Can the Middle East open the door to affordable clean hydrogen?

Image: Ghadir Shaar

A report by the International Renewable Energy Agency (IRENA) has suggested affordable green hydrogen could already be obtainable, based on the record-breaking low prices for solar negotiated in the Middle East.

Solar electricity tariffs of $0.0157, $0.0135 and $0.0104 per kilowatt-hour agreed in Qatar, the United Arab Emirates and Saudi Arabia, respectively, in the last 18 months, would enable renewables-powered hydrogen to be produced for as little as $1.62 per kilogram, according to IRENA's Renewable Power Generation Costs in 2020 report.

The Abu Dhabi-based international body made its calculations – all of which are in U.S. dollars – based on the $0.0104 solar power tariff agreed in Saudi Arabia in April, with green hydrogen generation being modeled at the Dumat al Jandal site in the kingdom which boasts strong solar and wind power resources. With the site already hosting a wind farm, IRENA modeled a hydrogen plant which would also harness solar and be connected to the grid. The report suggested lack of a grid connection would raise the renewable hydrogen cost to $1.74/kg, which still compares favorably to the current $1.45-2.40/kg price of hydrogen production powered by natural gas and equipped with carbon capture and storage (CCS) tech.

Further extrapolating the costs, the study estimated a fall in hydrogen electrolyzer costs, from $750 per kilowatt of capacity to $350, would enable renewable hydrogen production for $1.16/kg. Raising electrolyzer efficiency to 72.5% and extending stack lifetime from 15 to 17.5 on top of that, IRENA said, could take green hydrogen below the prized $1/kg point.

With this year's renewables price report explaining how the three tariffs secured in the Middle East since January 2020 can be regarded as viable without any hidden caveats or subsidy, the authors of the study stated: “low-cost renewable hydrogen may already be in reach.”

The document fleshed out how up to 800 GW of coal-fired power generation capacity worldwide could already be replaced by newly-built renewable energy facilities as solar and wind prices have dipped under the cost of running legacy fossil fuel plants in many markets. That estimate included a $5/MWh cost of integrating renewables into the electric grid and IRENA said, with around 40% of that overpriced capacity – and 37% of actual generation – based in Bulgaria, Germany, India and the United States, decommissioning could save around $32 billion per year in energy costs. Making the switch would also eliminate three gigatons of carbon emissions – 20% of what IRENA estimates is needed to keep global heating to a maximum 1.5 degrees Celsius this century.

The data

The latest edition of the report is based on data from around 20,000 renewables generation facilities worldwide which account for 1.9 TW of generation capacity, and on clean energy auction prices and power purchase agreements which add up to 582 GW of capacity. All the figures in the study exclude any form of subsidy and the authors point out, adding CCS to the world's overpriced coal plants would merely drive up their costs further.

IRENA has estimated all of Bulgaria and Germany‘s coal plants will this year cost electricity bill payers more than new renewables facilities would, based on a European carbon emissions price of €50 per ton. Even without an emissions trading scheme in the U.S. and India, the picture is similar, with 77-91% of American coal plants and 87-91% of Indian facilities also overpriced.

That conclusion is based on an estimated levelized cost of energy (LCOE) for solar power in India this year of $0.033/kWh, down from $0.038 last year; and of $0.031 in the States this year, although the report's authors note the solar module price has picked up between 1% and 9% in the first quarter of this year, thanks to shortages of raw materials such as polysilicon.

With the global LCOE of solar having fallen 7% from 2019 to last year, from $0.061 to $0.057/kWh, India led the world for low-price PV last year, with an average LCOE of $0.038/kWh for utility scale generation, ahead of China, with $0.044, and Spain, with $0.046. The authors noted Turkey also rapidly reduced average solar tariffs, to $0.052 last year, and Australia posted an average $0.057.

That translated into average solar project development costs of $596 per kilowatt installed in India, the world's lowest figure and down 8% from Indian costs in 2019. Solar projects in Vietnam came in to $949/kW and were only $796/kW in Spain last year, the report added. At the other end of the scale, projects in Russia cost $1,889/kW and, in Japan, $1,832, with those two countries exceptional among the 19 markets studied as the cost differences between areas from Canada (at $1,275/kW) down to India, were more evenly distributed.

Auction results posted last year, for projects expected to be commissioned this year and next, prompted IRENA to estimate the global average solar power price will fall to $0.039/kWh this year before rising slightly to $0.04 next year, which would still be a 30% fall on this year's figure and 27% less than the LCOE to be expected from new-build coal plants. With the predictions based on 18.8 GW of renewables capacity expected this year and 26.7 GW due in 2022, the study estimated 74% of the clean energy facilities expected this year and next will be cheaper than new fossil fuel generation sites.

Cheaper

Renewables are already making real headway, of course, with IRENA calculating 45.5 GW of the solar added last year was among the 62% of the 162 GW of clean energy facilities which were installed more cheaply than new-build coal plants.

Digging into the solar statistics, the report said mainstream solar panel costs in December ranged from $0.19 to $0.40 per Watt, for an average price of $0.27, with thin-film products averaging $0.28/W.

Operations and maintenance costs came in at an average of $17.80/kW last year in OECD countries and $9 elsewhere, in a year which also saw non-panel, balance-of-system equipment costs account for 65% of total project expense.

For residential solar arrays, average system prices in the 19 markets studied by IRENA ranged from $658/kW in India to $4,236 in California, for LCOE figures from $0.055/kWh in India to $0.236 in the U.K. For commercial systems, India was again the cheapest place to invest last year, at an average $651/kW, but a business in California would have to find $2,974/kW. Those system costs translated into LCOE numbers ranging between $0.055 in India and $0.19 in Massachusetts.

This article originally appeared on pv-magazine-usa.com, and has been republished with permission by pv magazine (www.pv-magazine.com and www.pv-magazine-usa.com).

A rendering of the project to produce green hydrogen that Gransolar is planning for the Port of Almería.

Image: Gransolar

A company spokesperson told pv magazine that the plant will produce hydrogen from seawater and will be powered by a 30 MW solar plant and a 20 MWh storage system with an autonomy of 4 hours.

The facility will be based on double-reverse osmosis treatment with energy recovery followed by electrolysis of deionized water through proton exchange membrane (PEM). Furthermore, secondary electrolysis of concentrated brine will be implemented by cell membrane electrolysis.

The main electrolyzer at the facility will have an installed capacity of 20 MW and an estimated production of 1,000 tons per year. The produced fuel will be then stored in trucks for pressurized gas at 400 bar pressure.

Hydrogen will be used as fuel for public transport at the port and urban cleaning vehicles in the city of Almería. It will also be utilized to feed the port's unloading machinery, the national and international transport of goods, and part of the energy demand of local manufacturing industries.

The project has a required investment of €80.5 million euros and is scheduled to be built by the end of 2024. Gransolar confirms that it has the interest and commitment of the Almería City Council, as well as multiple companies from different professional sectors, without providing further details.

Almería will not be the only Andalusian port with plans to produce hydrogen. The Port of Malaga is also expected to host green hydrogen production through a project that also contemplates the use of artificial intelligence.

This article originally appeared on pv-magazine-usa.com, and has been republished with permission by pv magazine (www.pv-magazine.com and www.pv-magazine-usa.com)

A hydrogen bus developed by Poland-based Solaris Bus & Coach.

Image: Solaris Bus & Coach

U.S. trading company Tramo, Vienna-based Austria Energy Group and Austrian renewable energy developer Oekowind have signed a memorandum of understanding for the production of a hydrogen/green ammonia plant to be developed in Chile with an estimated annual production capacity of 1 million tons of green ammonia. This project, in Chile, will be one of the first to commercialize green ammonia. It will be based on a 2 GW wind farm.

A team of researchers at the Research Center for Energy Networks and Energy Storage (FENES) of the East Bavarian Technical University (OTH) Regensburg, led by Professor Michael Sterner, is developing a hydrogen atlas for Germany. The interactive, continuously updated database will show which power-to-X plants are installed, indicating also related regional value chains. The project will be built gradually. The final version should be available in 2023. “The hydrogen atlas offers users the opportunity to assess potential, consumption, costs and emission reductions on a regional level,” Sterner explains. “This provides them with a comprehensive tool that facilitates entry into concrete technical planning.”

Canadian integrated energy company Suncor and Canadian holding company ATCO are looking into a potential “world scale clean hydrogen project” in Alberta. The decision follows support messages from the government of Canada and the government of Alberta, both in favor of emission-reduction projects. “Approximately 20% of the produced clean hydrogen could be used in the Alberta natural gas grid to further reduce emissions,” read a note released on Tuesday, adding that the majority would be used in refining processes and co-generation of steam and electricity at the Suncor Edmonton Refinery. The project should produce more than 300,000 tonnes per year of clean hydrogen.

Japanese petroleum company Eneos and Japanese multinational automotive manufacturer Toyota Motor are exploring hydrogen applications at Woven City, a prototype city in Susono City, Shizuoka prefecture. Eneos should establish a hydrogen refueling station and produce green hydrogen. The two companies are also interested in conducting joint advanced research on hydrogen supply. “At Woven City, they intend to promote carbon neutrality in everyday mobility, people's lives, and within the infrastructure of the city itself,” read a statement released on Monday.

Japanese transport company Mitsui O.S.K. Lines (MOL) and Mitsui E&S Machinery are carrying out a joint study to introduce hydrogen fuel port cargo handling machinery. As part of the agreement, MOL signed a “contract for a new, near-zero emission, rubber-tired gantry container yard crane, and decided to introduce it at the MOL-operated Kobe International Container Terminal.”

Professor Kondo-Francois Aguey-Zinsou, who leads the Hydrogen Energy Research Centre (HERC) at the University of New South Wales (UNSW), said that Australia is at the cutting edge of the hydrogen revolution and will increasingly collaborate with other countries. The comment came at the launch of a new hydrogen advisory firm called H2Potential, which will act as an incubator and an accelerator of hydrogen businesses. In collaboration with LAVO, Aguey-Zinsou helped produce the world’s first residential/commercial hydrogen battery, which stores 40 kWh of energy. That’s almost three times the capacity of a Tesla Powerwall 2, which offers 13.5 kWh.

An international alliance of 45 companies, knowledge institutes and port authorities, headed by the Port of Rotterdam Authority, has been awarded nearly €25 million in EU funding, wrote the Port of Rotterdam on Tuesday. “The consortium will be using this grant to execute ten pilot projects and demonstration projects that focus on sustainable and smart logistics in port operations,” read the note, adding that many details are not yet clear. Anyhow, the Port of Rotterdam explicitly mentioned green hydrogen among the potential renewable fuels and energy carriers.

Germany confirmed its interest in funding hydrogen, with both Länder and the federal state looking into projects that could allow the country to become a “global technology supplier.” An example is the hydrogen hub planned in Huntorf by Oldenburg-based energy, telecommunications and information technology company EWE and Dusseldorf-headquartered energy company Uniper. “Green hydrogen is an indispensable building block for the energy transition. That's why we are funding five innovative research projects across Lower Saxony with a total of €6 million. Here in Huntorf, the DLR Institute for Networked Energy Systems and Clausthal University of Technology are now using the compressed air storage power plant to investigate the potential of using green hydrogen in thermal processes,” Lower Saxony's minister for science and culture, Björn Thümler, commented in a note released on Monday.

Poland-based Solaris Bus & Coach has sold 13 hydrogen vehicles to Frankfurt. The buses are to be deployed on target routes in 2022. “The technology used in the Urbino hydrogen [bus] makes for absolutely environmentally friendly transport, thanks to the use of energy supplied by a fuel cell (of 70 kW),” read a note released last week. Earlier this year, the company signed deals for hydrogen buses with companies based in Germany, Italy, Austria and the Netherlands.

This article originally appeared on pv-magazine-usa.com, and has been republished with permission by pv magazine (www.pv-magazine.com and www.pv-magazine-usa.com).

First Solar

First Solar and Nel Hydrogen Electrolyser, a division of Nel ASA, a supplier of hydrogen technology, said they will develop integrated photovoltaic/hydrogen power plants.

First Solar and Nel will initially collaborate to develop an integrated power plant control and Supervisory Control and Data Acquisition (SCADA) system. The development of this network architecture is critical to enable optimisation of PV-electrolyser hybrid projects, resulting in low total cost of hydrogen and electricity. After that, the two will explore  ways of optimising and integrating technology throughout the solar and hydrogen production plant.

In statements, both companies stressed their desire to deliver the lowest total cost of solar to hydrogen possible. Both also noted that First Solar’s low-carbon production of its cadmium-telluride modules was significant for keeping emissions low.

Because the partnership is so recent in nature, no project timelines have been released as of yet.

This article originally appeared on pv-magazine-usa.com, and has been republished with permission by pv magazine (www.pv-magazine.com and www.pv-magazine-usa.com).

The site where the new salt cavern is being built.

Image: EWE

German energy provider EWE has started the construction of a cavern for hydrogen storage in Rüdersdorf, near Berlin.

The cavern storage facility will have a capacity of 500 cubic meters, which corresponds to the volume of a single-family house. The company is working with the German Aerospace Center (DLR) on this project.

The DLR Institute for Networked Energy Systems will examine, among other things, the quality of the hydrogen during storage and after it has been extracted from the cavern.

In the first stage of the project, EWE will build a derrick on an existing borehole and this work is expected to take a week. The utility will then install and cement a steel pipe from the surface to a depth of 1,000 meters by the beginning of April. This will connect the pilot cavern with the earth's surface.  

“In the context of the research project, we particularly hope to gain knowledge of the degree of purity of the hydrogen after it has been withdrawn from the cavern,” said EWE project manager Hayo Seeba. This factor is crucial for the use of hydrogen in the mobility sector.

The knowledge that the small pilot cavern will provide should be easily transferable to caverns with a volume that is 1,000 times higher, the company went on to say. The aim is to use caverns with a volume of 500,000 cubic meters for large scale hydrogen storage in the future.

EWE owns 37 salt caverns that represent 15% of all German cavern storage facilities that could be suitable for storing hydrogen in the future. “This would mean that large quantities of green hydrogen generated from renewable energies could be stored and used as required and would become an indispensable component in order to achieve set climate targets,” Seeba added. 

Scientists at Germany’s Jülich Institute for Energy and Climate Research (IEK-3) recently revealed that Europe has the potential to inject hydrogen in bedded salt deposits and salt domes with a total energy storage capacity of 84.8 PWh. Most of these salt caverns are concentrated in northern Europe, at offshore and onshore locations. Germany accounts for the largest share, followed by the Netherlands, the United Kingdom, Norway, Denmark, and Poland. Other potential sites are in Romania, France, Spain, and Portugal.

“Germany has the highest storage potential in both onshore and offshore contexts,” the group said.

This article originally appeared on pv-magazine-usa.com, and has been republished with permission by pv magazine (www.pv-magazine.com and www.pv-magazine-usa.com)

The world already has a nascent hydrogen economy, according to IEEFA.

Image: Roy Luck/Flickr

The Institute for Energy Economics and Financial Analysis (IEEFA) estimates there are 50 green hydrogen projects under development worldwide. Those projects, have a planned annual production capacity of 4 million tons of hydrogen and a total renewable power capacity of 50 GW, according to the Ohio-based thinktank, with their combined capital cost estimated at $75 billion.

In its Asia, Australia and Europe Leading Emerging Green Hydrogen Economy, but Project Delays Likely study, IEEFA said the projects announced represent an embryonic global green hydrogen economy.

“Most of these 50 projects are at an early stage, with just 14 having started construction and 34 at a study or memorandum-of-understanding stage,” the report noted. “However, many of the 50 newly-announced green hydrogen projects could face delays due to uncertain financing, cumbersome joint venture structures and unfavorable seaborne-trade economics.”

The study stated the majority of the projects announced will begin commercial operation in the middle of the decade, with large scale facilities starting up in 2022-23 and 2025-26.

The report’s authors said the hydrogen strategies of China, Japan and South Korea appear to prioritize hydrogen generated using natural gas – designated grey hydrogen, or blue if facilities are intended to feature carbon capture technology – rather than ‘green’ hydrogen generated using renewable energy. IEEFA described the €430 billion ($507 billion) hydrogen strategy of the European Union as the the most ambitious and purposeful energy transition policy to date.

“The EU’s hydrogen capex [capital expenditure] commitment far outweighs the commitment from Korea and Japan, reflecting the EU’s ambition to remodel its energy system and vertically integrate the hydrogen value chain with wind and solar power, electrolysis, distribution and applications,” stated the report.

Annual green hydrogen demand could reach 8.7 million tonnes by 2030, according to the IEEFA study, prompting a big supply shortfall given the current capacity of the project pipeline.

The report lists all publicized projects, including five facilities announced in the last two months – an 85 MW Nikola Motor Company plant in the U.S.; a 4 GW facility in Saudi Arabia planned by Air Products, Acwa Power and Neom; a 20 MW electrolyser being developed by U.S. energy company NextEra; a 100 MW solar park, storage facility and hydrogen production site in Puertollano, central Spain, by Iberdrola; and a 30 MW electrolyzer project by German consortium WestKüste100.

“There remains ample room for more hydrogen projects to meet global demand and further policy support will be necessary to grow this nascent industry,” added the report’s authors.

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Early this year Adani announced his company’s goal to become the world’s largest solar power company by 2025 and the largest renewable power company by 2030.

Image: Life tech/Flickr

Covid-19 presents an opportunity to pause, rethink, and design a new and faster transition to a cleaner energy future, said Adani Group chairman Gautam Adani recently in his LinkedIn post.

“The [clean energy] transition could lead to investment opportunities of US$ 19 trillion in solar, wind, battery storage, green Hydrogen, carbon management and energy efficiency by 2050, making it one of the largest global industries”—Adani quoted a recent forecast by the International Renewable Energy Agency (IRENA).

“Employment in the clean energy sector, currently at 12 million in 2020, could quadruple by 2050, while jobs in energy efficiency and system flexibility could grow by another 40 million.”

Adani believes India, in particular, is well-positioned to benefit from the transition as it is naturally endowed with very high levels of solar resources, and the long coastline makes an attractive proposition for wind power.

Falling solar prices in favour

With technology driving prices down, renewables would supplement fossil fuels in the short term and emerge as the favoured option in the long term.

Adani quoted an MIT research paper to share that the price of solar modules has dropped 99% over the past 40 years. Going by the trend, he expects prices to drop by an additional 99% over the next 40 years – probably reducing the marginal cost of electricity to zero.

“Such a reduction, in turn, will mean the coexistence of two business models – one based on fossil fuels and the other driven by renewables – both supplementing each other in the near future but the pendulum swinging decidedly in favour of renewables in the long-term,” he wrote.

Adani said many of the [power] system operators in Europe, faced with falling [electricity] demand, are learning to manage grids at a remarkably high level of renewables in the energy mix, often up to 70%.

“While the generation balance may swing back as [electricity] demand increases, the crisis has provided insights to operators on keeping the grid stable with high levels of renewable penetration. Post Covid-19, this may be the new norm,” he said.

Hydrogen storage, a potential game changer

With increasing investor confidence in solar and wind, their integration with various storage technologies will further accelerate the energy transition, said Adani, highlighting hydrogen as the predominant storage technology on the horizon.

“With the prospect of the future marginal cost of renewable energy dropping precipitously, green Hydrogen produced by the splitting water could be the game-changer.

“This Hydrogen could use much of the existing gas pipeline network for distribution, be blended with natural gas and be a green feedstock for the chemical industry. Add to this the fact that the energy density of a kilogram of Hydrogen is almost three times that of gasoline, and you have a momentum that would be near impossible to stop as Hydrogen fuel cell vehicle prices come down,” he said.

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This article originally appeared on pv-magazine-india.com, and has been republished with permission by pv magazine (www.pv-magazine.com and www.pv-magazine-india.com.)

Plan for storing hydrogen in Utah salt caverns

Images: Los Angeles Department of Water and Power

Seasonal storage of hydrogen to balance renewable generation will be cost-competitive in 2050, says DNV GL, a Norway-based consulting firm that advises the energy and shipping industries.

The firm modeled nonstop production of hydrogen every summer, using electrolysis units powered by market electricity. The hydrogen would be compressed and stored underground in salt caverns or depleted gas fields, and the following winter would be converted nonstop to electricity, using fuel cells. Daily balancing would be achieved using batteries and pumped hydro. To the extent the entire grid ran on renewables in the summer, the hydrogen would be “green,” or renewably produced.

A project along these lines is under development in Utah, and would use underground salt caverns to store hydrogen. The hydrogen would be renewably produced by 2045, to help Los Angeles achieve its renewables goal.

The DNV GL study also considered hydrogen produced on another continent using solar power, stored either as-is, or after conversion to ammonia or synthetic methane, and shipped to its destination each winter. These options (bars 3 to 5 below) have costs more than double that of locally produced hydrogen (bar 6), as they involve more steps, each with its own costs. All options were compared to wintertime combustion of natural gas with a carbon tax, pegged at 54 euros per metric ton of carbon dioxide (bar 1).

DNV GL projects that a seasonal storage business will be preceded by a market for synthetic fuels. This is the case in the Utah hydrogen storage project, where plans for the early project years call for hydrogen to be mixed with natural gas for combustion in gas turbines.

DNV GL also projects that in 2050, ample short-term storage capacity will be available, in the form of grid batteries, electric vehicle-to-grid applications, and pumped hydro, “to accommodate daily and weekly cycles” in both renewable generation and electricity demand.

DNV GL’s report, The promise of seasonal storage, includes an appendix showing capital and operating costs for all technologies evaluated.

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This article originally appeared on pv-magazine-usa.com, and has been republished with permission by pv magazine (www.pv-magazine.com and www.pv-magazine-usa.com).

The project will be the first hydrogen injection experience in a real gas network in Spain with support for small-scale electrical storage, and will be carried out at the Enagás regasification plant in Cartagena.

Image: Enagás

Gas multinational Enagás and Ampere Energy, a Spain-based battery provider, have signed an agreement to begin joint production of hydrogen with solar power and energy stored in batteries.

The two companies will jointly work on several R&D projects to produce renewable hydrogen for self-consumption at the gas plant.

The project they are now planning will be the first hydrogen injection experience into a gas network in Spain, with small-scale storage as a back-up. It will be carried out at the regasification plant that Enagás operates in Cartagena, in the southern province of Murcia.

Ampere Energy has installed its Ampere Energy Square S 6.5 equipment at the Cartagena plant, which will have new storage and intelligent energy management solutions.

The installed equipment will allow Enagás to maximize the energy efficiency of the Cartagena gasification plant and reduce the environmental impact and its electricity bill up to 70%, according to the two companies.

The battery will store energy coming from both the photovoltaic system and the power grid, and will monitor this energy. Through machine learning algorithms and data analysis tools, the system will anticipate the consumption patterns of the plant, predict the available solar resource, and track prices in the electricity market, identifying the moments in which the cost is lower.

“This alliance opens the door to a long-term pact between Ampere Energy and Enagás to undertake joint R&D projects for energy storage and services,” both companies added.

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This article originally appeared on pv-magazine-usa.com, and has been republished with permission by pv magazine (www.pv-magazine.com and www.pv-magazine-usa.com).

Green hydrogen can be produced through electrolysis from any low-cost energy source.

Image: Siemens

Hydrogen cost competitiveness is closer than previously thought and scaling up existing hydrogen technologies will deliver competitive low-carbon solutions across a wide range of applications by 2030, finds a new report published by Hydrogen Council. Yet, to reach this scale, there is a need for investment, policy alignment, and demand creation.

As scale-up of hydrogen production, distribution, as well as of equipment and component manufacturing continues, cost is projected to decrease by up to 50% by 2030 for a wide range of applications, making hydrogen competitive with other low-carbon alternatives and, in some cases, even conventional option, finds the report prepared by global consultancy McKinsey. To deliver on this opportunity, supporting policies will be required in key geographies, including Australia, together with investment support of around US$70 billion.

“Based on real cost data from the industry, the analysis shows that a number of hydrogen solutions can become competitive until 2030 already.” says Bernd Heid, Senior Partner at McKinsey & Company. “Out of 35 use cases analysed, at-scale hydrogen can be the lowest cost low-carbon solution in 22 use cases – such as in the steel industry and heating for existing buildings. And it can beat fossil-based solutions at scale in 9 use cases – for example in heavy-duty transport and trains.”

2030 promise

Strong fall in the cost of producing low carbon and renewable hydrogen is one of the main drivers of this cost trajectory and hydrogen produced via electrolysis is identified as one of the areas where investment until 2030 would make the biggest difference. According to the report, achieving competitive renewable hydrogen from electrolysis will require the deployment of aggregated 70 GW of electrolyzer capacity, with an implied cumulative funding gap with grey production of $US20 billion.

In an earlier analysis, Wood Mackenzie also identified 2030 as the year when green hydrogen, produced primarily by solar electrolysis, would reach cost parity. According to the consultancy, renewables hydrogen could reach parity in Australia, Germany, and Japan by 2030, based on US$30/MWh renewable electricity and 50% utilization hours for electrolyzers.

In production, the cost of low-carbon and/or renewable hydrogen production will fall drastically by up to 60% over the coming decade, the Hydrogen Council report states. This can be attributed to the falling costs of renewable electricity generation, scaling up of electrolyzer manufacturing, and the development of lower-cost carbon storage facilities. Although it identified the same drivers behind falling costs, the International Energy Agency (IEA) was more conservative in its forecast. Its earlier analysis showed that the cost of producing hydrogen from renewable electricity could fall around 30% by 2030.

“2020 marks the beginning of a new era for energy: as the potential for hydrogen to become part of our global energy system becomes a reality, we can expect fewer emissions and improved security and flexibility. This announces the decade of hydrogen,” said Benoît Potier, Chairman and CEO of Air Liquide and Co-chair of the Hydrogen Council. “A clean energy future with hydrogen is closer than we think, because the industry has been working hard on addressing key technology challenges.”

While often touted as the missing link in the energy transition, hydrogen has seen false dawns before. Declaring 2019 a critical year for hydrogen, the IEA said hydrogen was enjoying unprecedented momentum around the world. This was corroborated by the emergence of hydrogen roadmaps and strategies from around the world, which all suggested a large scale and rapid deployment of hydrogen technologies is expected from around 2030 onwards.

In Australia, state and federal energy ministers have given a tick of approval to the National Hydrogen Strategy prepared by chief scientist Alan Finkel and voiced support for a $370 million fund for green hydrogen projects. However, against high expectations of the country’s hydrogen export potential, The Australia Institute’s analysis has suggested that Australia has overhyped the potential demand for hydrogen exports by a factor of up to 11.