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Understanding global hydrogen production costs and curve downwards

Globally, hydrogen production costs are declining faster than erstwhile thought

RENEWABLE H2 COST COULD BE SEEN BREAK EVEN  WITH GRAY H2 BEFORE 2030 IN OPTIMAL REGIONS

Three factors are driving this acceleration. First, capex requirements are dropping. We expect a significant electrolyze capex decline by 2030 – to about USD 200-250/kW at the system-level (including electrolyze stack, voltage supply and rectifier, drying/purification and compression to 30 bar).   That is 30-50% lower than we anticipated last year, due to accelerated cost roadmaps and a faster scale-up of electrolyze supply chains. For example, several electrolyze manufacturers have announced near-term capacity scale-ups for a combined total of over approximately 3 GW per year.

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Electrolyze capex savings can reduce costs quickly in a rapid global scale up

Including  Global Hydrogen Production costs emissions related to gray and low-carbon hydrogen production greatly influences the breakeven dynamics between gray and renewable hydrogen. Assuming a carbon cost of about USD 50 per ton of CO2e by 2030, USD 150 per ton CO2e by 2040, and USD 300 per ton CO2e by 2050, can bring the earliest breakeven for renewable hydrogen forward to a 2028 to 2034 timeframe. The exact year will depend on the availability of local resources.   

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