BAKU, Azerbaijan, July 11. A total of $4 trillion of investments in the green hydrogen value chain is needed by 2050 to be able to trade about 36 percent of the overall green hydrogen flow, Trend reports via the International Renewable Energy Agency (IRENA).
As IRENA estimates, this volume is essential for the deployment of 10.3 TW of renewable capacity, 4.4 TW of electrolysis, and 1.6 TWh of batteries.
According to the publication, this amount is relatively small, compared to the volume of investments required in the wider energy system, considering the fact that hydrogen would represent about 12 percent of final energy demand. “This estimate, however, is only the lower bound since the model used is greenfield, meaning it assumes all the infrastructure is new, and it uses the 2050 costs to estimate the total investment. In reality, the investment will happen over time, with part of the capacity being deployed at higher costs.”
Meanwhile, the hydrogen production cost is expected to decrease drastically in the upcoming decade - the investment cost of electrolyzers by at least 40 percent in the short term. “When combined with the ongoing decrease in the cost of renewable electricity should lead to a level below $2/kgH2 within the next decade. This will largely depend on the specific electricity cost for a location, but multiple governments and initiatives have announced explicit production cost targets,” the publication said.
“This degree of hydrogen trade will be subject to the global willingness to implement a 1.5°C pathway, recognize the value of green hydrogen in reducing carbon emissions and consequently scale up investments in all parts of the supply chain, from solar and wind to electrolysis, new hydrogen pipelines, retrofitted natural gas pipelines and ammonia shipping infrastructure. Innovation will also be crucial to bringing down the cost of green hydrogen and hydrogen trade infrastructure,” the IRENA concluded.