Does Low-Cost Renewable Energy, Storage Mean Hydrogen is Here To Stay?

on December 14, 2020

Shoring up the economic viability of hydrogen will require “massive amounts of collaboration,” according to Mehta, but after several false starts, he and others see reason to believe hydrogen is about to establish a foothold.

“Hydrogen has gone through multiple hype cycles, and has not met its ambition,” Mehta said. But thanks to advances that have boosted the availability of renewable energy and increased government support, he said, “maybe the stars are finally getting aligned.”

Hydrogen is already gaining traction in the transportation sector, with Shell currently building hydrogen fueling stations in California and Germany, Mehta said. But he said increased adoption of green hydrogen production in the energy sector held the key to increasing scale and decreasing costs to competitive levels for other industrial applications.

According to analysis by IHS Markit released the week preceding the panel, hydrogen production is on track to exceed $1 billion by 2023, based on the number of projects already in advanced planning phases. Assuming plans for large-capacity electrolysis plants remain on track, green hydrogen could achieve cost parity with blue hydrogen by 2030 in regions with good access to renewable resources, and by 2040-2050 in additional locations, according to Soufien Taamallah, director of energy technologies and hydrogen research at IHS Markit.

“If plans for large capacity electrolysis plants (100 MW+) do not materialize,” Taamallah said in an email, “it will be difficult to reach cost parity with blue hydrogen.”

But electrolysis is only one part of producing green hydrogen, said Sunita Satyapal, Director of the U.S. Department of Energy’s Hydrogen and Fuel Cell Technologies Office. The price of electricity represents the majority of the cost of hydrogen, she said, but hydrogen could achieve cost parity if the cost of electricity dropped to 3 cents per kWh or lower — which she said low-cost renewable generation is on track to achieve.

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Fractal Energy Storage ConsultantsDoes Low-Cost Renewable Energy, Storage Mean Hydrogen is Here To Stay?