Average cost of green hydrogen to fall to $1.50/kg by 2030 as electrolyzer capacity increases 50x: analyst

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Over 100 GW of electrolysers will be manufactured annually by the end of this decade, up from 2 GW in 2020, in line with growing demand for green H2according to a new report from Rethink Energy.

The UK-based analyst says Western manufacturers have already pledged to build factories to produce more than 42GW of electrolysers a year by 2030, providing the crucial economies of scale that will help drive down the price. electrolysers from around $1,400/kW today to $340/kW. by 2030.

These lower electrolyser costs, combined with the reduction in renewable energy prices, will help ensure that the average cost of green hydrogen around the world will reach $1.50/kg by 2030, well below the level current global price of $4/kg in the northwest United States (according to S&P Global Platts).

“The ability to produce small-scale, modular electrolysis cells at scale will make hydrogen accessible to whole swathes of industries that need it to decarbonize,” Rethink said in a press release accompanying the new study. The Electrolyzer Gigafactories Swelling Pipeline. “Just like solar modules in power generation and batteries in the EV [electric vehicle] space, electrolysers will exceed expectations.

“Rethink Energy predicts that even without any sudden improvements in technology – many of which are almost certain – the learning rate of electrolyser units will be 14%.

“Gradual improvements in efficiency and capacity factor will also lead to reduced demand for electricity, the price of which will itself fall. With similar economies of scale, the cost of solar energy in particular will fall below $20 per MWh by the end of the decade, representing 37% of the global cost reduction for green hydrogen By 2030, the global average cost of green hydrogen will have fallen to $1.50 per kilogram.”

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Rethink predicts that global hydrogen demand will increase from around 70 million tonnes today – which is mainly used for chemical production and oil refining – to 735 million tonnes by 2050, “nearly -all being produced by electrolysis”.

This is even more bullish than the Hydrogen Council pressure group forecasts of 690 million tonnes by 2050, while The International Energy Agency expects 520 million tons by mid-century in a net zero scenario, and analyst Wood Machenzie predicted 211 million tons.

“It will take a Herculean effort to build enough factories to support such construction, but market leaders are ready. So have a handful of new innovators,” says Rethink.

Each gigafactory – capable of building more than 1 GW of electrolyzers per year – will take about two years to build, he adds.

“New plants, with a combined capacity of approximately 12 GW per year, will need to be announced and added each year between 2026 and 2032.”

A graph in the report suggests that annual demand for electrolyzers will increase from less than 5 GW per year in 2023 to 20 GW in 2024 and 40 GW in 2027, to around 100 GW by 2031, with manufacturing capacity still slightly higher. demand, increasing from around 10 GW in 2023 to more than 100 GW in 2030 and more than 130 GW in 2032.

He adds: “The boom has already begun, with nearly 40 GW of electrolyzers to be installed in the next five years alone.”

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