Green hydrogen is set to become cost competitive with existing conventional hydrogen in two years thanks to plummeting costs of renewables and rising costs of carbon, said analysis firm Rethink Energy on Tuesday.
“In just two years green hydrogen – produced by electrolysers driven by renewable electricity – will undercut the cost of existing [and polluting] grey hydrogen supplies,” it said in a new report.
“Green hydrogen has become the technology that will fill the gap between renewable energy and net-zero emissions.”
By the middle of century, global total investments of USD 10 trillion would see the cost of hydrogen fall by more than 95% from levels seen in 2020, spurring a 10-fold increase in global demand, said Rethink.
The expected economies of scale would see the capital cost of electrolysers fall to about USD 340/KW by 2030, from USD 1,400/KW currently.
The analysts pointed to an already massive acceleration in this sector over the past year, with new gigawatt-scale projects and electrolyser production facilities being announced week on week.
100 GW by 2030
“Global pipelines for projects and electrolysers production facilities have seen four-figure growth,” it said, adding global production capacity was likely to be well in excess of 100 GW by 2030.
The companies investing in green hydrogen now would dominate the hydrogen supply for existing ammonia and oil-refining sectors by 2035, with overall demand estimated at 73m tonnes by 2050, it said.
Hydrogen-based pilot projects were underway in industries like steelmaking and cement production, with commercial scale production expected to come from 2024.
In transport, a 22% penetration of green hydrogen was expected in light commercial vehicles and 95% for heavy-duty trucking by mid-century, with an overall demand of 47m tonnes globally, said the study.
In heating and power supply, “renewable electricity will be the primary victor”, it added.
The EU is looking to green hydrogen as one of the key planks of the region’s transition to renewables.
SOURCE Montel
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