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Cost Projection of Global Green Hydrogen Production Scenarios

Abstract

A sustainable future hydrogen economy hinges on the development of green hydrogen and the shift away from grey hydrogen, but this is highly reliant on reducing production costs, which are currently too high for green hydrogen to be competitive. This study predicts the cost trajectory of alkaline and proton exchange membrane (PEM) electrolyzers based on ongoing research and development (R&D), scale effects, and experiential learning, consequently influencing the levelized cost of hydrogen (LCOH) projections. Electrolyzer capital costs are estimated to drop to 88 USD/kW for alkaline and 60 USD/kW for PEM under an optimistic scenario by 2050, or 388 USD/kW and 286 USD/kW, respectively, under a pessimistic scenario, with PEM potentially dominating the market. Through a combination of declining electrolyzer costs and a levelized cost of electricity (LCOE), the global LCOH of green hydrogen is projected to fall below 5 USD/kgH2 for solar, onshore, and offshore wind energy sources under both scenarios by 2030. To facilitate a quicker transition, the implementation of financial strategies such as additional revenue streams, a hydrogen/carbon credit system, and an oxygen one (a minimum retail price of 2 USD/kgO2 ), and regulations such as a carbon tax (minimum 100 USD/tonCO2 for 40 USD/MWh electricity), and a contract-for-difference scheme could be pivotal. These initiatives would act as financial catalysts, accelerating the transition to a greener hydrogen economy.

Related subjects: Policy & Socio-Economics
Countries: Greece
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/content/journal5232
2023-11-09
2024-06-21
/content/journal5232
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