Low energy conversion efficiency weakens the case for hydrogen as a commercial fuel. Hydrogen requires one-too-many conversions to be as efficient as electricity (water to hydrogen to electricity), as opposed to a simple fuel to electricity conversion.
As battery technologies improve in quality and decrease in price, the viability of hydrogen as an energy carrier falls further. It would be both easier and cheaper to store energy as electricity in a battery than hydrogen in a compressed tank.
"The process to extract hydrogen from water – electrolysis – is a net-loss equation that consumes more energy than the hydrogen it extracts can generate," said Frost&Sullivan Energy & Environmental Research Analyst Pramod Dibble. "It is very difficult to store hydrogen, as it leaks out from almost any containment vessel. Although compressed hydrogen leaks much less than at atmospheric pressure, the act of compression requires about 2 percent of the usable energy in the hydrogen, which is already less by volume than fossil fuel sources.
"All these reasons together constrain the use of hydrogen to niche applications such as a liquid in rocket fuel. Unless there is a dramatic scientific breakthrough, hydrogen will remain an ill-suited alternative energy source in the 21st century."