Platts updates capex figures used in its hydrogen cost calculations

Platts, part of S&P Global Commodity Insights, has made several updates to its capital expenditure figures used in the calculations of cost of production for most of its global hydrogen and ammonia assessments as part of a yearly review of the Platts hydrogen methodology, effective March 1, 2024.

The capital costs ($/KW) for the production pathways of proton exchange membrane (PEM) electrolysis, alkaline electrolysis, autothermal reformation (ATR) with carbon capture and sequestration (CCS) and steam methane reforming (SMR) with and without CCS, have been updated as shown in the table below.

With this update, Platts reflects recent inflation and changes in financing costs based on industry sources, including publications from the United States Federal Reserve, the European Commission, and Australia's Commonwealth Scientific and Industrial Research Organization (CSIRO). These updated capital expenditure and financing costs are based on industry input and feedback, replacing the model-based approach as the clean hydrogen market begins to take shape.

In addition, the Sustainable Aviation Fuel (SAF) and Renewable Diesel cost of production calculations reflect the cost of the renewable distillates based on the yields of a biorefinery, produced via the HEFA or Hydrotreated Esters and Fatty Acid pathway. Updates to hydrogen price input therefore may have an impact to these calculated prices. The hydrogen prices used in the SAF and renewable diesel cost of production calculations are: Hydrogen California SMR w/o CCS (incl CAPEX), Hydrogen Netherlands SMR and Japan Hydrogen SMR w/o CCS Inc. Capex.

The updated capital costs will impact the hydrogen assessments as given in an example below. The SMR costs decline in the Netherlands due to decrease in the SMR capital costs while electrolyzer-based PEM and alkaline costs rise on the back of an increase in electrolyzer capital costs.

All values for NW Europe (Netherlands), with CAPEX, without EU ETS costs: