Green Hydrogen Cost-Competitive by 2030: Driving Decarbonization in Heavy Industries
Key Ideas
  • By 2030, green hydrogen is expected to be cost-competitive, with production costs dropping significantly to around US$2.5/kg, making it an attractive solution for decarbonizing hard-to-abate industries.
  • Advancements in electrolyzer efficiency, decreasing renewable energy prices, and economies of scale will drive the reduction in Levelized Cost of Hydrogen (LCOH) to approximately US$1/kg by 2050.
  • Key electrolyzer producers like ITM Power, Siemens Energy, and Plug Power, as well as supporting technology vendors such as Danfoss and Schneider Electric, will play a vital role in reducing capital and operational expenditure.
  • Heavy industries like steel, aviation, and shipping are poised to adopt green hydrogen to fulfill net-zero commitments. Accurate cost forecasts are crucial for scaling up adoption and identifying market potential.
The article discusses the impending cost competitiveness of green hydrogen by 2030 as a pivotal solution for decarbonizing challenging sectors like steel, aviation, and shipping. ABI Research projects a significant drop in the Levelized Cost of Hydrogen (LCOH) from the current US$6-7/kg to about US$2.5/kg by the end of the decade, further decreasing to US$1/kg by 2050. This cost reduction will be propelled by advancements in electrolyzer efficiency, declining costs of renewable energy, and the realization of economies of scale. Major players in the electrolyzer market such as ITM Power, Siemens Energy, and Plug Power, in addition to technology vendors like Danfoss and Schneider Electric, are expected to play critical roles in driving down capital and operational costs. The transition towards green hydrogen is anticipated to help industries align with their net-zero goals. ABI Research underscores the importance of accurate cost assessments to facilitate the widespread adoption of green hydrogen and to pinpoint lucrative market opportunities. The insights are sourced from ABI Research's report, 'The Economic Viability of Green Hydrogen for Industry and Enterprises', part of its Smart Energy research service.
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