In the past couple of years, the conversation about hydrogen’s role in the decarbonization of the energy sector has shifted from how it can be done to when it will be done.

Decarbonization goals, decreasing costs of renewable electricity, and improved integration into more significant renewables are driving the demand for hydrogen. This will soon translate to an increase in demand for relevant infrastructure.

Most of the attention today is on major hydrogen hub projects and their role in developing the hydrogen infrastructure backbone and reducing the cost of clean energy and power. A big part of decreasing renewable electricity costs is having a sustainable and comparatively low-priced hydrogen production and distribution system. This is where distributed hydrogen production comes in.

At Modern Electron, we have been laser focused on this objective, creating technologies that convert natural gas into hydrogen at scale. But in this article, we will explore the industry as a whole to better understand how it’s evolving.

Hydrogen Demand To Fuel Microgrids

Microgrids today offer a unique application for distributed hydrogen, but hurdles still need to be overcome.

The vast majority of the microgrids we encounter are retrofits, which use both renewable energy and fossil fuels for power generation. The good news is that the latest microgrids also make integrating energy storage in the form of batteries easier while still handling load management and EVs as a resource.

This dynamic plays a role in developing future strategies since microgrids can offer incremental upgrades.

Starting from early 2021, large-scale infrastructure, especially in the industrial sector, has been receiving more attention which matches and exceeds the sale of offshore wind generation in Europe.

These scenarios are best played out at a large scale since that’s how they make the most sense. The emerging green hydrogen economy depends on infrastructure that can cater to growing demand from microgrids and other power generation plants.

Microgrids are small, self-sustaining networks of DERs or Distributed Energy Resources that operate as easily controllable entities which don’t share much with near-term opportunities.

Most of the microgrids deployed using distributed hydrogen since 2021 are remote microgrids made for locations where the traditional grid wasn’t available. This means these areas didn’t have pipelines to transport produced hydrogen.

Frost & Sullivan predicts that the global demand for green hydrogen will rise by over 100x by 2030. This means from a mere 40,000 tons to nearly 6 million tons.

Decarbonization by switching to hydrogen is viable if the challenges associated with production and transportation can be addressed. That’s been a particular focus of Modern Electron.

Since many countries are forced to work on reducing their reliance on fossil fuels, there is heavy investment in low or no carbon technologies, which include hydrogen but the question still is: which is the best way to produce hydrogen?

Hydrogen Production and Delivery at Scale

One of the challenges of adopting new hydrogen-fueled processes is the ability to access the required amount of hydrogen gas. , As a result, it is not a surprise that most hydrogen in the US, is produced near where it is used, usually at a nearby industrial site.

This is why the infrastructure needed for the distribution of of hydrogen gas around the country (including to the rapidly growing market for fueling and power stations) needs to be developed. This is one of the most significant rate limiting steps along the pathway to mainstream hydrogen fuel cells, electric vehicles, and similar tech.

At present, hydrogen is distributed via three primary methods:

Via a pipeline – This is the cheapest way to deliver a lot of hydrogen. Currently, the installed hydrogen pipeline network is expanding from around only 1,000 miles in the US to approximately ten thousand miles by the end of 2030. The pipelines mostly center around petroleum refineries and various chemical plants..

Tube Trailers – The fact is that transporting hydrogen via high-pressure tube trailers, ships, barges, trucks, and rail is expensive. The options are only practical for distribution routes of 200 miles or less.

Liquified Hydrogen Tanks – Also called cryogenic liquefaction, super cooling hydrogen gas to a point where it becomes liquid is an expensive but effective method to increase the density of hydrogen for transportation.

These approaches make it possible to transport the hydrogen gas more efficiently across longer distances using various modes of transportation. However, liquefaction is expensive. The other drawbacks of significant compression of hydrogen for transportation is that it rapidly dissipates from storage containers. So if the hydrogen isn’t used rapidly enough, transportation groups usually report daily hydrogen losses of up to 10%. This means that delivery and consumption have to be matched precisely.

It is worth mentioning that one of the primary focus points today is on creating infrastructure for distributed hydrogen. The goal here is not only to fuel microgrids but to enable a wide array of applications including fuel stations and other market needs.

Building new hydrogen pipelines requires significant investment and creates its own carbon emissions. Hydrogen’s unique properties also create unique challenges around materials used for pipelines and design requirements for the compressors needed to move hydrogen gas through pipes to customer locations.

On the upside, since hydrogen gas can be produced from natural gas, local production and optimizing for accessible local resources is key. Similarly minimizing distribution distances and effectively managing hydrogen storage costs can make distributed methane pyrolysis a viable alternative to replace petroleum products and fossil fuels in power generation, heating, and vehicle fueling.


There are are strengths and weaknesses to both centralized and distributed approaches to hydrogen production. Large plant central production models will help reduce hydrogen production costs but will mean greater distribution challenges to customer sites, investment in new pipelines and significant costs associated with storage.

Producing hydrogen as needed at points at or near fueling stations will significantly reduce distribution and storage costs but will likely show production costs above large centralized hydrogen production projects.

At Modern Electron, we solve these problems by thinking outside the box. We approach these problems from a unique perspective and deliver turnkey solutions that enable clean hydrogen and decarbonized natural gas when and where you need them.