cost parity with blue hydrogen realistic from 2030

Study by Aurora Energy Research: In 2030, green hydrogen from electrolysers can be produced in individual European countries for around 3 euros per kilogram and is thus in the range of the costs of conventionally produced hydrogen. In contrast, the widely propagated cost target of 2 euros per kilogram will not be reached in Europe until around 2050.
Norway will have the lowest electrolysis costs in the 2030s, followed by Spain and the UK. Germany is one of the most expensive of the countries considered. Here, cost parity with blue hydrogen will not be achieved until the mid-2030s.
Across Europe, electrolysers that are directly coupled to onshore wind and photovoltaic systems achieve the lowest production costs of green hydrogen. In Germany, an additional connection of the electrolyser to the power grid and its flexible operation is the cheapest.

Aurora Energy Research analyzed the cost of producing hydrogen from electrolyzers across four different business models for eight European countries. Key result: Green hydrogen can be produced in some European countries for around 3 euros per kilo in 2030, thus achieving cost parity with blue hydrogen, which is produced from natural gas and the carbon dioxide released is stored. Nevertheless, the costs are still well above the 2 euros that many previous studies predicted and which are decisive in terms of competitiveness with gray hydrogen, the production of which from fossil raw materials does not capture the carbon dioxide. A comparison of different business models shows that the optimal solution differs from country to country and even from region to region. The cheapest production of green hydrogen in Europe is achieved in countries such as Norway, Spain and the UK by coupling an electrolyser to wind power and photovoltaic systems directly on site. The ideal business model is to optimize capacity utilization through flexible adaptation to the respective wind and solar power generation. Among the countries considered, Germany is one of those with the highest hydrogen production costs. The cheapest in this country are grid-connected electrolysers, which are operated flexibly and thus optimize their production in order to avoid periods of high electricity costs and reduce operating costs. Due to high connection and network fees, this hydrogen will only reach cost parity with blue hydrogen in Germany in the mid-2030s. 2 euros per kilo of hydrogen in Europe is only feasible under very optimistic cost assumptions Aurora Energy Research has also modeled what would be needed to achieve hydrogen production costs of 2 euros per kilo: With an electrolyzer utilization of 50 percent, this would require average electricity costs of 10 euros per megawatt hour - however, the assumption of such low electricity costs is in the coming years unrealistic. Targeted support from governments is therefore needed in the 2020s to promote the development of a green hydrogen economy and reduce costs. A summary of the study can be found at https://auroraer.com/media/green-hydrogen-production-at-2-eur-kg-in-europe/ About Aurora Energy Research Aurora Energy Research is a specialist in analysis and modeling of the European and global energy markets. Founded in 2013 by economists at the University of Oxford to meet the increasing need for high-quality data and facts on the energy market, we are now, among other things, the largest provider of electricity market analyzes in Europe. With more than 170 energy experts and offices in Berlin, Oxford, Sydney and the USA, we support companies, governments and institutions along the entire value chain in making long-term strategic decisions. For more information, visit www.auroraer.com/

Green Hydrogen: Production Costs in Europe Will Only Drop to 2 Euros Per Kilo in 2050