New Delhi: Renewable energy resources, comprising 65-85 % of hydrogen production costs, are poised to shape the future of green hydrogen, according to a report by Alvarez & Marsal.
By 2030, solar tariffs in the UAE, Saudi Arabia, Egypt, Chile, and India are expected to dip below USD 20/MWh, while wind energy tariffs could fall under USD 30/MWh in Saudi Arabia, Egypt, the US, and India.
The report projects a significant decrease in electrolyzer system costs from less than 1 GW of current global installations to around 400 GW by 2030, driven by both global and country-specific advancements. India, alongside the US, Europe, and the Chinese mainland, is anticipated to become a major player in cost-competitive electrolyzer manufacturing.
Currently, electrolyzer costs stand at USD 735–945/kW but are expected to reduce to USD 310–440/kW in seven years, factoring in learning curve effects. Optimizing renewable energy configurations could further push down green hydrogen production costs, with hybrid tariffs for the UAE and Saudi Arabia potentially falling below USD 20/MWh by 2030.
The Alvarez & Marsal report also highlights the role of financing costs and currency depreciation in the economics of green hydrogen. Countries with lower financing costs such as the UK and Australia will likely have a cost advantage.
In contrast, higher financing costs will place countries like Egypt and Argentina at a disadvantage. Meanwhile, India and Chile could benefit from depreciating exchange rates, potentially slashing the levelized cost of green hydrogen by up to 17 %.
