BloombergNEF (BNEF) now believes the cost of
hydrogen made from renewable electricity is set to fall faster than it
previously estimated, driven by dropping solar PV electricity costs.
Renewable hydrogen should now cost less than H2 made from natural gas
with carbon capture and storage in all modeled markets by 2030,
according to its analysis.
research contains some significant findings for hydrogen producers and
consumers around the world, as well as coal and gas companies:
Green hydrogen can be cheaper than natural
gas: ‘Green’ hydrogen from renewables should get cheaper than natural
gas (on an energy-equivalent basis) by 2050 in 15 of the 28 markets
modeled, assuming scale-up continues. These countries accounted for
one-third of global GDP in 2019.
‘Blue’ hydrogen undercut by green: In all
of the markets modeled, ‘green’ hydrogen should get cheaper than both
‘blue’ hydrogen (from fossil fuels with carbon capture and storage -
CCS) and even polluting ‘gray’ hydrogen from fossil fuels without CCS.
85% cost decline coming: The costs of
producing ‘green’ hydrogen from renewable electricity should fall by up
to 85% from today to 2050, leading to costs below $1/kg ($7.4/MMBtu) by
2050 in most modeled markets.
Cheaper solar behind the decline: The above
costs are 13% lower than our previous 2030 forecast and 17% lower than
our old 2050 forecast. Falling costs of solar PV are the key driver
behind the reduction. We now think that PV electricity will be 40%
cheaper in 2050 than what we had thought just two years ago, driven by
more automatic manufacturing, less silicon and silver consumption,
higher photovoltaic efficiency of solar cells, and greater yields using
“Such low renewable hydrogen costs could completely rewrite the energy
map,” said Martin Tengler, lead hydrogen analyst at BloombergNEF. “It
shows that in future, at least 33%
of the world economy could be powered by clean energy for not a cent more
than it pays for fossil fuels. But the technology will require continued
government support to get there - we are at the high part of the cost
curve now, and policy-supported investment is needed to get to the low