Hydrogen Economy

There is Plenty of Interesting Hydrogen Demand – At the Right Price
July 2, 2024
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The Hydrogen Economy #53

There is Plenty of Interesting Hydrogen Demand – At the Right Price

Key Points

  • There is insufficient high-priced demand today to rekindle interest in a hydrogen market that is mostly on pause as developers and potential off-takers wrestle with a huge current cost–value gap.
  • Some smaller projects for green hydrogen will go ahead globally, supporting pockets of high-value demand, but questions will inevitably be raised around some of the high-cost Europe projects, especially as politics evolve.
  • Blue is the answer for almost all large-volume needs today. Decarbonizing existing grey capacity in the US offers a lower cost than building new blue capacity if you assume the existing facility is fully depreciated.
  • Despite all these points, we show three very competitive hydrogen projects this week (not in Europe), the strong fundamentals for cheap grey ammonia in the US, and discuss why we need nuclear power.

Exhibit 1: Most of the likely large-volume demand for hydrogen sits in the low-cost quadrant of the chart.

Source: Capital IQ and C-MACC Analysis

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