Recent research by the Dutch organization TNO sheds light on the cost dynamics of green hydrogen production, revealing potential challenges in achieving cost competitiveness with fossil-based hydrogen.
TNO’s report, funded by the Ministry of Economic Affairs and Climate Policy, presents sobering insights into the current cost landscape of green hydrogen production. Contrary to expectations, the average levelized cost of large-scale production facilities stands at over €13 per kilogram of hydrogen. This figure significantly exceeds previous estimates and underscores the formidable economic hurdles facing the green hydrogen industry.
Achieving cost parity with fossil-based hydrogen is crucial for the widespread adoption of green hydrogen. However, TNO’s findings highlight a substantial disparity between current green hydrogen costs and the €1-2 per kilogram threshold necessary for competitiveness. This gap poses a significant challenge for the sector, potentially impeding its ability to secure market share and scale production effectively.
The discrepancy between projected and actual costs underscores the complexity of green hydrogen production and the need for further technological and infrastructural advancements. While ambitious targets exist for hydrogen cost reduction, TNO’s data suggests that current industry efforts may not be sufficient to meet these objectives within the expected timelines.
TNO’s report offers a critical reality check for stakeholders in the hydrogen energy sector. While green hydrogen holds immense promise as a clean energy solution, its economic viability remains a pressing concern. Industry benchmarks and standards must be recalibrated in light of TNO’s findings, prompting a reevaluation of existing strategies and investment priorities.
