Friday 3 June 2022

Hydrogen price could fall to €5 per kg in 2025

The price of green hydrogen could drop to €5 per kg by 2025, as renewable projects grow in popularity.

That’s according to a study by Aurora Energy Research, estimating that up to 300TWh of green hydrogen projects will be needed by 2050 to align with net zero aims.

The German consultancy claims that to date in Germany alone, 21GW of hydrogen projects have been announced, however not many of these have been realised.

Germany is aiming for an increase in hydrogen capacity to 10GW by 2030 and the research intimates that increased worldwide capacity will lead to increased imports, lowering the cost.

With current trends in project targets and investment, the study predicts that the cost of hydrogen will fall to €5 per kg by 2025, with imports catering for the spike in demand.

The report does caveat this estimation with the fact that the correct level of transport infrastructure and pipelines will need to be built to accommodate for mass imports.

If price trends follow its projections, Aurora Energy Research concludes that following a renewables-led strategy to energy demand will undoubtedly be the cheapest option.

The combination of a wind, solar and electrolysis are touted as the main reasons for the drop in price.

“Since the locations for the renewable systems can be optimised in these cases and the electrolyser can be built closer to the customers, the costs for hydrogen transport and potentially also for hydrogen storage decrease,” the report stated.