Coloring By Numbers: Cutting Through Selective & Misleading Data

C-MACC Hydrogen Weekly Update 1

Coloring By Numbers: Cutting Through Selective & Misleading Data

This hydrogen service is intended to provide perspective on a very fast-moving market. An average of 10 new hydrogen projects have been announced each week for the last few years, with the IEA database adding 1100 new initiatives between its 2020 and 2022 surveys. The pace has not slowed in 2023. But many of the announcements lack substance, and many more lack any explanation around why the economics might work. Others are just concepts that will require too many things to go right for them to make sense. Our goal with this work is to make sense of the noise, provide updates on technological advances and breakthroughs, and focus on what is happening that will move the needle.

Key Points

• The Green hydrogen projects that are most likely to move forward quickly are small, and they fit in two buckets, grant-funded and proof of concept, or target niche markets where customers will pay.
• Large-volume blue hydrogen projects are economical in the US and can compete with grey if all the stars align. Delays in Class 6 permits continue, but if approved, we expect a step up in capex.
• Willingness to pay is a significant issue for clean hydrogen/ammonia/methanol, as all initiatives that do not involve very efficient CCS in the US will lead to higher costs – even with incentive structures.
• Large green projects – Kazakhstan, Spain, Australia, and the Middle East – all need abundant renewable power additions that will likely increase competition for materials and keep prices rising.
• We question whether it is too soon for large-scale green hydrogen and whether stretched renewable power sources might have higher value-in-use outlets for many years.