Solar power costs in the best Asia Pacific locations are already cheap enough for $2/kg green hydrogen production or lower, Philippe Malbranche, assistant director-general of International Solar Alliance, told delegates at Reuters' Energy Transition Asia Pacific event Dec. 1.
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Power inputs make up two-thirds of the price of renewable hydrogen produced via electrolysis, with solar and wind costs holding the key to achieving cost parity with conventional hydrogen.
"Depending on the country, location and irradiation, you can reach a [solar output] price of $0.01-$0.1.2/kWh," Malbranche said.
Now the onus is on getting the cost of the electrolyzer down in order to obtain renewable hydrogen in the range of $1.5-$2/kg, according to Malbranche.
"One-third [of the cost of hydrogen production] is coming from the electrolyzer that's why we still have to improve a lot of the economics of the electrolyser," he said, calling the low solar prices a "game changer."
This eventuality was already being forecast in indicative prices from various pilot and demonstration projects for renewable hydrogen, another panelist said.
In Australia, where S&P Global Platts launched hydrogen price assessments in August, prices being tracked showed periods of negative costs due to surplus renewable energy output, Anton Ferkov, hydrogen and ammonia pricing specialist at Platts, said.
"In South Australia on some days if you would be producing hydrogen through the alkaline pathway, you would be slightly negative," he said.
In November an Indian solar power project bid Rupees 2.86/kWh ($0.038/kWh) into an auction, an industry member said. This was higher than the Rupees 1.99/kWh recorded earlier in the year, the lowest seen in India, and before rising commodity prices put pressure on project economics.
In January 2020 the Qatar Electricity and Water Corporation announced it had awarded an 800 MW solar PV tender at $0.0157/kWh, underlining the Middle East's potential competitiveness in future hydrogen export markets, according to a report from International Renewable Energy Agency.
By 2050 hydrogen will comprise 18% of the global gas mix, said Namiko Murayama, group manager of green hydrogen for Thyssenkrupp Uhde Chlorine Engineers (Japan) Ltd., who was moderating the panel.
S&P Global Platts assessed South Australia hydrogen produced via alkaline electrolysis at A$3.75/kg Dec. 1, up 37.9% from Nov. 1. Western Australia hydrogen produced via SMR and with CCS was assessed at A$6.9/kg Dec. 1, up 27.31% from Nov. 1.
The International Solar Alliance, based in Gurugram, India, is a grouping of countries with the objective to deploy more solar energy and reduce dependence on fossil fuels. It was conceived as a joint effort by India and France on the sidelines of COP21 in Paris. At present, 101 countries are signatories to the ISA Framework Agreement, of which 80 countries have submitted the necessary instruments of ratification to become full members of the ISA.