According to reports, experts said in a webinar held by the CMS law firm that the cost of electrolyzers has fallen sharply in the past decade, but before 2030, electro-gas technology will not be able to compete with fossil hydrogen.
Compared with other technologies, one of the key obstacles to the development of renewable hydrogen is the relatively high start-up cost, which means that government subsidies are required for the project to land.
Bernt Elsner, a partner of CMS in Vienna, stated in the webinar that the estimated cost of a renewable hydrogen project is 2.5-5.5 Euro/kg, compared to a cost of 2 for a fossil hydrogen project containing carbon capture and storage (CCS). Euro/kg, the cost of a fossil hydrogen project without carbon capture and storage (CCS) is 1.5 Euro/kg. Fossil hydrogen is hydrogen produced from natural gas and, to a lesser extent, from coal, it is the technology that dominates the hydrogen market today.
However, in the past ten years, the cost of electrolyzers has been reduced by 60%, and it is expected that by 2030, the cost will be further reduced by 50%. Elsner said that by 2030, areas where wind and solar power are relatively cheap are expected to compete with fossil hydrogen.
He said: “This means that until 2030, state subsidies will be a necessary means to promote clean hydrogen. The review of EU energy and climate country aid guidelines is expected to be carried out in 2021. These guidelines are expected to help clarify which countries Subsidies for hydrogen projects are eligible for Brussels' state aid approval."
In addition, the European Union is expected to increase funding for clean hydrogen projects in the next few years, as stipulated in the hydrogen strategy launched by the European Union in July. Renewable hydrogen generated by wind and solar energy is a priority. The roadmap requires that by 2030, the electrolysis capacity in Europe will reach 40 GW, and the production capacity of neighboring European countries such as North Africa and Ukraine will reach 40 GW.
Source: Chemical Network
