New research is exploring the cost of using green hydrogen as an alternative to fossil fuel. According to a group of engineers from the University of New South Wales (UNSW) Sydney, the current possible price range is from $2.89 to $4.67 per kilogram. However, to make green hydrogen competitive with fossil fuel production, the most ideal minimum price point would be $2.50. To achieve this price range, the researchers demonstrated a scenario using a dedicated solar system that would produce green hydrogen, meaning that no fossil fuels would be needed to supply electricity.
A set of parameters was studied in order to determine the final price range, which includes the cost of electrolyzer and solar photovoltaic (PV) systems, electrolyzer efficiency, available sunlight, and the size of the installations.
Nathan Chang, a postdoctoral fellow at UNSW’s School of Photovoltaic Renewable Energy Engineering, explains that it was more feasible to generate a range of prices than a single calculated number. He says that, when estimating the costs of developing technology, the calculations are mostly based on assumptions that are usually limited to very specific circumstances.
“But here, rather than getting a single calculated number, we get a range of possible numbers,” Chang noted. “And each particular answer is a combination of a lot of possible input parameters.”
Different values are inputted into an algorithm—such as the most recent data on the cost of PV systems in Australia as well as other countries—which result in a range of prices of hydrogen energy. After generating these prices, the researchers examined how certain cases were able to significantly lower their minimum price.
Rahman Daiyan of the ARC Training Centre for Global Hydrogen Economy and UNSW’s School of Chemical Engineering revealed that particular parameters stood out.
“Capital costs of electrolyzers and their efficiencies still dictate the viability of renewable hydrogen,” he shared. “One crucial way we could further decrease costs would be to use cheap transition metal-based catalysts in electrolyzers. Not only are they cheaper, but they can even outperform catalysts currently in commercial use.”
To create a more detailed picture, the team determined the optimum size of the PV system for each location and used actual weather data. Jonathan Yates, an undergraduate student at UNSW who developed the system and cost simulation model, shared how this impacts the economics in different locations around the world.
“We knew that each location that would install such a system would be different—requiring different sizes and having to wear different costs of components. Combining these with weather variations means that some locations will have lower cost potential than others, which can indicate an export opportunity.”
One example he shared was with the case of Japan, where both the size of systems as well as solar resources remain limited. “So there is potentially a significant cost difference when compared to the spacious outback regions of Australia, which have plenty of sunlight,” Yates added.
The researchers envision large-scale hydrogen energy plants becoming cheaper in the near future. When they recalculated the cost of hydrogen using other existing projections of electrolyzer and PV costs, green hydrogen costs can still go as low as $2.20 per kg by 2030. This is on par with, or can even be cheaper than, the cost of producing hydrogen from fossil fuels.
“With technology improvements in electrolyzer efficiency, an expectation of lower costs of installing these types of systems, and governments and industry being willing to invest in larger systems to take advantage of economies of scale, this green technology is getting closer to being competitive with alternative fossil fuel production of hydrogen,” said Daiyan.
This puts Australia in a particularly advantageous position with its abundant solar resources.
The study can be found in Cell Reports Physical Science.
For more news and stories, check out how green hydrogen is powering a more sustainable future here.