Audio Markets - 27/February/2020

Where to direct support for hydrogen without wasting money

As with any technology, the key to cost reduction is the rate at which the technology is deployed, but the hydrogen economy is moving forward slowly

More use of hydrogen in energy systems is increasingly held up as important to the transition away from use of fossil fuels, but it is important to analyse exactly where hydrogen is genuinely needed as a clean energy solution and how the necessary technological advances will be funded

Despite plenty of hype about its potential as a solution to help the world decarbonise, green hydrogen has received relatively little funding compared to other renewable energy solutions. Only about 4% of the energy research budgets of International Energy Agency members was spent on hydrogen and fuel cells in 2018. Over 20% went to nuclear energy and around 16% to renewables

Increasing volumes of cheap renewables, falling costs of electrolysers and new solutions are likely to boost hydrogen’s role in the clean energy transition, though only for specific uses. Some forms of transport, in particular trains and ferries, could be key beneficiaries as they struggle to decarbonise

At a typical cost of €50 a megawatt hour for wind and solar in Europe feeding an electrolyser costing €900 a kilowatt hour, the hydrogen produced would cost around €90 a megawatt hour, far from competitive with the price of European natural gas at €12/MWh in January 2020. The levelised cost of electricity from onshore wind in Europe ranges from around €50/MWh to $100/MWh ...


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