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On the cost competitiveness of blue and green hydrogen

Abstract

Despite the cost reductions of green hydrogen, it is uncertain when cost parity with blue hydrogen will be achieved. Beyond technology costs, electricity and natural gas prices, hydrogen’s competitiveness will be increasingly determined by carbon costs or regulation associated with its life-cycle emissions. Theoretically and numerically, we demonstrate that higher residual emissions of blue hydrogen can close its competitive window much earlier than the cost parity of green hydrogen suggests. In regions where natural gas prices remain substantially higher (∼40 EUR/MWh) than before the energy crisis, such a window is narrow or has already closed. While blue hydrogen could potentially bridge the scarcity of green hydrogen, uncertainties about the beginning and end of blue hydrogen competitiveness may hinder investments. In contrast, in regions where natural gas prices drop to ≤15 EUR/MWh, blue hydrogen can remain competitive until at least 2040, contingent upon achieving rigorous CO2 capture (>90%) and negligible methane leakage rates (<1%).)

Category

Academic article

Client

  • Research Council of Norway (RCN) / 333151

Language

English

Author(s)

Affiliation

  • Potsdam Institute for Climate Impact Research
  • SINTEF Energy Research / Gassteknologi
  • Paul Scherrer Institute
  • The Australian National University
  • Western Sydney University

Year

2024

Published in

Joule

ISSN

2542-4351

Volume

8

Issue

1

Page(s)

104 - 128

View this publication at Cristin