Green Hydrogen Hype Is Giving Way to Reality – Bloomberg
Hydrogen has gotten a heavy dose of hype this year. Today’s newsletter looks at the reality, including a forecast from a new BloombergNEF report. You can read and share these stories exploring the hydrogen landscape on Bloomberg.com. For unlimited access to climate and energy news, please subscribe.
Hydrogen companies worldwide are already struggling with canceled projects and sluggish demand. In the US, billions of dollars of projects have been stalled waiting for President Joe Biden’s administration to issue final rules for a tax credit meant to spur production.
BNEF had in the past forecast steep declines in the price of green hydrogen, which is made by splitting it from water with machines called electrolyzers running on renewable power. But in its forecast published Monday, the firm more than tripled its 2050 cost estimate, citing higher future costs for the electrolyzers themselves. BNEF now forecasts green hydrogen to fall from a current range of $3.74 to $11.70 per kilogram to $1.60 to $5.09 per kilogram in 2050.
For comparison, the most common form of hydrogen used today — stripped from natural gas, with the carbon emissions vented into the atmosphere — costs from $1.11 to $2.35 per kilogram, according to BNEF. The research firm expects prices for such “gray” hydrogen to remain largely the same through mid-century.
BNEF analyst Payal Kaur, said :
The higher costs for producing green hydrogen without any subsidies or incentives means it will continue to be challenging to decarbonize hard-to-abate sectors, such as chemicals and oil refining, with hydrogen produced via electrolysis powered by renewables,
Those industries along with steel mills and power plants have been tagged as possible end users of the gas. But doing so would require expensive new equipment, which has stunted demand.
Only two markets — China and India — are likely to see green hydrogen become cost-competitive, according to BNEF. There, the cleaner fuel will reach a comparable price to gray hydrogen by 2040.
READ the latest news shaping the hydrogen market at Hydrogen Central
Green Hydrogen Hype Is Giving Way to Reality – Bloomberg, source
