Green hydrogen prices will remain stubbornly high for decades
Green hydrogen has been touted by politicians and business leaders alike as a key fuel for a carbon-free future. But it will remain far more expensive than previously thought for decades to come, according to a new estimate from BloombergNEF.
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Hydrogen companies worldwide are already struggling with canceled projects and sluggish demand. In the US, billions of dollars of projects have been stalled waiting for President Joe Biden’s administration to issue final rules for a tax credit meant to spur production.
BNEF had in the past forecast steep declines in the price of green hydrogen, which is made by splitting it from water with machines called electrolysers running on renewable power. But in its forecast published Monday, the firm more than tripled its 2050 cost estimate, citing higher future costs for the electrolysers themselves. BNEF now forecasts green hydrogen to fall from a current range of $3.74 to $11.70 per kilogram to $1.60 to $5.09 per kilogram in 2050.
For comparison, the most common form of hydrogen used today — stripped from natural gas, with the carbon emissions vented into the atmosphere — costs from $1.11 to $2.35 per kilogram, according to BNEF. The research firm expects prices for such “gray” hydrogen to remain largely the same through mid-century.
“The higher costs for producing green
