European green hydrogen production is cheaper than blue and grey
October 19, 2021The high price of natural gas and carbon have made it so H2 produced with renewable energy is more affordable.
As CO2 prices reach record levels and the price of natural gas continues to rise, green hydrogen production has become cheaper in Europe than blue and grey forms of H2.
New calculations have shown that it’s cheaper to capture and store the emissions than to release it.
While the expense associated with causing CO2 air pollution has never been higher, the price of natural gas has reached the point that using renewable energy for green hydrogen production is a comparatively affordable option.
The EU carbon price at a record €60 per tonne (USD$69) makes it so that grey H2 made using natural gas without any carbon capture would be substantially more expensive to make than blue H2, which is also made with natural gas, but that uses carbon capture and storage to reduce the greenhouse gas emissions. That said, there has yet to be any blue H2 made in Europe.
Keynumbers and the Energy Flux services in Australia calculated that under real use circumstances, the levelized cost of making green H2 would currently be about €4.18 per kilogram. Comparatively, it would currently cost €6.55 per kilogram for grey H2 and €6.21 per kilogram for blue H2, according to the calculations they published in their newsletter.
The calculation for the price of green hydrogen production was based on several assumptions.
For instance, the cost of electricity and the price of natural gas were both assumptions made for the calculation that were based on varying figures. Other factors upon which the calculation was dependent on assumptions included renewable project capacity factors, capex and opex (capital and operating expenditures), electrolyzer efficiency, interest rates, carbon capture rates, and more.
That said, even if all those factors were to adjust slightly or to vary over time, the point of the calculation was the substantial gap between the price associated green hydrogen fuel production using renewable energy and the amount it would cost to make blue and grey H2. However, should the price of natural gas fall substantially, the entire conclusion of the calculation could easily be reversed.
With over 15 years of reporting hydrogen news, we are your premier source for the latest updates and insights in hydrogen and renewable energy.
the real point here is about “true” long term cost
blue or grey hydrogen production, from this moment forward, make no sense if you cost in the likely irreversible impact on the climate
whether the price of gas or non-renewable energy is up or down the only long term choice is renewable production
please forget current market rates and short term economics and invest in a clean future where the long term financial, environmental, social, personal and capital costs are improved
succinctly put!
Plasma Kinetics can absorb like a sponge, hydrogen from industrial waste streams, and for less money than steam reformation.
I agree with :
“Why are we still using colours for hydrogen? Any of the rainbow colour means nothing if we don’t specify the carbon footprint behind each location generating hydrogen. I call on manufacturers to openly and thoroughly report their carbon footprint per kg or ton of #hydrogen produced….Prof.Dr. Krzysztof Koziol “
The price of natural gas today is driven by its use to generate electricity. The price of natural gas when (not if) it is used to produce hydrogen will be depressed by the replacement of natural gas power plants by nuclear power plants. Thus, the argument made here has in internal contradiction – purposeful or mistaken? . Nuclear power plants typically have unused capacity at night, so the incremental cost of the energy needed for direct conversion is also low.
Today, carbon black production generates CO2, so the elimination of that source, in addition to the elimination of natural gas and coal plants now used to generate electricity by replacing them with nuclear power. will lead to a much lower generation of CO2 than present strategy – renewable energy + fossil fuels + occasional electricity shortages.