Green hydrogen is set to become competitive with existing grey hydrogen in five key markets by the end of the decade, according to BloombergNEF.
This year has seen the levelised cost of hydrogen rise slightly. This is down to inflation, higher financing costs in some markets and longer construction times. A fall in natural gas prices, meanwhile, has benefited blue hydrogen, keeping it as the most competitive low carbon option on the market today. The average levelised cost of blue hydrogen was found to be 59% cheaper than green hydrogen for projects financed in 2023.
However, green hydrogen’s charge is coming. By 2030, new green hydrogen plants will be able to undercut existing grey hydrogen plants in Brazil, China, Sweden, Spain and India, before then undercutting grey hydrogen in over 90% of markets by 2035. It will also undercut blue hydrogen earlier than planned, with 2028 the date when green hydrogen will be cheaper than blue using Chinese alkaline electrolyers. Western electrolysers will then follow suit in 2033.
