Can Renewable Hydrogen Beat Grey Hydrogen on Price?
Sourcing low-cost renewable energy and higher capacity factors of renewable technologies are key to cutting the cost of green hydrogen. Lower electrolyser costs are soon expected to contribute to the cost-competitiveness of renewable hydrogen as are impending rises in CO2 costs, according to the conclusions reached at the webinar Reducing the Cost of Renewable Hydrogen
By Jason Deign
Cutting the cost of renewably produced or ‘green’ hydrogen is one of the hottest topics today. Green hydrogen, created through the electrolysis of water using renewable energy, is a key enabler for the energy transition.
But renewable hydrogen is more costly than fossil fuel-based or ‘grey’ hydrogen, created through steam methane reforming (SMR) of natural gas. Grey hydrogen is priced at between €1.50 and €2.50 per kilo, said Javier Brey, president of Spain’s hydrogen association, AeH2, in an Ata Insights webinar in March.
This variation is partly due to the price of gas. But grey hydrogen is still way cheaper than green hydrogen, which in Europe costs around €4.30 per kilo. Economies of scale might bring that figure down to €1 or €2 per kilo by 2030, Brey said. How do we cut the cost now, though?
To a large extent, green hydrogen costs depend on the price of the renewable electricity used to power electrolysis. The quality of the renewable resource, wind or solar, has a big impact on the cost of energy, since greater resources lead to higher yield and lower energy costs over the life of a renewable energy plant.