Denmark consults on green hydrogen price, seeing Eur2/kg by 2030

Denmark has opened a consultation with industry on future green hydrogen prices with a scenario seeing costs around Eur2/kg ($2.36/kg) by 2030, Energinet.dk said Aug. 17.

The state-owned gas and power grid operator is calling for industry insight by Sept. 3 to qualify its assumptions used in models and analyses to expand the energy system of the future, it said.

"In order to get the best possible forecast, we are now asking the industry to provide its input so that we get qualified future hydrogen prices," Energinet's project manager for analysis assumptions Marie Louise Lund said adding that this was the first such consultation.

Estimating developments up to 20 years into the future adds great uncertainty, the manager said adding that a "best bet estimate" was needed to analyze when electrolysis plants will run and how much hydrogen can be produced with the process impacting power demand and prices itself.

Flexible consumption and new ways of balancing the electricity grid could become very important in an energy system largely based on wind and solar, Lund said.

Scenario framework

The consultation is based on the 2021 scenario framework (analysis assumption AF21) by regulator Danish Energy Agency, it said.

Hydrogen prices for AF21 are estimated based on long-term production costs of hydrogen (LCOH) in a non-grid-connected standalone configuration, it added.

Future hydrogen price calculations are based on the projected power mix based on Denmark's wind and solar capacity trajectory.

Compared to last year's AF20 scenario, the updated assumptions assume a slightly lower cost to produce hydrogen falling from Eur2.98/kg in 2022 to Eur2.62/kg by 2025.

S&P Global Platts cost-based assessment for renewable hydrogen uses front-month wholesale power as an input.

Platts assessed September 2021 Netherlands PEM electrolysis hydrogen including capex at Eur7.63/kg on Aug. 16, the most expensive in its range of Dutch hydrogen assessments.

Denmark, which already has Europe's highest share of wind in the power mix, plans to further expand offshore capacity with focus on power-to-X applications such as hydrogen.

The country has a strong project pipeline for green hydrogen projects with over 2 GW proposed by 2030, according to Platts Analytics hydrogen asset database.

Orsted alone is involved in 3 GW of projects across Europe often involving offshore wind, the world's leading offshore wind developer said Aug. 12.

Focus for the 2030s will be on two energy islands in the North and Baltic Sea that may host electrolyzers turning offshore wind into hydrogen or derivatives.