only broker to offer a hydrogen insurance facility, backed by a panel of A-rated global insurers. It provides pre-agreed coverage, uniform terms, and risk engineering services, giving developers better certainty and reducing the time required to secure the required coverages. The facility secures 100% insurance capacity for construction and operational risks up to US$400 million and is available for any hydrogen project anywhere in the world.

For more information support about risk management planning and solutions for hydrogen projects, contact your Marsh advisor.

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