Energy

Hydrogen projects worth $300 billion are dropping green H2 prices fast

Hydrogen projects worth $300 b...
Key hydrogen projects that have been announced globally
Key hydrogen projects that have been announced globally
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Key hydrogen projects that have been announced globally
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Key hydrogen projects that have been announced globally
Green hydrogen production prices are dropping faster than previously expected, with optimal operations beginning to achieve price parity by 2030 even without carbon taxes on gray hydrogen
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Green hydrogen production prices are dropping faster than previously expected, with optimal operations beginning to achieve price parity by 2030 even without carbon taxes on gray hydrogen

A new Hydrogen Council report sheds some light on hydrogen's rise as a green fuel source. More than 30 countries now have a national H2 strategy and budget in place, and there are 228 projects in the pipeline on both the production and usage sides.

Europe is leading the way, with 126 projects announced to date, followed by Asia with 46, Oceania with 24 and North America with 19. In terms of gigawatt-scale H2 production projects, there are 17 projects planned, with the largest in Europe, Australia, the Middle East and Chile.

Overall, projects seem fairly well balanced between hydrogen production and end-use applications, with a smaller number focusing on distribution. European projects are balanced between production and usage initiatives, while Korea and Japan are developing much more on the usage side, for both transport and industrial applications. Australia and the Middle East are more active on the supply side, working to position themselves as hydrogen exporters.

The majority of these projects – some 75 percent, it should be noted – have been announced but do not yet have funding committed. This figure includes budgets committed by governments for spending, for which no project has yet been identified. Only US$45 billion worth of projects are at the "mature" stage, having reached the feasibility study or engineering and design stage, and $38 billion are at the "realized" stage, with a final investment decision made, construction started, or already operational.

Hydrogen production projections for 2030 have leapt up in the last year. The previous report estimated that 2.3 million tons will be produced annually by 2030, and this report revises that figure up to 6.7 million tons. To put that another way, two-thirds of the global hydrogen production expected to be operational in 2030 has been announced in the last year.

Government decarbonization initiatives are a huge driving force behind the hydrogen wave, with some $70 billion committed globally. Carbon pricing is helping, with some 80 percent of global GDP covered by some kind of CO2 pricing mechanism.

Japan and Korea, as you'd expect, are leading the charge on fuel cell vehicles, and globally the report projects some 4.5 million FCVs on the road by 2030, with 10,500 hydrogen fuel stations targeted to meet that demand.

Green hydrogen production prices are dropping faster than previously expected, with optimal operations beginning to achieve price parity by 2030 even without carbon taxes on gray hydrogen
Green hydrogen production prices are dropping faster than previously expected, with optimal operations beginning to achieve price parity by 2030 even without carbon taxes on gray hydrogen

There's good news too in terms of production costs, with prices for green, renewable hydrogen falling faster than expected. Partially, this is because electrolyzer supply chains are ramping up faster than expected, bringing the price of electrolyzers down 30-50 percent lower than anticipated. Other factors include a declining cost of energy, with renewable energy costs revised down by 15 percent, and green hydrogen production companies figuring out their mix of renewable inputs more effectively to keep the hydrolyzers up and running longer.

So while "gray" hydrogen costs are expected to remain stable at around $1.59 per kg, green hydrogen is expected to drop from its current price around $4-$5.50 per kilogram to hit an average of $1.50 by 2050, with green supply potentially becoming cheaper than gray hydrogen in optimal areas as soon as 2030. Low-carbon hydrogen production will start coming online around 2025, with prices sitting roughly between the two. Adding carbon taxes to the gray production could bring green hydrogen to price parity by 2030.

Hydrogen transport is going to become a big deal, with major demand centers likely to look at imports. The cheapest way to do it for short to medium distances is through retrofitted pipelines, provided you've got a guaranteed demand to fill. If demand fluctuates, trucks become more attractive. For longer distances, some routes have undersea pipelines that could be used, but much of the rest will have to be done using ships, which will add around $1-2 to the cost per kilogram.

Long-range overland pipelines also look like an interesting opportunity, with the report pointing out that hydrogen pipelines can transport 10 times more energy than a long-distance electricity transmission line at one eighth the cost. And existing pipelines can be retrofitted to handle hydrogen to vastly reduce the cost of pipeline projects.

The report makes further long-term projections for hydrogen vehicles, trucks, ships and aircraft. In aviation, the report projects hydrogen will become a cost-effective way to de-carbonize short and medium range flights (sub-10,000 km, or 6.200 mi) by around 2040, but there'll need to be significant advances in storage to make it practical for longer range flights.

The report should not be taken as gospel, having been written by the H2 industry itself, but it makes for some interesting reading if you're interested in the development of the clean energy economy.

Source: Hydrogen Council

9 comments
9 comments
Worzel
Anything that reduces pollution in cities and the environment as a whole, must be good for all life on the planet. However, CO2 is not a pollutant, despite the propaganda, it's an essential component for all life. Thankfully, tinkering with the miniscule amount produced by human activity, (40ppm) will have little or no effect. Reducing atmospheric CO2 in general would be very dangerous. Using 'green' electricity, to produce hydrogen, is one way to store it, without the relatively high cost of batteries, and also allows transportation, to places where there's no electrical grid, which is definitely beneficial.
FB36
Hydrogen as fuel maybe "green" but it is also extremely dangerous!
Hydrogen is explosive! See videos of Hindenburg & Challenger disasters for example!
Why not hydrogen car companies do some collision tests w/ full gas tanks first (to make their tests really match real world accidents where gas tanks are actually always full & definitely not empty!)?
jerryd
Why would anyone project price in 2050?
Basically H2 is a fraud that because of so many inefficient conversions, for say cars, you need 4x as much/mile vs EVs.
They are depending on cheap excess power and there will be a lot of competition from EVs,, home battery and heat/cold storage, timed use, etc so there will be a floor and curtailment a thing of the past.
TechGazer
I'm just guessing that "hydrogen pipelines can transport 10 times more energy than a long-distance electricity transmission line at one eighth the cost." doesn't take into account the conversion losses, and maybe not the cost of electrolyzers and fuel cells or turbines.

I wonder what the real-life rate of hydrogen leakage and pipe failures (hydrogen embrittlement) would be when using existing natural gas pipelines for hydrogen.
ljaques
If they're going to continue to foist this oxygenated fuel on us (10% alcohol cost me FIFTEEN PERCENT in gas mileage, plus more expensive fuel) at least they can do it economically. And fuel-cell-powered cars can give much longer continuous mileage, if you have a durable enough bladder. ;) Sure, bring on the niche projects that fit the H2 model, but leave automobiles alone. Too much infrastructure has to change for that, and it would keep the price far too high for far too long.
TomorrowWeRide
@FB36
"Hydrogen is explosive! See videos of Hindenburg & Challenger disasters for example!"
Educate yourself.
https://hydrogen.wsu.edu/2017/03/17/so-just-how-dangerous-is-hydrogen-fuel/

"Why not hydrogen car companies do some collision tests w/ full gas tanks first"
Yeah if only they were doing that...
https://www.youtube.com/watch?v=FgLTUbWyEa0
https://www.youtube.com/watch?v=jVeagFmmwA0
skierpage
" 6.7 million tons. To put that another way, two-thirds of the global hydrogen production expected to be operational in 2030 has been announced in the last year."

No, annual dirty hydrogen production is _already_ 70M tons. If this is referring to green hydrogen production, it implies less then 10% of all H2 production will be green by 2030 ☹️. It's a start, but it shows how suspicious it is to create new uses for hydrogen when the Hydrogen Economy hype is so far from switching existing uses to green hydrogen. Leave hydrogen for the parts electrification can't reach, which doesn't include land transportation or space and water heating.
TomLeeM
I think hydrogen fuel cells is a better choice than just battery electric. I think refueling hydrogen tanks would be quicker than charging a battery, and have similar time to refueling a gas car. with only water vapor as the exhaust, I think it is greener than battery electric. I think hydrogen is the future.
Daishi
"Grey Hydrogen is hydrogen produced using fossil fuels such as natural gas. Unfortunately this accounts from roughly 95% of the hydrogen produced in the world today.", So yes Hydrogen today is mostly a product of natural gas and the argument against using it is that you could just use natural gas as fuel now and stave a step rather than making Hydrogen from gas and using hydrogen. We don't need new hydrogen pipelines when natural gas is the material making 95% of it and the pipelines for it are already in place. I'm not "anti green" just pointing out there are valid concerns. I do like hydrogen as a method of grid storage (instead of batteries) to deal with demand offsetting solar panels. I'm hoping that becomes more practical to do as prices drop as seen here.