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Clean hydrogen production could be brought below $2/kg by 2030, says new report

Clean hydrogen production could be brought below $2/kg by 2030, says new report

The production cost of clean hydrogen could be brought well below $2/kg by 2030, says a new report released today (27th April).

Making the Hydrogen Economy Possible: Accelerating clean hydrogen in an electrified economy says clean hydrogen will play a complementary role to decarbonise various sectors where direct electrification is likely to be technologically very challenging or prohibitively expensive, such as in steel production and long-distance shipping.

It also says clean hydrogen could play a significant role in future decarbonisation strategies with production set to reach 50 million tonnes by 2030.

The report, released by the Energy Transitions Commission, estimates that for a net zero greenhouse gas emissions economy by 2050, between 500 to 800 million tonnes of clean hydrogen per annum will be needed – a five to seven fold increase compared to hydrogen usage today.

Green hydrogen, produced via electrolysis of water, is likely to be the most cost-competitive and therefore the major production route in the long-term, due to falling renewable electricity and electrolyser equipment costs.

It is estimated that it could account for approximately 85% of total production by 2050.

Blue hydrogen produced from natural gas with carbon capture and low methane leakage will also play an important role in transition and in some specific very low-cost gas locations.

Read more: Shades of hydrogen: Understanding grey, blue and green

To make hydrogen more viable for long term strategies, a critical motion is needed to ramp up both production and use in the 2020s to enable cost reductions of below $2/kg.

Even once clean hydrogen becomes cheaper than grey hydrogen, using hydrogen in different industrial and transportation sectors will often still impose a green cost premium compared to current high-carbon technologies.

Public policy is therefore essential to drive uptake of clean hydrogen at pace. Policymakers will also need to anticipate growing hydrogen transport and storage needs.

Additionally, around $2.4 trillion ($80bn per annum) will be required between now and 2050 for hydrogen production facilities and transportation & storage.

The Energy Transitions Commission is a coalition of more than 45 leaders from global energy producers, energy industries, financial institutions and environmental advocates – including ArcelorMittal, Bank of America, BP, Development Research Centre of the State Council of China, EBRD, HSBC, Iberdrola, Ørsted, Shell, Tata Group, Volvo Group and the World Resources Institute among others.

Read the report in full here.

In focus: Transitioning the UK’s gas networks to hydrogen

A range of innovation projects are underway in the UK working on how to transition the country’s gas networks from delivering natural gas to hydrogen, so homes and businesses can continue to receive the energy they need safely and securely.

Led by the UK’s five gas network operators – Cadent, National Grid, Northern Gas Networks, SGN and Wales & West Utilities, these projects range from testing blending up to 20% of hydrogen into the existing gas grid to how we will transport 100% renewable hydrogen from offshore wind turbines all the way to people’s living rooms.

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