The cost of hydrogen from photovoltaic sources is expected to drop to € 0.7 and € 1.8 / kg by 2030 – pv magazine International


The cost of green hydrogen could reach between 0.7 and 1.8 € / kg by 2030 and between 0.3 and 0.9 € / kg by 2050, according to a European research team led by the ‘University LUT. Scientists have found that the discounted cost of hydrogen (LCOH) could drop from around 0.031 to 0.081 € currently to 0.02 to 0.05 € by 2030 and 0.01 to 0.027 € by 2050.

A group of European researchers led by the Lappeenranta University of Technology (LUT) sought to estimate the capital (CAPEX) and operating expenses (OPEX) of large-scale solar-powered hydrogen electrolysis for the next three decades and predicted that the cost of green fuel could drop from ” around € 0.031 to € 0.081 currently at € 0.02 to € 0.05 by 2030 and € 0.01 to 0.027 by 2050.

“We are seeing unprecedented growth in green hydrogen due to the huge pull on the demand side to go for real solutions and a massive drop in the cost of green hydrogen at the service level. public, driven by electrolysers and solar photovoltaic panels at very low prices “, professor of solar economics LUT Christian Breyer said pv magazine. “Huge business opportunities present themselves right now, for companies and countries alike, but only smart industry and policy makers will benefit.”

The expected drop in costs will be the result of a simultaneous drop in the prices of large-scale PV-powered electrolysis and the CAPEX of solar itself, according to their analysis, which was based on historical learning rates ( LR) for both technologies and a series of different growth scenarios. “The discounted cost of hydrogen (LCOH) is calculated for five European sites and five non-European sites with different levels of solar irradiation and several rates of weighted average cost of capital (WACC)”, they specified.

The set of locations includes Helsinki, Finland; Munich, Germany; Toulouse, France ; Rome, Italy; Malaga, Spain; Rajasthan, India; El Paso, Texas, United States; Western Australia; South Africa; and the Atacama Desert in Chile.

Solar

The average CAPEX for large-scale solar has been calculated according to three different scenarios: a rapid growth scenario in which it is expected to increase from around € 0.047 / kWh currently to € 0.027 / kWh in 2030 and € 0.013 / kWh in 2050; a basic growth scenario in which this value should increase to € 0.031 / kWh in 2030 and € 0.019 / kWh in 2050; and a slow growth scenario where it only reaches € 0.036 / kWh in 2030 and € 0.025 / kWh in 2050.

Scientists assumed that each year the average price of modules can decrease by 25% or more, and the average efficiency of modules improves by 0.4%. The OPEX in 2020 was estimated at 9.4 € / kW per year and it is assumed to decrease by 10% LR per year.

Electrolysis

Regarding large-scale electrolysers, the researchers found that the CAPEX in the rapid growth scenario could increase from € 400 / kW in 2020 to € 230 / kW in 2030 and € 60 / kW in 2050. In addition, they expect this price reduction to reach 260 € / kW in 2030 and 80 € / kW in 2050 in a baseline growth scenario and 280 € / kW in 2030 and 130 € / kW in 2050 in a scenario of slow growth.

“The peak efficiency of alkaline electrolyzers is 67%, which is supposed to increase by 0.3% per year to reach 76% by 2050,” the group explained. “The costs of the catalysts are not considered critical as nickel is the most common electrocatalyst in the alkaline electrolysis of water.”

LCOH

By calculating the LCOH, the research team assumed that a photovoltaic installation is oversized compared to the input power of the electrolyzer in a ratio of 1.33. In this configuration, the electrolysers have 33% more full load hours (FLH) compared to the PV efficiency in each location. A degradation of 2% in the first year and an annual degradation of 0.5% are estimated for the efficiency of the photovoltaic plant and an annual degradation of the efficiency of between 0.10 and 1.50% is assumed for the electrolyser. .

The academics clarified that the current LCOH of solar hydrogen is currently at its lowest level of € 0.031 / kWh in Chile’s Atacama Desert, which is the region with the highest level of solar radiation in the world, and the highest value of € 0.081 / kWh in Helsinki, which is the region with the lowest radiation among the selected locations. “By 2030, LCOH will decrease by about 33% and 67% by 2050,” they said. “It should be noted that the cost of electricity generated by photovoltaics already represents around 63% of LCOH, and will increase to around 74% by 2050. This suggests that the electrolyser’s CAPEX will not play a major role in the future development of LCOH. “

According to the researchers, the LCOH will drop between € 0.020 and € 0.054 / MWh or € 0.7 and € 1.8 / kg by 2030 and € 0.010 and € 0.027 / MWh or € 0.3 and € 0.9 / kg by 2050. This decade, solar hydrogen will globally be a cheaper fuel compared to hydrogen produced from natural gas with carbon capture storage, ”they concluded. “The world’s best solar resource sites are today achieving full competitiveness of green hydrogen versus methane-based fossil hydrogen, even without fossil carbon capture“, added Breyer.”The days of clothing and greenwashing are over and large industries, such as the steel industry, the chemical industry, shipping and aviation must come up with real transition strategies to react to massive political pressure. and investors. “

Their conclusions and the associated methodology are described in the article “The true cost of solar hydrogen”, published in Solar RRL. The research team is made up of scientists from LUT, the Basque Alliance for Research and Technology (BRTA) in Spain, Italian research institute Eurac, the Joint Research Center (JRC) of the European Commission and the Becquerel Institute in Belgium.

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