(Montel) High power prices could hamper production of green hydrogen at scale, but costs are likely to plummet as renewables use rises, said Oslo-based consultancy Rystad Energy on Thursday.
Blue hydrogen is significantly cheaper to produce in almost all regions of the world, she added. Blue hydrogen is made from natural gas with carbon capture storage, while renewable, or green hydrogen, is made by using renewable power to electrolyse water.
Green hydrogen currently costs around USD 8.60/kg to produce in Denmark, compared with around USD 2.30/kg to make blue hydrogen in Germany.
The cost of green would “plummet” due in part to an expected decrease in power prices as renewables increase their share of the energy mix, Andresen said.
Global production prices could drop to USD 2.80/kg by 2030, USD 1.60/kg by 2040 and USD 0.90 by 2050.
An “incredible” extent
“We expect renewable energy will take an increasing share of the global power mix towards 2050 and will scale to an absolutely incredible extent,” she added. Renewables would take the “lion’s share” of Europe’s power mix by 2050.
Global hydrogen demand was expected to quintuple to more than 300m tonnes/year by 2050, largely due to long-distance transport and steel, Rystad said.
Meanwhile, global annual battery demand would also “skyrocket” by 2050, peaking at around 20 TWh. This would be mostly driven by electric passenger vehicles and grid storage.
Battery production would likely face constraints on raw materials as demand rises, such as graphite, copper and nickel, Andresen said.