Green hydrogen will be competitive with gray hydrogen starting in 2030 and with blue hydrogen in 2028 using Chinese electrolyzers.
Spain will be one of the countries where green hydrogen will be produced most cheaply in the future. According to Bloomberg New Energy Finance (BNEF), the cost of producing green hydrogen in Spain and four other countries (China, Brazil, India, and Sweden) will be lower than the cost of producing grey hydrogen using gas in existing plants by 2030.
These five countries will be the first in the world to achieve the lowest costs for producing green hydrogen, i.e., renewable-sourced hydrogen.
Bloomberg’s report indicates that in 2023, the cost of green hydrogen projects is increasing compared to the previous year. Inflation, higher financing costs in some markets, and longer construction times are the main reasons for this increase.
Nevertheless, these five countries, including Spain due to its higher level of renewable integration, will manage to match the current grey hydrogen within the next seven years.
And the vast majority will achieve this before 2035. According to the report, green H2 will undercut new grey H2 in over 90% of the markets by that year.
Comparison to blue hydrogen
If the comparison is made with blue hydrogen, the data is also positive. The drops in natural gas prices mean that blue H2 remains the most competitive low-carbon option at present.
It is worth remembering that blue H2 is the same as grey H2, where methane is extracted, but instead of releasing it into the atmosphere, CO2 is captured and stored underground to avoid greenhouse effects.
The average normalized cost of blue hydrogen is 59% cheaper than green hydrogen for projects financed in 2023, due to a decline in future gas prices since its update in the second half of 2022.
However, green H2 now outperforms blue H2 by 1-3 years in all modeled markets. Green hydrogen is cheaper than the new blue option by 2028, using Chinese alkaline electrolyzers, and by 2033, using Western electrolyzers.
In summary, by 2030, the cheapest hydrogen will be produced in Brazil, using onshore wind energy and electrolyzers manufactured in a Western country. This is great news, with a cost of just 1.47 dollars per kilogram.
SOURCE: elperiodicodelaenergia.com
Read the most up to date Fuel Cell and Hydrogen Industry news at FuelCellsWorks
