In 2035, 90% of global markets will need to build a new plant to produce renewable H2 instead of continuing to operate a gray hydrogen plant. In Sweden and Spain overtaking will take place 5 years earlier. And the date when green hydrogen will surpass blue hydrogen with CO2 capture and storage is brought forward to 2028-2033
The latest BNEF report on hydrogen level cost
(sustainabilityenvironment.com) – Already in 2030, in Sweden and Spain, it will be necessary to build a new plant to obtain green hydrogen from renewable sources instead of continuing to produce grey hydrogen from fossil gas in existing plants. The same will happen in 3 other key markets: Brazil, India and China. And by 2035, green H2 overtaking will occur in 90% of global markets after falling almost anywhere below the $2 per kg ($/kg) threshold. In the remaining 10%, renewable hydrogen will be the most cost-effective choice only in 2050. The forecast is contained in BNEF’s latest report on the level cost of hydrogen (LCoH2).
All this despite the latest update of the projections has led to a slight rise in the level cost of hydrogen. “Inflation, higher financing costs for some markets and longer construction times drive this change,” BNEF explains. In addition, the fall in gas prices in the second half of 2022 slightly favoured non-renewable H2. As a result, blue hydrogen, that obtained from methane gas with CO2 capture and storage, today remains the most competitive option with estimated costs of 59% lower than those for green hydrogen projects financed in 2023.
Hydrogen level cost: even blue H2 has years counted
But these are transitory fluctuations that do not change the overall picture and the medium and long-term projections, BNEF analysts say. In all the markets analyzed in the report, indeed, green hydrogen now exceeds blue from 1 to 3 years before. An important difference is made by the electrolyzers. Using the alkaline ones of Chinese production, overtaking comes in 2028. While with those of Western invoice the date slips to 2033. The most advantageous combination, however, that is the one that allows the LCoH2 lower, sees the onshore wind and electrolysers of Western invoice in the Brazilian market: a configuration that pushes the price of the H2 to 1,47$/kg in 2030.
