There are no doubts. Green hydrogen is trendy. On all the continents, we find initiatives from several countries that want to have their strategic position globally.
Many hydrogen valleys have also appeared all over the world, and at the same time, several countries have huge demand.
Now, the geostrategy will be a key factor for all the regions that want to develop their hydrogen policy.
Regarding the profitability of green hydrogen, among other factors, maybe the two key factors are the cost of electricity or LCOE if we consider the useful life of the renewable assets and the transportation of these complicated molecules.
The main consumption usually takes place for the main petroleum companies (hydro treatments or hydrocracking). And they use the same hydrogen that they get in the same perforations (grey hydrogen).
It will be mandatory to select the best locations where the rest of the technologies could be competitive enough and for processes with a huge demand for base load.
The famous target price is 2 to 2.5 USD/kg, which is too challenging if we want to get these ranges of prices with green hydrogen (produced only with renewables).
The Role of PV Technology in the Electrolysis Process
Following a business model, to complete a regression of which parts from the LCOH (levelized cost of hydrogen), it will show us the target price of the electricity (LCOE) to get this price of hydrogen or LCOH (the famous 2 USD/kg).
This key price will be between 20 and 25 USD/MWh. No doubt, it is too challenging.
With current green technologies, these ranges of prices could be reached only with solar power plants and applying an economy of scale counting with huge power plants.
In addition, to avoid any extra risk, the best formula is the integration of these big solar power plants within the same process of electrolysis as part of the supply chain. The producers can’t depend on the external supplies coming from any PPA, subject to price variations.
As mentioned before, transportation is another key issue that needs to be solved. To reduce the cost, it will be mandatory to count on good byproducts (more competitive than shipping) and, if possible, install electrolysis plants beside the places of consumption.
For this reason, all the countries interested in participating in these technologies should identify their key markets and be as competitive as possible.
Then, what will happen with other technologies within electrolysis processes?
It will be mandatory to select the best locations where the rest of the technologies could be competitive enough and for processes with a huge demand for base load.
They will be related to later processes after getting the hydrogen (ammonia, biofuels, and blending), where the demand will condition the production.
This is the main limit of PV energy: its availability. As in almost all industrial processes, a homogeneous supply will be necessary, and in these cases, the weakness of solar energy is evident.
Then, the main question to count will be to select the best option for each need. There is not only a global solution.
As a good professor of mine said in the past, “We have to select the species for the environment and not the environment for the species.”
