C-MACC Hydrogen Weekly Update 22
The Region That Wants Hydrogen the Most Can Least Afford It
- Weekly Theme: Hydrogen By Country
- News Update
- Projects Update
- Ammonia/Methanol Update
- Power Update
- Next Week: Competing With US Blue
- We revisit hydrogen economics again this week, as many of the COP28 delegates believe hydrogen to be the right path and as Europe and others commit to expensive infrastructure in anticipation.
- Even if Europe chooses to allocate renewable power at cost to hydrogen projects, the cost of making the hydrogen is high; valuing power at prevailing market prices makes investments very unattractive.
- Although higher than in the recent past, US power prices remain more attractive, yet still drive unattractive hydrogen costs if local alternative power values are used versus power costs.
- The US 45V credit works for power prices in the 6-8 cent per kWh in the US, but with residential power prices so much higher, giving hydrogen cheap power penalizes the consumer if the power is fungible.
- Pockets of low-cost power will work in Europe and the US – idled wind power for example and hydro. If you could stack and trade credits in the US for power and hydrogen that might help – not yet!
Exhibit 1: What hydrogen would cost if it competed with residential power in the US.
Source: Capital IQ and C-MACC Analysis