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Why green hydrogen could be cheaper
than fossil fuels in just a few years
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Source: ZEN Energy
New research suggests that bigger and
better electrolysers will be key to producing green hydrogen at a
lower cost than fossil fuels, and Australia’s abundance of cheap solar
means this cross-over point will come ‘sooner rather than later’.
The analysis has been detailed in a paper
published in in the journal
Cell Reports Physical Science, which identifies the potential
pathways for a renewable hydrogen to achieve cost competitiveness with
fossil fuels, including gas, coal and transport fuels.
![](images/images_04_07_2022/pic2.jpg)
Researchers from the University of New
South Wales modelled a number of technology scenarios to build an
understanding of the cost drivers of renewable hydrogen and where
there were opportunities to drive down costs.
The study found that the current cost of
renewable hydrogen ranged between $AUD4.04 to $AUD6.53 per kilogram,
but the researchers were able to identify scenarios that would deliver
renewable hydrogen costs consistent with targets to get production
costs below $2 per kilo, a widely recognised benchmark where renewable
hydrogen becomes competitive with fossil fuels.
“After plugging all these different
values into our algorithm and getting a range of prices of hydrogen
energy, we then said, ‘Okay, so there were some cases where we got
closer to that $US2 per kilogram figure ($AUD2.80). What was it about
those cases that got it down so low?’” report co-author Nathan Chang
said.
“Capital costs of electrolysers and their
efficiencies still dictate the viability of renewable hydrogen,”
co-author Dr Rahman Daiyan added. “One crucial way we could further
decrease costs would be to use cheap transition metal-based catalysts
in electrolysers. Not only are they cheaper, but they can even
outperform catalysts currently in commercial use.”
“Studies like these will provide
inspiration and targets for researchers working in catalyst
development.”
The study found that reductions in the
cost of electrolyser technologies will be the key to getting the cost
of producing renewable hydrogen to a globally competitive level, and
that is is likely that renewable hydrogen will soon be produced at a
lower cost to that produced using fossil fuels.
In particular, the UNSW researchers found
that Australia is well placed to lead the emergence of a commercially
viable renewable hydrogen industry that can out compete fossil fuels,
leveraging Australia’s abundance of solar resources.
The analysis found that it will be
possible to produce low cost hydrogen in remote parts of Australia,
where the solar resource could be maximised and would avoid the need
to invest in new grid infrastructure.
Regions like Port Hedland in Western
Australia could deliver competitively priced renewable hydrogen into
export markets like Japan and South Korea, which are both aiming to
boost their use of renewable hydrogen but do not enjoy the same access
to solar resources as Australia does.
The research has been prepared with the
support of the Australian Renewable Energy Agency (ARENA), which is
preparing to provide $70 million in funding support for several
large-scale electrolyser projects in Australia.
Low emissions hydrogen featured
prominently in the
Technology Roadmap recently unveiled by the Morrison government,
but which will advocate for investment in fossil fuel hydrogen paired
with carbon capture and storage alongside renewable hydrogen.
However, the researchers said that it was
only a matter of time before renewable hydrogen became a cheaper
source of energy than traditional fossil fuels, with the cost of solar
energy continuing to fall dramatically.
“Because PV costs are reducing, it is
changing the economics of solar hydrogen production,” Dr Chang said.
“In the past, the idea of a remote solar
driven electrolysis system was considered to be far too expensive. But
the gap is reducing every year, and in some locations there will be a
cross-over point sooner rather than later.”
The researchers added that it was crucial
that governments played an active role in helping to increase the
scale of production, including by supporting the development of bigger
and better electrolyser technologies.
“With technology improvements in
electrolyser efficiency, an expectation of lower costs of installing
these types of systems, and governments and industry being willing to
invest in larger systems to take advantage of economies of scale, this
green technology is getting closer to being competitive with
alternative fossil fuel production of hydrogen,” Dr Daiyan added.
Michael Mazengarb is a
Sydney-based reporter with RenewEconomy, writing on climate
change, clean energy, electric vehicles and politics. Before
joining RenewEconomy, Michael worked in climate and energy
policy for more than a decade.
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