The cost of producing hydrogen gas with renewables is likely to plummet in the coming decades, making one of the most radical technologies for reducing greenhouse gases economical.
BNEF looked at how to generate hydrogen from renewable sources such as wind turbines and solar panels. It also examined how the gas that’s produced can be stored to provide energy at times when the wind doesn’t blow and the sun doesn’t shine.
Renewable hydrogen costs may fall to as low as $1.40 a kilogram by 2030 from the current range of $2.50 to $6.80, BNEF said in the report. That could slide further to 80 cents by 2050, equivalent to a natural gas price of $6 per million British thermal units. Gas in New York closed at $2.17 per million Btu on Wednesday. It last traded above $6 in 2014.
The most cost-efficient strategy would be to connect a hydrogen operation directly to both wind and solar energy sources. That would maximize the time the hydrogen plant could run as wind often blows when it’s not sunny and vice versa, according to the report. Countries where the renewable energy is expected to be more expensive, such as Japan, will face higher costs to produce green hydrogen.
Using a “fully optimized” system design, solar and wind can provide power to electrolyzers, which extract hydrogen gas from water, for as little as $24 a megawatt-hour by 2030 and $15 by 2050, according to BNEF.
Political Support
Lawmakers will need to support renewable hydrogen in order to spur advances and growth of electrolyzers in the years ahead, according to BNEF’s analysis.
About 3 gigawatts of electrolysis projects are currently underway to test new applications of hydrogen according to data from the International Energy Agency. Over the following decades, the amount of total capacity of electrolyzers could skyrocket 1,000 times that amount if a significant demand builds for renewable hydrogen.
Without political support, a hydrogen economy wouldn’t likely develop, leading to a slight rise in electrolyzers by 2050.
Look to China
Chinese manufacturers lead the way in low-cost manufacturing of hydrogen production equipment. Those companies mostly sell domestically and to markets other than Western Europe, Australia and the U.S.
Rising Demand
Many factors would have to come together to develop what BNEF calls a “hydrogen economy.” With government support, technological advances and increased scale, costs would come down and demand would rise.
Between now and 2030, demand would slowly grow from being basically non-existent today. Once costs come down after 2030, that demand would take off over the next couple decades, to reach as much as 275 million metric tons of renewable hydrogen per year by 2050.
Links
- Researchers discover climate-friendly way of extracting hydrogen from oil
- Hydrogen window of opportunity ‘wide open’ as climate crisis intensifies
- Green 'silver bullet': Scientists boast way to extract hydrogen from oil without emitting greenhouse gases
- Germany unveils plan for climate-friendly aviation
- ‘Hydrogen economy’ can help build radical tech that combats greenhouse gases
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