UC Irvine analysis finds renewable hydrogen sector could reach price parity with conventional fuel by mid- to late 2020s
The California Energy Commission has released a UC Irvine roadmap for the buildout and deployment of renewable hydrogen production plants in California to support policy decisions and inform stakeholders.
The study concludes that, with appropriate policy support, the renewable hydrogen sector can reach self-sustainability (price point at parity with conventional fuel on a fuel-economy adjusted basis) by the mid- to late-2020s.
The roadmap defines actions needed to support an optimal deployment of renewable hydrogen production plants needed to meet the growing demand for renewable hydrogen. The analysis builds upon insights from early market development and a series of analyses developed for the roadmap on current and future technology costs, feedstock supply and cost, siting and factory buildout, and demand growth.
The roadmap effort developed several scenarios for the growth in renewable hydrogen demand through 2050. Although transportation is expected to be the primary source of demand for renewable hydrogen, petroleum refining, power generation and storage, heat, industrial processes, and ammonia production are all additional sources of potential demand. This analysis projects a high-case demand for renewable hydrogen of more than 400 million metric tons per year in 2030 and more than 10 times that amount in 2050.
Costs incurred from the production plant through the hydrogen refueling station were analyzed using the HDSAM 3.1 tool developed by Argonne National Laboratory augmented with a learning-curve forecast of cost-reduction potential.
The analysis projects plant gate-to-dispenser costs to decline from around $16 per kilogram (excluding subsidies and credits) at present to a midpoint estimate of $6 by 2025, declining to below $5 by 2050 with a low-end estimate of $4 per kilogram. The biggest factor in the cost decline is increased station utilization (fuel dispenses as a fraction of full capacity) with economies of scale and technology progress also contributing.
The analysis also found that the dispensed price of hydrogen is likely to meet an interim target based on fuel-economy-adjusted price parity with gasoline of $6 to $8.50 per kilogram by 2025. Furthermore, reaching the long-term DOE target of $4 per kilogram is within the forecast band for 2050, but the base forecast is around $5 per kilogram.
Reed, Jeffrey, Emily Dailey, Brendan Shaffer, Blake Lane, Robert Flores, Amber Fong, G. Scott Samuelsen (2020) Roadmap for the Deployment and Buildout of Renewable Hydrogen Production Plants in California. CEC. Publication Number: CEC-600-2020-002