Green hydrogen production costs in Australia: implications of renewable energy and electrolyser costs

Abstract

A crucial question in the development of a hydrogen industry is whether green hydrogen, made using renewable energy, will be able to be produced at a cost that makes it attractive compared to hydrogen produced from fossil fuels. The main factors are the cost of electricity and the cost of electrolysers, together with capacity utilisation rates. Over recent years the cost of electricity from solar PV and wind have fallen dramatically, and further reductions are expected. Cost reductions are also being realised for electrolysers. In this note, we compile recent cost estimates and projections to provide plausible ranges for the production cost of green hydrogen. We find that the cost of green hydrogen could readily be at or below A$3/kg in the near future, and that the "?stretch goal' of A$2/kg mentioned in Australian strategy documents is likely to come into reach, possibly rapidly. Show more