Researchers from the Harvard Business School and the University of Mannheim Business School have suggested that hydrogen is poised to accelerate the global energy transition.
Green hydrogen has considerable potential to reduce greenhouse gas emissions in industries that are difficult to decarbonise, including heavy-duty transportation, energy-intensive manufacturing, and long-term energy storage. “Widespread adoption of hydrogen, however, is widely considered to depend on substantial cost declines of power-to-gas technologies,” explained Professor Gunther Glenk.
The new study, which Glenk co-authored with Philip Holler and Professor Stefan Reichelstein, has estimated how quickly gains are made for different hydrogen technologies. Based on global observations of installed power-to-gas systems, the authors have projected that the life-cycle cost of clean hydrogen production will likely fall in the range of US$1.6 – 1.9/kg by 2030, a decline from about US$3 – 5/kg
Recognising the potential of hydrogen as a decarbonised energy source, governments around the world have recently introduced sizeable regulatory initiatives and subsidy programmes for the development, manufacturing, and deployment of hydrogen equipment. The US Department of Energy (DOE) also articulated the prominent Hydrogen Shot initiative in 2021. According to this initiative, the cost of producing clean hydrogen can come down to US$1.0/kg by 2030.
Investors are often sceptical of ambitious targets for sustainable energy set by governments and international bodies trying to reach net zero. But this new research shows that industry trends are achieving a level approaching, though not quite achieving, the US$1.0/kg cost target set by the US DOE.
“Once you have deployment in place, you can get cost reductions. With cost reduction, there’s more deployment because more applications become financially attractive, which then leads again to more deployment and cost reduction. It’s a virtuous cycle that can change the game,” commented Glenk.