Recent EU hydrogen strategy aims for 2x40 GW electrolyser deployment by 2030. Half within the EU, half in neighboring countries like Morocco and Ukraine.
What will EU hydrogen strategy mean for electrolyser prices? A minithread 👇👇👇 (1/7)
What will EU hydrogen strategy mean for electrolyser prices? A minithread 👇👇👇 (1/7)
1) Assuming alkaline electrolysers
2) Using nel-Nikola deal with $350/kW as a reference point, realized in 2023
3) Applying 17% learning rate
Gives $112-136/kW by 2030, depending on deployment targets. (2/7)
2) Using nel-Nikola deal with $350/kW as a reference point, realized in 2023
3) Applying 17% learning rate
Gives $112-136/kW by 2030, depending on deployment targets. (2/7)
By coincidence, these prices reminded me of batteries, another storage technology with a learning rate of ~18%. Plotting indexed prices shows similar pathways. But I believe that my electrolyser curve is not steep enough. (3/7)
In February I argued that at $250/kW electrolysis can compete with fossil fuel hydrogen. With EU targets, this price point will be reached in 2025! This might open new, unsubsidised markets outside of EU. (4/7)
So if the EU fulfils its targets, and new demand from outside materialises, by 2030 we could see <$100/kW electrolyser prices.
What’s the likelihood of this scenario? China is in this game too. Let that speak for itself. (5/7)
What’s the likelihood of this scenario? China is in this game too. Let that speak for itself. (5/7)
Is this enough to kickstart a hydrogen revolution?
It’s certainly a good start. However, electricity price is the main cost driver of green hydrogen. Projected capex reductions will be crucial to going below 2$/kg H2. But to compete with fossil fuels, you need to go below $1/kg!
It’s certainly a good start. However, electricity price is the main cost driver of green hydrogen. Projected capex reductions will be crucial to going below 2$/kg H2. But to compete with fossil fuels, you need to go below $1/kg!
Ultimately, the thing to remember is that electrolysers don’t compete in a vacuum. They face internal market competition from grey and blue tech, but also external pressure from direct electrification and energy efficiency. More on that…soon. Very soon. (7/7)
