Hydrogen Economy

The Biden $1 per KG Hydrogen Target, Causing More Problems Than It Solves
May 21, 2024
This Week:
Funding Electrolyzers Because Expectations May Be Unrealistic
Next Week:
Feedback from the hydrogen conference – see below

The Hydrogen Economy #47

The Biden $1 per KG Hydrogen Target, Causing More Problems Than It Solves

Key Points

  • The enthusiasm behind cheaper green hydrogen relatively quickly shows the Biden Administration’s ambition, but it may drive its failure because of electrolyzer overinvestment and overall project delays.  
  • Overinvestment in electrolyzer capacity, supported by grants and tax incentives, will leave too many companies chasing too little business – few will get economies of scale, and many will likely fail as cash runs out.
  • As potential hydrogen users see lower cost projections from the Administration, they are reluctant to support current projects with long enough take or pay contracts for the projects to get funding; this slows progress.
  • Graham Copley will attend the World Hydrogen North Americas conference in Houston this week to represent Issaquena Green Power and discuss C-MACC work in hydrogen and associated industries. 

Exhibit 1: This chart shows IRENA estimated green hydrogen cost reductions to create cost parity with grey hydrogen and areas where costs need to fall – we view the largest two areas in the exhibit as being the most at-risk.

Source: Electric Hydrogen – Based on IRENA analysis

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