Cost Comparison: Green Hydrogen vs. Traditional Energy Sources
Green Hydrogen
- Current Cost: The cost of producing green hydrogen is currently between $4 and $6 per kilogram (kg), which is significantly higher than traditional energy sources.
- Future Projections: By 2030, the cost of green hydrogen is projected to decrease to around $3.7 per kg in the United States and $5.6 per kg in the European Union, according to the International Council on Clean Transportation (ICCT).
Traditional Energy Sources
Grey Hydrogen
- Current Cost: Grey hydrogen, primarily produced from fossil fuels, is less expensive than green hydrogen, costing one-third of its price, or about $2 to $3 per kg.
- Future Projections: It is anticipated that green hydrogen might become cheaper than grey hydrogen by the end of the decade, particularly in new production facilities.
Natural Gas
- Cost Per Energy Unit: Natural gas is significantly cheaper than hydrogen on a per unit of energy basis. Bulk natural gas purchases for power production are around $0.50 per therm, which equates to approximately $0.50 per million Btu. In contrast, hydrogen is about 10-13 times more expensive per Btu when produced via electrolysis from renewable electricity.
Key Factors Influencing Green Hydrogen Costs
- Renewable Electricity: The cost of renewable electricity, such as from solar PV or wind, is a major factor in green hydrogen production costs. As the cost of renewable electricity decreases, so does the cost of green hydrogen.
- Technology Improvements: Advances in electrolyzer technology and economies of scale are expected to further reduce green hydrogen production costs.
Conclusion
Green hydrogen is currently more expensive than traditional energy sources like grey hydrogen and natural gas. However, ongoing reductions in renewable energy costs and technological advancements are likely to make green hydrogen more competitive in the future. By 2030, green hydrogen could potentially become more cost-effective than grey hydrogen, especially in new production setups.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-cost-of-producing-green-hydrogen-compare-to-traditional-energy-sources/
