Experts explain why green hydrogen costs have fallen and will keep falling


As electric and gas utilities contemplate investing in low-carbon hydrogen and the technology to produce it, the high price of today’s supplies and equipment – and the potential for cost declines – are major considerations. At the CERAWeek by IHS Markit conference, hydrogen experts and stakeholders expressed confidence that the cost curve will indeed bend in the coming years. The March 2 panel on low-carbon hydrogen production and technologies offered a detailed breakdown of the forces behind the price trend. To learn more, read Experts explain why green hydrogen costs have fallen and will keep falling.”

Key Takeaways:

  • Norwegian electroyzer-maker Nel ASA in January announced a goal of producing green hydrogen at $1.50 per kilogram by 2025. Malaysian oil and gas giant Petronas is targeting hydrogen production costs from the nation’s hydropower and solar resources in a range of $1-2/kg.
  • Green hydrogen produced with renewable resources costs between about $3/kg and $6.55/kg, according to the European Commission’s July 2020 hydrogen strategy. Fossil-based hydrogen costs about $1.80/kg, and the commission estimated the cost of blue hydrogen at about $2.40/kg.
  • Access to low-cost renewable electricity will be the most important factor in driving green hydrogen costs down to $1.50/kg, according to Everett Anderson, vice president for advanced product development at NEL Hydrogen AS.
  • The hydrogen production process of methane pyrolysis is attracting attention and investment for its ability to decompose methane at high temperatures to produce solid carbon rather than carbon dioxide. This could allow hydrogen production at nodes between natural gas lines and distribution systems.

Path to 100% Perspective:

Power-to-hydrogen is an alternate Power-to-Gas pathway. Power-to-hydrogen requires only electrolysis, where electrolyzers use excess renewable energy to produce hydrogen (from water) for direct use as a fuel. In addition, hydrogen as a fuel is carbon free. Complexities arise as there is, unlike the existing infrastructure for methane, no comparable hydrogen infrastructure. Still, hydrogen is an efficient and carbon-free alternative to renewable synthetic hydrocarbons and is worth investigating. Power plant technology manufacturers seem to understand this as many of them are in the process of developing technologies that are fueled by 100% hydrogen.


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