On the cost competitiveness of blue and green hydrogen

Ueckerdt, Falko; Verpoort, Philipp; Anantharaman, Rahul; Bauer, Christian; Beck, Fiona; Longden, Thomas; Roussanaly, Simon

doi:10.1016/j.joule.2023.12.004

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On the cost competitiveness of blue and green hydrogen

Authors

/persons/resource/Falko.Ueckerdt

Ueckerdt, Falko
Potsdam Institute for Climate Impact Research;

/persons/resource/philipp.verpoort

Verpoort, Philipp
Potsdam Institute for Climate Impact Research;

Anantharaman, Rahul
External Organizations;

Bauer, Christian
External Organizations;

Beck, Fiona
External Organizations;

Longden, Thomas
External Organizations;

Roussanaly, Simon
External Organizations;

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https://doi.org/10.5880/pik.2023.007
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Ueckerdt, F., Verpoort, P., Anantharaman, R., Bauer, C., Beck, F., Longden, T., Roussanaly, S. (2024): On the cost competitiveness of blue and green hydrogen. - Joule, 8, 1, 104-128.
https://doi.org/10.1016/j.joule.2023.12.004

Cite as: https://publications.pik-potsdam.de/pubman/item/item_29269

Abstract

Despite the cost reductions of green hydrogen, it is uncertain when cost parity with blue hydrogen will be achieved. Beyond technology costs, electricity and natural gas prices, hydrogen’s competitiveness will be increasingly determined by carbon costs or regulation associated with its life-cycle emissions. Theoretically and numerically, we demonstrate that higher residual emissions of blue hydrogen can close its competitive window much earlier than the cost parity of green hydrogen suggests. In regions where natural gas prices remain substantially higher (∼40 EUR/MWh) than before the energy crisis, such a window is narrow or has already closed. While blue hydrogen could potentially bridge the scarcity of green hydrogen, uncertainties about the beginning and end of blue hydrogen competitiveness may hinder investments. In contrast, in regions where natural gas prices drop to ≤15 EUR/MWh, blue hydrogen can remain competitive until at least 2040, contingent upon achieving rigorous CO2 capture (>90%) and negligible methane leakage rates (<1%).