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Hydrogen Economy Outlook

Key Messages

Abstract

The falling cost of making hydrogen from wind and solar power offers a promising route to cutting emissions in some of the most fossil fuel dependent sectors of the economy, such as steel, heavy-duty vehicles, shipping and cement.

Hydrogen Economy Outlook, a new and independent global study from research firm BloombergNEF (BNEF), finds that clean hydrogen could be deployed in the decades to come to cut up to 34% of global greenhouse gas emissions from fossil fuels and industry – at a manageable cost. However, this will only be possible if policies are put in place to help scale up technology, and drive down costs.

The report’s findings suggest that renewable hydrogen could be produced for $0.8 to $1.6/kg in most parts of the world before 2050. This is equivalent to gas priced at $6-12/MMBtu, making it competitive with current natural gas prices in Brazil, China, India, Germany and Scandinavia on an energy-equivalent basis. When including the cost of storage and pipeline infrastructure, the delivered cost of renewable hydrogen in China, India and Western Europe could fall to around $2/kg ($15/MMBtu) in 2030 and $1/kg ($7.4/MMBtu) in 2050.

Kobad Bhavnagri, head of industrial decarbonization for BNEF and lead author of the report, said: “Hydrogen has potential to become the fuel that powers a clean economy. In the years ahead, it will be possible to produce it at low cost using wind and solar power, to store it underground for months, and then to pipe it on-demand to power everything from ships to steel mills.”

Hydrogen is a clean-burning molecule that can be used as a substitute for coal, oil and gas in a large variety of applications. But for its use to have net environmental benefits, it must be produced from clean sources, rather than from unabated fossil fuel processes – the usual method at present.

Renewable hydrogen can be made by splitting water into hydrogen and oxygen, using electricity generated by cheap wind or solar power. The cost of the electrolyzer technology to do this has fallen by 40% in the last five years, and can continue to slide if deployment increases. Clean hydrogen can also be made using fossil fuels if the carbon is captured and stored, but this is likely to be more expensive, the report finds.

Read the full report on the BloombergNEF website here

Related subjects: Policy & Socio-Economics
Countries: Singapore
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2020-03-30
2021-09-18
http://instance.metastore.ingenta.com/content/policypaper1533
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