The Hydrogen Economy #69
All Roads Lead to Hydrogen? Well, Maybe Some.
Key Points
- While we see pockets of hydrogen investments aimed at transport, it is important to note that in every case the hydrogen-based solution is much higher cost that fossil fuel-based costs and simply using electric power.
- The hope that hydrogen costs will come down is largely based on green hydrogen costs falling, which means power costs falling – this continues to support electric power as the lower cost fuel for transport.
- We see plenty of small projects, especially in Europe for hydrogen as a transport fuel, but there will need to be many hundreds more to create any sort of grid that would allow for point to point versus hub and spoke use.
- Electric power still seems to be the path of least resistance for transport, as power is already distributed and grids can handle intermittent power more easily that hydrogen production; plus, fewer capital investment steps.
- We look at only four new projects, all in Europe, and three of which are firmly focused on transport. We also look at continued strength in ammonia, while other chemicals markets weaken, and a possible power panic.
Exhibit 1: We see plenty of articles supporting FCEVs, but in every case, there is an assumption that hydrogen costs will fall meaningfully. It is also worth noting that the assumptions that make hydrogen costs lower also take power costs lower – so the blue bar would fall further out of reach.
Source: Autotech News
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