The Two Major Obstacles To A Hydrogen Revolution

Hydrogen will play an indispensable role in a future carbon-free energy system, according to nearly everyone concerned with the matter. But scenarios showing its share in final energy in the year 2050 vary considerably. The International Renewable Energy Agency (IRENA) says 12%, the Brussels-based Hydrogen Council says 18%, while the EU’s announced target is 24%.

Whatever the final outcome may be, industry watchers now largely agree that there are two realms where costs must come down for carbon-free hydrogen to advance. The cost of renewable energy, already the object of remarkable reductions in the past decade, must continue to fall. And the cost of water electrolysis for hydrogen production, encompassing the basic hardware of green hydrogen, the electrolyser, must follow a similar path downward.

Many see both poised to happen. In fact, the two are integrally related, with operating expense and capital cost factoring into the total cost of electrolyser operation. The decline of renewable power prices is expected to continue, with accelerated deployment of renewables into grids. But capital costs must come down as well, with electrolysis equipment being manufactured more quickly and less expensively.

While the price of solar PV power has fallen approximately 90% in the past 10 years, it needs to fall still further and governments appear determined to help. For example, in March, the US Department of Energy (DOE) announced its objective that the cost of utility-scale solar power fall by more than half in 10 years, from a current cost of 4.6 cents per kilowatt-hour (kWh) to 3 cents/kWh by 2025 and 2 cents/kWh by 2030. DOE announced a host of R&D projects and seed capital for improved photovoltaics (perovskites, thin films) and Concentrated Solar Power (CSP) to achieve higher efficiencies and lower costs.

The cost of electrolysis technology has been declining as well, with design improvements for higher efficiency. Improved alkaline units are being deployed even while buyers are turning increasingly to higher efficiency proton exchange membrane (PEM) electrolysers. Meanwhile the technology is advancing for solid oxide electrolyser cells (SOEC), which promise to achieve very high efficiency from high heat input, from industrial heat sources, and potentially from nuclear reactors.

Source: https://oilprice.com/