A Few Home Truths About Hydrogen for Data Centre Operators

Hydrogen has considerable potential for the data centre industry. It is very energy-dense, and burning a kilogram of it provides 2.6 times more energy than burning a kilogram of natural gas. 

When burned in air it produces none of the sulphates or carbon monoxide through which fossil fuels damage air quality both outdoors and in (although it does produce some oxides of nitrogen). 

Even more attractive for data centre backup, when used in a fuel cell, which uses the reaction between hydrogen and oxygen to produce electricity without combustion, it produces nothing but water. 

As regulations on carbon emissions tighten, cleaner hydrogen-powered systems will offer a way for data centres to comply with future environmental standards. Hydrogen fuel cells also offer a reliable and continuous power supply, which is crucial for data centres that require uninterrupted operation. And they are scalable, so they can be adjusted to meet the varying power demands of different data centre sizes. 

Market snapshot

In 2023, EU-27 hydrogen consumption stood at 7.3 million tonnes (megatonnes or Mt), equivalent to around 2% of total EU energy consumption. 

The first hydrogen-powered backup fuel cells for data centres were deployed in the Netherlands in 2023 and adoption is still as low as 3%, but according to the EUDCA hydrogen fuel cells will be on the agenda for 19% of operators by 2027. 

According to the European Hydrogen Observatory the hydrogen market will grow 56% to 2030 and 127% from 2030 to 2040. The European Commission expects renewable hydrogen to cover around 10% of EU energy needs by 2050. 

Reality check

However, the hydrogen market has a very long way to go in terms of feasibility for data centre facilities and, in particular, environmental impact. 

While definitions are still being agreed, we should be wary when people talk about hydrogen as a universal green solution due to these limitations. 

Although hydrogen is one of the most abundant elements in the world, manufacturing it is incredibly energy intensive, and currently, a huge proportion of hydrogen production relies on fossil fuels. Just because a facility can run on hydrogen doesn't mean that its operations are automatically green.

The hydrogen rainbow

Hydrogen fuel is classified into different types based on its production method and resulting environmental impact, often denoted by colour codes. 

The summary below  gives an approximate overview of the current categories, their environmental impact, and (where figures are available) how much is being produced across Europe:

The terms above have been taken from the IEA, but overlap considerably with the simplified colour scheme of the EU. Separate production figures are not available for all colours of hydrogen. 

While some progress has been made on an EU definition of low-carbon hydrogen there are, as yet, no internationally agreed technical definitions, and they can obscure many different levels of potential emissions. 

For example, for so-called “blue” hydrogen produced using natural gas with carbon capture and storage (CCS), emissions per kg of hydrogen produced can vary substantially depending on the technology used and the capture rate. 

Challenges and opportunities

As with many of the new fuels we are currently investing in, there are a range of challenges to consider. We are reliant on the private sector to create the fuel, so both production and distribution have to be commercially viable.

• Captive market: The European hydrogen market is currently predominantly captive (88%), which means it is produced and consumed by a large on-site facility. This means that only 12% of “merchant” hydrogen is available for external distribution and sale.
• Storage and transportation: The distribution and sales of this 12% also presents challenges, and infrastructure is still in the project development stage. Hydrogen is a challenging fuel to store and transport due to its low density and the potential for leaks. 
• Stepped blending: A promising option which deploys existing infrastructure is to blend hydrogen into the gas network incrementally. For producers, this would create a crucial early market for hydrogen, stimulating production and investment. For network operators, blending allows them to leverage their existing infrastructure and gain experience in handling and managing hydrogen over time. For end users and the environment, a blend provides an immediate reduction in carbon emissions. A 20% hydrogen blend, for example, would result in a 7% reduction in carbon emissions. A 100% hydrogen gas network might be realised by the 2040s.

The outlook for hydrogen

Hydrogen has been the fuel of the future for decades. In fact, there is an energy industry joke “Hydrogen is the fuel of the future, and it always will be.” 

This is harsh, as huge efforts are being made to bring new, cleaner, hydrogen-based solutions, such as “turquoise” hydrogen, to the market, and to create more climate-conscious categories. 

Hydrogen fuel cells are already being successfully deployed in the data centre environment, and at AVK we constantly track the latest low-carbon fuels to ensure that we can provide customers with low-to-no-carbon backup (e.g. hydrogen fuel cells) and lower-carbon (e.g. hydrogen-blended gas) primary power. 

With support from a range of industries, including ours, the potential for hydrogen to be a clean and sustainable energy source for data centres is significant, and ongoing advances in technology and infrastructure are gradually making it a viable option.