Why Hydrogen?

People shy away from radical change. They like to proceed in small steps, in other words to improve what they have. Today power from sun and wind is being forced into the previously developed infrastructure,  fuels developed (gas-to-liquid) which are usable in all cars, and gas produced which resembles natural gas. That is one possible way to achieve an energy transition away from a nuclear and fossil fuels, and towards an economy based largely on renewable energy sources. It is just that this way is very expensive.

Using hydrogen as the energy carrier is anticipated to be lower cost than today, and the investment in the necessary infrastructure will be more cost effective than  carrying on as before.
     First of all the efficiency of the traditional approach should be evaluated and compared to the hydrogen economy.  In addition the viability of producing gaseous and liquid fuels, such as methane and ethanol, from renewables should be studied.

Required area of arable land for a 100% provision for transport

Required bio-energy for the concept of bio-methane versus a hydrogen economy

Even if only a theoretical comparison is made, the differences in efficiency between the concepts become clear. Feeding of bio-methane into the gas network is still very favourable. In most cases today however, bio-methane is converted into electricity instead, with no mention made of the waste of heat that is also produced.

Decentralised Combined Heat & Power at each house is hardly viable. The necessary motor-generators are expensive, high maintenance, inefficient and not easily controlled. An electric grid connection  is still required and must always also be paid for. Operation is only worthwhile with high subsidies.
(This statement is rather unfair for larger schemes such at a hospital, university or shopping precinct.  These larger motor-generators can achieve 40% electrical efficiency from natural gas at optimum load, and the heat can also be used on site.  Maintenance is usually on hand too.  Such installations may bring an appreciation that such  CHP systems running on gas can be more cost effective than buying electricity from the grid.)

What is different about hydrogen?

Hydrogen can be produced from all forms of energy. Its production from biomass is simpler and more efficient than the production of methane. Hydrogen can also be fed directly into the natural gas network as the gas heating systems do not need to be modified (CH₄ and H₂ have the similar Wobbe index). With bio-gas that is not the case.  It has to be further refined and made to approximate to natural gas.

The main difference in comparison to bio-gas is the simple and efficient conversion of hydrogen to electricity using fuel cells. The output of low temperature fuel cells (e.g. PEMFC) is so flexible that no connection to the national grid is needed to cope with the changing demand of a household. This flexibility is also the reason why these fuel cells are also favoured by car makers. Every sector can profit from the outstanding properties of fuel cells: transport, domestic, businesses and industrial users.

Use of energy carriers other than hydrogen generally requires the use of wasteful heat engines (turbines and engines), but they may be catching up. (see my comment above).

Since renewable sources of electricity produce energy only part of the time huge overcapacity plus expensive electricity storage is needed to produce a reliable large scale energy supply.  The Kombikraftwerk studies have shown that at least 17% of the annual power consumed must come from dispatchable sources and concluded that this requires sufficient hot standby power to deliver the whole electricity demand when renewables are not available. Using hydrogen is different. The stabilisation of the national grid (whilst it still exists) occurs as a by-product, without additional investments.

COMMENTS: 

     The huge 60% energy loss in producing bio-gas from biomass by anaerobic digestion is because the process extracts only part of the energy.  The digestate is often spread on the fields as a fertiliser.  There it further decomposes releasing carbon dioxide.  A better and virtually permanent soil enhancement is to produce biochar as described in Renewable Cycle

     Hydrogen can either replace natural gas or be blended with natural gas in the gas grid.  These options should not be disputed since many of those pipes originally carried town gas which contained roughly 50% hydrogen.  The conversion from town gas to natural gas in Britain shows how rapidly such a change could be made.

     Fuel cells in stationary applications must be capable of running for 10 or more years to meet customer expectations.  This is a much bigger challenge than for cars which are parked most of the time   Since it is natural gas that is now supplied it is natural gas that suppliers and end users want to use for combined heat and power.
     There have been attempts to use stirling engines, but their electrical efficiency is too low under average residential conditions. 
     Great progress is being made in developing Solid Oxide Fuel Cells (SOFCs) which can run directly on natural gas, but it is difficult for SOFCs to achieve long life because they run at much higher temperature.  The materials they are made of are stressed every time they are fired up or shut down.  For this reason SOFCs can generally only vary their output over a 2:1 range.  Yet this could be enough if there is a hot water tank as an energy store, or some batteries included to buffer the variations in demand, or given an electric grid connection.  There are some designs that minimise this stress, and one which not only does that but also operates at a lower temperature which allows the use of lower cost methods of construction while claiming great flexibility.
     Japan is the one country to have made a big commitment to hydrogen and PEMFCs.  Not only does Japan have a programme to install huge numbers of PEMFCs in residences, its  major motor vehicle manufacturers offer fuel cell cars starting this year (2015).  Their concept is to produce hydrogen from natural gas at each residence to serve both a stationary CHP fuel cell and also provide hydrogen refuelling for a car.  In the longer term it is expected that hydrogen will be distributed to end users instead of natural gas.