The 300MW Sakaka solar farm in
Saudi Arabia.
Photo: ACWA Power
Green hydrogen now cheaper than
blue in Middle East, but still way more expensive in Europe
Renewable H2 would cost less to produce across the Gulf states,
based on today's gas and power prices, but such a price difference
seems unlikely in European nations until the 2030s, according to
separate analyst figures
Green hydrogen would be cheaper to
produce today than blue H2 across the sunny, oil-rich
Middle East, according to figures from analyst S&P Global Platts.
A separate assessment by UK-based
Aurora Energy Research states that blue hydrogen — derived from
natural gas using steam methane reformation with carbon capture and
storage (CCS) — will probably be cheaper to produce in Europe than
renewable H2 until the 2030s.
At current renewable electricity and gas
prices, green hydrogen would be cheaper to produce than blue in Saudi
Arabia, the United Arab Emirates (UAE), Qatar and Oman,
according to Platts.
The cheapest location for renewable H2
would be Qatar ($2.62/kg), followed by Saudi Arabia ($3.23/kg), Oman
($3.58/kg) and UAE ($4.51/kg) when using alkaline electrolysers, with
prices for PEM electrolysers roughly $1/kg higher.
By contrast, blue H2 would
cost between $4.66-$4.80/kg in those nations.
A similar situation exists in Western
Australia, with green hydrogen costing $2.61/kg, compared to $4.65/kg
for blue.
By contrast, the prices of green H2
in Europe would be far higher than blue today — despite record high
gas and carbon prices. Platts puts the current of green H2
in the UK and Netherlands at $18.47/kg and $14.66/kg, respectively,
compared to $10.55/kg and $6.49/kg for blue.
In a new report entitled Shades of
green (hydrogen) – part 2: in pursuit of €2/kg, Aurora states that
it does not believe green hydrogen will become cheaper than blue this
decade — at least, not without subsidies.
The analyst takes a longer-term view on
pricing, putting the “reference cost” for blue hydrogen production in
Europe at €2.50-2.70/kg — which is based on its gas price forecasts
from October 2021.
Green hydrogen plants in Europe powered
by onshore wind and solar (that do not draw power from the grid) would
not be able to beat those figures until the 2030s, the analyst says.
Aurora acknowledges that other analysts
have concluded that the cost of green hydrogen could fall below €2/kg
by 2030, but says its own analysis “shows that this cost benchmark is
optimistic in Europe”.
“Aurora examined how feasible it would be
to achieve hydrogen production costs of €2/kg [which would make it
competitive with grey H2 from unabated methane] and found
that both the power prices and the electrolyser capex need to decrease
significantly below what Aurora considers reasonable in its central
scenario. For instance, an electrolyser running at 50% load factor
with an average power cost of €10/MWh could beat the €2 threshold —
but assuming such a low power cost is unrealistic.
“Only by 2050 does electrolysis hydrogen
in Europe reach a benchmark of €2/kg,” the analyst says.
The company’s research director, Richard
Howard, explains: “Currently the cost of hydrogen production from
electrolysers is high, but through cost reductions and business model
innovative, we estimate that the cost of green hydrogen can reach €3
per kg in 2030 in some European markets, at which point it starts to
compete with hydrogen from fossil fuels.
“This suggests that the hydrogen sector
will need targeted support by governments during the 2020s in order to
scale and drive down costs.”
The figures in this article do not
include subsidies or delivery costs.
Green Play Ammonia™, Yielder® NFuel Energy.
Spokane, Washington. 99212
www.exactrix.com
509 995 1879 cell, Pacific.
Nathan1@greenplayammonia.com
exactrix@exactrix.com
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