Green hydrogen, the one produced with renewable electricity and through electrolysis, could compete with fossil fuels by 2030, according to a report by the International Renewable Energy Agency (IRENA).
The report highlights that, a combination of falling costs in renewable energy assets (solar and wind) plus a drop in costs of electrolysers would make that scenario possible. In fact, the report by IRENA draws alternatives by which electrolyzing facilities could drop cost.
As we have reported previously, green hydrogen represents a clear path for energy transition efforts, as it reaches industry sectors that renewables hardly could; like steel and cement manufacturing, long-haul transportation or shipping.
Solutions like carbon capture and storage are also pushing this trend; however, the design of this technologies, the scale and the costs of it are still major barriers for it to become massively affordable.
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Findings by IRENA for cost reduction
In this regard, Francesco La Camera, General Director of IRENA, said: “Renewable hydrogen can be a game-changer in global efforts to decarbonize our economies. Levelling the playing field to close the cost gap between fossil fuels and green hydrogen is necessary. Cost-competitive green hydrogen can help us build a resilient energy system that thrives on modern technologies and embraces innovative solutions fit for the 21st century.”
According to IRENA’s report, the production cost of green hydrogen is 2 or 3 times more than its blue hydrogen alternative, produced by fossil fuels and carbon capture technologies; also, it is determined by the cost of electrolysers and its operative hours. That’s why is imperative for the industry to drop electrolysers costs to make this commodity competitive.
Among IRENA’s findings are: by increasing the capacity of an electrolyser facility from the typical 1 MW capacity to 20 MW, the cost should be reduced by a third. Also, implementing automated processes in gigawatt-scale manufacturing facilities can achieve significant cost reduction.
Also, the design and operation of electrolysis systems can be optimized for specific applications in different industries. “Based on historic cost declines for solar photovoltaics (PV); the learning rates for fuel cells and electrolysers could reach values between 16% and 21%,” the report concludes.