Price of green hydrogen might fall to €5 kg by 2025

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Aurora Energy Research asserts in a recent analysis that solar and wind power plants paired with electrolyzers might maximize the profitability of green hydrogen projects.

In terms of decarbonization and future energy supplies, green hydrogen is regarded as indispensable. The hydrogen economy is still in its infancy, but according to the German government, generation capacity will reach 10 GW by 2030.

According to the German consulting firm Aurora Energy Research, hydrogen projects with a total output of 21 GW have been declared in Germany, but only a portion of them have been implemented. The analysts anticipate that by 2050, the industry will require up to 300 TWh of green hydrogen.

They hypothesized that by 2025, the average cost of producing green hydrogen using renewable energy sources will reduce to approximately €5 per kilogram. In addition, they predicted industrial purchasers would not be willing to spend more than €5 per kilogram in the coming years. However, they anticipate that renewable hydrogen imports would continue to lower costs after 2030. Nevertheless, transport infrastructure such as ports and pipelines must be established first.

At rates greater than €5 per kilogram, Aurora Energy Research has established that the combination of solar and onshore wind farms is the most profitable choice. To achieve optimum project viability, however, wind and solar parks must be linked with modest electrolyzers for the production of green hydrogen. The combination of 50 MW of wind power, 50 MW of PV, and 20 MW of electrolysis, according to Aurora Energy Research, results in the lowest production costs for green hydrogen.

Analysts hypothesized that if green hydrogen is produced through power purchase agreements, without direct co-location with a renewables facility, manufacturing prices may likewise exceed €5 per kilogram.

Nedim Husomanovic

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