Bloomberg News reports that clean hydrogen prices are expected to drop to the cost equivalent to that of liquefied natural gas within the next ten years. The efforts and measures for replacing fossil fuels across the globe are expected to get aggressive further, and this was revealed by the biggest gas infrastructure operators in Europe.
Thomas Baudlot, the chief executive officer for energy solutions associated with Engie SA, responsible for Asia pacific for the French utility, stated in an interview that today green hydrogen might not be competitive economically in contrast to the alternative sources of energy. But the same will not be the case in the next ten years. It may be mentioned here that fuel has been a strategic part of Engie.
Interest in hydrogen which is regarded as green since it is produced with the help of electricity from renewable sources like solar and wind energy is increasing amidst a global effort to cut the dependence on natural gas and coal, which was found to intensify following the ongoing war between Russia and Ukraine in February. The war has disrupted energy supplies and increased costs significantly.
While clean technology is in its early stages, as many as 35 countries have a hydrogen plan in the pipeline. Seventeen nations are preparing one, thereby aiding in curbing the price of electrolyzers required for producing the fuel, as per BloombergNEF.
The demand for replacing costly fossil fuels with renewable energy is accelerating in Asia following the energy crunch globally. Engie’s plans for expansion in Asia include marketing green hydrogen to customers, while Australia will be the production hub.
In the past month, Engie was found taking a decision related to the final investment in the Yuri renewable hydrogen project in Western Australia’s Pilbara region. The first phase is expected to get over in 2024. The company plans to expand in the Philippines and Malaysia when regulations are favorable, as stated by Baudot.
Bloomberg News reports that liquefying hydrogen has always presented a dilemma. This is because it needs a considerable amount of energy, is an expensive process, and consumes more than 30% of the fuel’s energy, per the United States Department of Energy. Aside from that, the fuel is not as dense as LNG. As such, transportation of it at scale would require creating a fleet of ships, advanced technology, and infrastructure.
Due to the above limitations, Bloomberg NEF anticipates that the cost of liquefying and transportation of green hydrogen to Japan from Australia towards the end of the decade might be around $30 per million British thermal units. This is almost three times the cost of an identical shipment of LNG as per a long-term contract from an export facility in Australia, although not far off from the current spot rates.
