The green hydrogen sector, which saw a surge of enthusiasm between 2018 and 2023, now faces a more complex cost reality that challenges initial expectations.

According to Alejandro Diego Rosell, professor at EOI and consultant at Nuvix Consulting, “In recent months, there has been a noticeable decrease in demand for specialized hydrogen courses, although interest remains, particularly among professionals from the oil & gas sector who are looking to transition to hydrogen.”

The lack of competitiveness in costs remains one of the biggest obstacles to mass growth for this technology, which still heavily depends on the prices and availability of renewable energy.

Green hydrogen, which reached peak interest in 2023, as evidenced by Google Trends searches, is currently undergoing a revaluation phase.

In an interview with Energía Estratégica España, Rosell observes that the production price of green hydrogen remains one of the main challenges, currently ranging between 5 and 6 euros per kilogram, a level that keeps it far from the 1 euro/kg goal.

In this regard, the consultant states that achieving that goal “seems increasingly distant, as production costs with photovoltaic generation are close to a dollar per kilo only in theory, and under specific generation conditions.”

Solar energy, a key generation source for green hydrogen, currently allows for a capacity factor around 30%. To achieve competitiveness, a capacity factor of between 70% and 80% would be required, a theoretical figure mentioned in strategic documents but one that is unreachable with current infrastructure and technology.

Spain’s National Integrated Energy and Climate Plan (PNIEC) sets a target of 11 GW of electrolyzer capacity by 2030.

However, Rosell warns that this target faces serious infrastructure and demand challenges: “There is not enough time, nor are there offtakers willing to pay the price offered in the market right now.”

To reach this goal, Rosell emphasizes that not only greater efficiency in electrolyzers is required but also cost reductions that will allow hydrogen to become a viable option.

Innovative initiatives and the role of subsidies and auctions

Pilot projects and European auctions are essential for improving the competitiveness of green hydrogen and reducing the cost gap.

According to Rosell, these projects not only help collect data on the economic viability of hydrogen but are also “necessary to gain experience and generate market signals.”

Without these initiatives, the hydrogen sector will struggle to access financing and secure predictable returns.

Nonetheless, Rosell notes that this technology has a “slower learning curve compared to other renewables,” which poses additional challenges.

Innovative projects, supported by subsidies and auctions, will need to make advances in CAPEX, infrastructure, and efficiency for green hydrogen to compete in a market where price remains a fundamental challenge.

On a technological level, electrolyzers are seeing increased supply, particularly from China, who propose lowering costs with equipment offering higher production capacity, which would be key to achieving competitiveness at a European level.

Market expectations

While green hydrogen is attracting attention in Spain, the labor market linked to this technology remains small.

According to the latest report from APPA Renovables, employment in the hydrogen sector in Spain does not exceed a thousand people, a modest figure compared to sectors such as photovoltaics and wind energy.

Rosell highlights that although “Spain has trained professionals and several academic departments focused on the topic, the market is still small and requires a greater base of projects and knowledge generation to grow sustainably.”

Finally, he emphasizes the commitment of universities and educational centers in Spain, such as the University of Mondragón and EOI, that continue to promote specialized hydrogen training programs but maintains a cautious view regarding the sector’s expansion: “It is a sector with potential, but it will not have the reach that is sometimes projected, as happened with photovoltaics or batteries.”