#United States #London #ABI Research #Green Hydrogen #LCOH

Green Hydrogen Production Costs Expected to Fall

Green hydrogen is quickly becoming recognized as a vital component in the effort to decarbonize industries that have been historically difficult to cleanse of carbon emissions. Yet, the high cost of production, commonly referred to as the Levelized Cost of Hydrogen (LCOH), has remained a barrier to larger investments and higher demand for green hydrogen until now.

Recent predictions from ABI Research, a prominent global technology intelligence firm, indicate that by 2030, the costs for producing green hydrogen will drop to a competitive US$2.5 per kilogram, substantially undercutting more polluting alternatives. Further decreases are expected to bring this figure down to US$1.80 by 2040, primarily due to advancements in renewable energy prices. For context, current LCOH estimates range between US$6 and US$7 per kilogram, signaling a significant shift towards affordable green hydrogen solutions.

Increased efficiencies in electrolyzer technologies—key components in green hydrogen production—are anticipated to be a major contributor to these cost reductions. Notable players in this space, such as ITM Power, Plug Power, and Siemens Energy, are expected to drive down capital expenditure (CAPEX) through enhanced production efficiencies. Additionally, companies like Danfoss and Schneider Electric will help to lower operational expenditures (OPEX) through innovative solutions.

By 2050, the LCOH for green hydrogen is expected to reach around US$1 per kilogram as the market continues to evolve and mature. The anticipated price decrease holds considerable implications for heavy industries, which contribute significantly to greenhouse gas emissions. According to ABI Research analyst Daniel Burge, the ability to accurately predict production costs will hold immense value for these sectors.

As aviation, steel, shipping, chemicals, and petrochemical industries grapple with decarbonization mandates, the timing and development of market demands for green hydrogen become critical. Investment decisions will hinge on the reach of LCOH, dictating when various industries can transition to this cleaner energy source effectively.

The findings detailed in ABI Research's report, The Economic Viability of Green Hydrogen for Industry and Enterprises, form part of a broader analysis on the future of energy in industrial applications. As green hydrogen becomes more accessible, it stands to enable companies and nations to meet their sustainability targets, striving for net zero emissions in the face of a climate crisis.

In conclusion, as we stand on the brink of a green hydrogen revolution, industry leaders must be acutely aware of market developments to leverage these shifts effectively. The anticipated cost decline not only presents an opportunity for cleaner energy but also for fostering a more sustainable industrial landscape moving forward.