August 27, 2020 Read More →

Falling costs of green hydrogen production make H2 economy possible

NS Energy:

The 2020s could prove a tipping point for green hydrogen as production costs fall significantly around the world, according to a new analysis.

High hopes have been pinned on the emission-free fuel to drive decarbonisation across heavy-polluting sectors like industry and transport, by providing an alternative to traditional, carbon-intensive fuels such as diesel and petrol.

Cheaper forms of hydrogen currently exist – grey and blue – but fossil fuels are used to power the electrolysers that separate the gas from water, offsetting the environmental benefits of its end use.

Green hydrogen is produced using exclusively renewable energy sources, such as wind or solar, so the entire process is effectively carbon free.

Analysis compiled last month by the Institute for Energy Economics and Financial Analysis concluded that a surge in new utility-scale solar will push much of Texas’ remaining coal-fired plants into retirement in the next few years, such is the pace of deployment and economic advantage. 

The Institute for Energy Economics and Financial Analysis (IEEFA) has warned of an “incredible supply shortfall” in green hydrogen by 2030, as estimated global demand of 8.7 million tonnes a year far outpaces an expected supply of just three million tonnes a year.

It adds that, despite 50 new renewables-based hydrogen projects being announced in the past 12 months, many could face delays due to “uncertain financing, cumbersome joint-venture structures, and unfavourable seaborne trade economics”.

“Governments will need to get behind these new projects and work hand-in-hand with industry as the world transitions away from fossil fuels into cleaner renewable energies,” says IEEFA analyst Yong Por.

[Andrew Fawthrop]

More: A green hydrogen economy is looking more realistic as production costs are set to tumble

Posted in: IEEFA In the News

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