BloombergNEF: "Green H2 can be cheaper than natural gas"

BloombergNEF (BNEF) published a new piece of research forecasting the costs of renewable hydrogen.

The research contains some significant findings for hydrogen producers and consumers around the world, as well as coal and gas companies:

Martin Tengler, lead hydrogen analyst at BloombergNEF commented: "Such low renewable hydrogen costs could completely rewrite the energy map. It shows that in future, at least 33% of the world economy could be powered by clean energy for not a cent more than it pays for fossil fuels. But the technology will require continued government support to get there - we are at the high part of the cost curve now, and policy-supported investment is needed to get to the low part."

"By 2030, it will make little economic sense to build 'blue' hydrogen production facilities in most countries, unless space constraints are an issue for renewables. Companies currently banking on producing hydrogen from fossil fuels with CCS will have at most ten years before they feel the pinch. Eventually those assets will be undercut, like what is happening with coal in the power sector today."

"On one hand the reduction in the forecast was surprising, on the other hand not. This is how it goes with clean energy. Every year it gets cheaper, faster than anyone expects. The key driver is the falling cost of solar PV electricity. We now think solar PV power will be 40% cheaper by 2050 than what we had thought just two years ago."

1H 2021 Hydrogen Levelized Cost Update

The levelized cost of hydrogen (LCOH2) made from renewable electricity is set to fall faster than we previously estimated, driven by a downward revision in our forecast for solar PV electricity costs. Renewable hydrogen should now cost less than H2 made from natural gas with carbon capture and storage in all modeled markets by 2030. This report presents our updated view of renewable hydrogen costs.