Hydrogen Economy Update

C-MACC Hydrogen Weekly Update 13

IEA Projections Fail To Recognize The Near-Term Hurdles

• Weekly Theme: Not Enough Scale To Lower Costs
• News Update
• Projects Update
• Ammonia/Methanol Update
• Power Update
• Next Week: E-Fuels – Too Soon?

Key Points

• Given our coverage of cost, permitting, and power challenges facing hydrogen, we are not surprised to see a slowdown in general news and new projects and slower progress on announced projects.
• Assumptions for 2030 in the recent IEA study of hydrogen costs assume meaningfully lower power costs and equipment scale efficiencies – neither of which is evident today or looks likely soon.
• We will not get the equipment scale efficiencies if we do not build the equipment, and the momentum today has the industry moving in the wrong direction to achieve that – alarm bells should be ringing.
• But the IEA work shows one very clear economic reality: capacity factor for electrolyzers is critical, and with so many projects backed by wind and solar, delays are inevitable because the math fails.
• None of the objectives suggested in the IEA study will be met unless the current momentum can be reversed, and as most of it is focused on costs, power, or electrolyzers, subsidies will need to rise.