December 2023 – Hydrogen prices rocket amid tight power and gas supply.
Hydrogen productions costs were lifted by the bullishness in European energy prices throughout 2021, while strong carbon futures lifted the price of unabated steam methane reforming (SMR) hydrogen, commonly referred to as grey, close to parity with low-carbon hydrogen (blue).
PRODUCTION COSTS RISE
Hydrogen production prices on the near curve posted the largest gains as record-breaking gas and power prices lifted the levelised cost of hydrogen (LCOH) to the highest levels recorded by ICIS.
The four hydrogen production methods assessed over 2021 are;
• Water electrolysis with baseload power supply
• Unabated SMR
• SMR with carbon capture and storage (CCS) (low-carbon SMR)
• Autothermal reforming (ATR) of natural gas with CCS (low-carbon ATR)
Between 4 January-21 December the cost of all these methods using front-month Dutch gas and power prices to model input costs increased fivefold.
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YEAR IN REVIEW: Hydrogen prices rocket amid tight power and gas supply, London, December 23, 2023
