Is The Juice Worth the Squeeze? Rarely For Power

The Hydrogen Economy #81

Is The Juice Worth the Squeeze? Rarely For Power

• News Update
• Projects Update
• Ammonia/Methanol Update
• Power Update

Key Points

• US electric power producer initiatives to lift the capabilities to co-fire hydrogen in methane-fired turbines face an array of challenges in terms of being cost competitive and meaningfully reducing power sector emissions.
• We look at global natural gas prices, provide a broad hypothetical view of these values compared to hydrogen on an mmbtu basis, and show our return on capital views comparing hydrogen prices and green power costs.
• We discuss two Chinese natural gas fired electric power generation plants that recently came online with the ability to co-fire up to 50% hydrogen, with the stated focus more on potential emission reductions than cost.
• We also highlight a few global hydrogen projects announced during the past week, most on a pilot scale, and we also highlight recent developments and global spot price movements in ammonia and methanol YTD.

Exhibit 1: Substantial amounts of carbon-free hydrogen is needed to decarbonize power plants; worth the high cost?

Source: : Institute for Energy Economics & Financial Analysis (IEEFA), SS&A Power Consultancy GMbh, February 2025