Fuente: EEX.

The cost of green hydrogen: estimates and future challenges

Green hydrogen (H2V) is presented as a key solution for the decarbonization of transportation and other sectors, but its adoption largely depends on future production costs. Currently, due to the limited operation of plants, real data on costs is scarce, which forces reliance on projections to estimate when and where it will be economically viable.

The International Council on Clean Transportation (ICCT) uses three main factors to calculate these costs in its latest report: the price of renewable electricity, the cost of electrolyzers, and the capital investment required to build the plants. Variations in the costs of these elements explain the differences in estimates between various groups.

The ICCT’s analysis shows that the cost of renewable electricity will be a crucial factor, with variations depending on the region and the type of connection to the grid. Additionally, the cost of electrolyzers could decrease over time as technology improves, contributing to the reduction of hydrogen production costs.

However, uncertainty regarding consistent access to renewable electricity and the ability of electrolyzers to adapt to intermittent renewable energy production are challenges that must be addressed to make green hydrogen an economically viable alternative.

Key measures to reduce costs in Europe

On February 15, 2024, two major initiatives were announced that could reduce the cost of H2V, which is currently higher compared to other energy alternatives.

First, a state aid package of 6.9 billion euros was approved for the hydrogen value chain in seven countries: France, Germany, Italy, the Netherlands, Poland, Portugal, and Slovakia. This project will allow the installation of 3.2 GW of electrolyzers and 2,700 km of pipelines for hydrogen transmission.

Storage facilities with a capacity of 370 GWh and the construction of port terminals for the transportation of liquid hydrogen are also planned.

Second, the European Hydrogen Bank launched an auction that attracted 132 renewable hydrogen production projects, with the promise of installing 8.5 GW of electrolyzers over the next decade and producing 8.8 million tons of H2V. This measure aims to foster private investment, integrate green hydrogen into the European energy mix, and reduce the price gap with gray hydrogen.