Bloomberg New Energy Finance (BNEF) has found the cost of producing hydrogen gas with renewables could fall by as much as 80% by 2030, making it economical.
On 21 August, BNEF released its analysis in which it looked at how to generate hydrogen from renewable sources as wind turbines and solar panels, along with how gas produced can be stored to provide energy at times of low renewable generation. Renewable hydrogen costs were found to fall as low as $1.40 (£1.15) a kilogram by 2030 – down from the current range of $2.50 (£2.06) to $6.80 (£5.61).
BNEF found the most cost-efficient strategy to be one where a hydrogen operation is connected directly to wind and solar energy resources, maximising the time a hydrogen plant could run. A fully optimised system design, solar and wind could provide power to electrolysers for $24/MWh (£19.78) by 2030 and $15/MWh (£12.37) by 2050.
BNEF warned that, without political support, a hydrogen economy is unlikely to develop. It said this, combined with technological advances and increased scale, would see costs fall and demand rise. It stated that post-2030 with costs falling, demand would start to take off and reach as much as 275mn metric tons of renewable hydrogen a year by 2050.
Kobab Bhavnagri, Head of Special Projects at BNEF, said: “Once the industry scales up, renewable hydrogen could be produced from wind or solar power for the same price as natural gas in most of Europe and Asia. These production costs would make green gas affordable and put the prospects for a truly clean economy in sight.”