Analysis by Peter Roberts
It is well understood, by everyone everyone except the Coalition government in Canberra, that solar PV and wind are now cheaper than coal-fired electricity, the result of rapidly falling equipment prices.
In fact in some countries, including Australia, green power is cheaper than gas.
Now a new study suggests that hydrogen produced from renewable sources is headed down the same path.
The study, Green hydrogen production costs in Australia: implications of renewable energy and electrolyser costs, compared future costs of electrolysis powered by renewables and by fossil fuels.
The crucial question here is whether hydrogen from renewables can be produced at a cost which will make it economically as well as environmentally attractive in the manner achieved by wind and solar PV.
The Australian National University researchers, T Longden, F Jotzo, M Prasad and R Andrews, said: “Over recent years the cost of electricity from solar PV and wind have fallen dramatically, and further reductions are expected.
“Cost reductions are also being realised for electrolysers.”
Remember the up-front capital costs for solar PV installations fell by 79 per cent in the decade to 2019, and by 24 per cent for onshore wind generation.
Every $10/MWh fall in electricity costs cuts the cost of green hydrogen by $0.47/kg.
With renewables prices falling, the main cost factors for green hydrogen are the cost of electrolysers which separate the atoms of water into hydrogen and oxygen, and capacity utilisation rates.
They conclude that the cost of green hydrogen could be at or below $3/kg in the near future, and that the ‘stretch goal’ of $2/kg is likely.
The biggest savings are with wind power which has a higher capacity utilisation rate of 45 compared to solar PV.
This study is significant because the federal government has recently funded a new wave of hydrogen research, which in the words of the Coalition government is ‘technologically agnostic’.
This is code for funding research into producing hydrogen from coal and other sources, generally coupled with some form of carbon capture and storage.
Yes, they just won’t give up on coal mining, no matter how worrying is the continuing rise in global average temperatures from burning fossil fuels.
As the study concludes: “Australia is well placed to achieve low-cost green hydrogen production due to its low-cost renewable energy supply and the potential to achieve large economies of scale.”
But it won’t be done without more funds being wasted on chasing the mirage of hydrogen produced from coal.
The researchers work at the Centre for Climate and Energy Policy (CCEP) in the Crawford School of Public Policy at the ANU.
Picture: Tonsley Innovation Precinct Adelaide is home to Australia’s biggest hydroliser
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