Green Energy

Renewables Growth Could Boost Green Hydrogen Production by 2030

A new report has revealed that the production of green hydrogen could compete with fossil fuel-based hydrogen by 2030 in Australia, Germany and Japan, should power prices for renewables reach USD 30 per megawatt-hour (MWh). The research conducted by Wood Mackenzie reveals that at present that price is in the range from USD 53 to USD 153/MWh in those markets for wind and solar power purchase agreements (PPA).

The research shows that less than 1 percent of all hydrogen produced today comes from renewable electricity, relying instead on natural gas and coal. Switching to hydrogen produced by wind and solar via electrolysis which splits water molecules into hydrogen and oxygen atoms, offers a significant opportunity to decarbonise its production and reach emissions targets. According to Wood Mackenzie, from 2000 to the end of 2019, 252 megawatts (MW) of green hydrogen projects will have been deployed worldwide. By 2025, this will increase by 1,272 percent, with the deployment of a further 3,205 MW of electrolysers dedicated to green hydrogen production.

Ben Gallagher, a senior analyst at Wood Mackenzie, said that the large increase in the 2019-2025 period is partially due to the nascency of the market. But aggressive targets in East Asia and increased interest from major international stakeholders will drive deployment in the near term.

“While cost-competitiveness might be out of reach in most scenarios by 2025, national targets and pilot projects will produce enough volume to realise substantial capex declines beyond 2025,” he added.

Gallagher said that as renewable energy deployment grows, so too will the green hydrogen market.

But there are challenges. While green hydrogen has made gains in a number of key markets, including Japan, Germany and Australia, at present it cannot compete with the low costs of locally produced coal and natural gas-produced hydrogen in China and the US, for example. On top of this, it remains unclear if renewable PPA prices worldwide will fall fast enough to make green hydrogen production competitive. However, the overall outlook of the research is optimistic about the green hydrogen sector’s future.

“We are just embarking on the energy transition,” Gallagher said. “There are several unknowns that would further spur adoption of green hydrogen: changing policy dynamics, new carbon regimes, new ways to monetise grid flexibility and lower-than-expected costs of renewables.”

Ayush Verma

Ayush is a correspondent at iamrenew.com and writes on renewable energy and sustainability. As an engineering graduate trying to find his niche in the energy journalism segment, he also works as a staff writer for saurenergy.com.

Recent Posts

BASF, Shenergy Group join forces for biomethane commercialisation

Global chemicals and bioenergy major BASF has announced to have signed an MoU with China’s…

17 hours ago

Rajputana Biodiesel set for inaugural IPO on November 26

Rajputana Biodiesel is set to debut in the capital market on November 26 as the…

20 hours ago

SECI, H2Global Stiftung collaborate to promote Green Hydrogen initiatives

The Solar Energy Corporation of India Ltd (SECI) has signed an MoU with H2Global Stiftung…

22 hours ago

Pilibhit’s Kisan Co-op Sugar Mill to begin ethanol production

Uttar Pradesh is making strides in the bioenergy and taking the decarbonisation quest of the…

23 hours ago

Deepak Agrawal is new Managing Director of GPS Renewables’ project development firm ARYA

Bengaluru-headquartered biogas EPC firm GPS Renewables has announced that it has appointed Deepak Agarwal as…

23 hours ago

Seawater-to-green hydrogen: NTPC to set up unique project near Vishakhapatnam

In a key development to further the green hydrogen movement in the country, NETRA, the…

3 days ago