July 16, 2020 Read More →

IHS Markit says green hydrogen will be cost competitive by 2030

PV Magazine:

The price penalty the industry pays on green hydrogen is set to fall over the next decade, according to a new study on hydrogen economics by IHS Markit.

This year will likely be remembered as a turning point for hydrogen. Policymakers have prioritized a range of project announcements, reports, and legislative packages to give impetus to the development of this new energy carrier. Rapidly falling costs for hydrogen are also driving this wave of announcements.

“Costs for producing green hydrogen have fallen 50% since 2015 and could be reduced by an additional 30% by 2025 due to the benefits of increased scale and more standardized manufacturing, among other factors,” said Simon Blakey, a senior adviser for global gas at IHS Markit.

Green hydrogen produced via renewables-powered electrolysis is the preferred hydrogen fuel, as the splitting of water does not release any carbon into the atmosphere. The International Energy Agency (IEA) states that 1 kilogram of green hydrogen, containing about 33.3 kWh, comes in at €3.50 to €5, which is anywhere between €0.10/kWh and 0.15/kWh.

Reforming methane from natural gas, meanwhile, releases carbon into the atmosphere, but is considerably cheaper. The IEA says that the natural gas-based form of hydrogen, grey hydrogen, costs €1.5/kg or €0.045/kWh. According to IHS Markit’s analysts that price delta is set to close over the next 10 years, due to economies of scale and renewable energy deployment.

The rapidly falling costs of wind and solar have already had a considerable impact on the price development of green hydrogen. With mammoth projects underway or in development, additional price reductions in all required technologies can be expected. Australian renewable energy producer Austrom Hydrogen announced plans just a few weeks ago for a 3.6 GW solar-powered hydrogen facility in Queensland.

[Marian Willuhn]

More: Green hydrogen to reach price parity with grey hydrogen in 2030

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