Great report published by McKinsey & Company on H2. Definitely worth reading. Our H2 team at AMEA Power continue to build on the green H2 momentum and focus on every aspect of the value chain in order to get the LCOH as low as practically possible. #greenenergy #greenhydrogen #egypt #mauritania #djibouti Ignacio Carreras Sánchez - Granjel Prasad P V
McKinsey & Company published their latest Hydrogen Insights on behalf of Hydrogen Council on Dec. 2023 Executive Summary: Hydrogen will play a crucial role in decarbonizing hard-to-abate sectors enable the at-scale transport of energy to resource-constrained regions, and enable a clean and resilient energy system. Its deployment is at an inflection point – on one hand there are tailwinds such as a growing and gradually maturing pipeline of projects and supportive decarbonization regulation. On the other hand there are headwinds: cost increases, project delays continued regulatory uncertainty and higher financing costs The project pipeline is growing, with over 1,400 projects announced across all regions, equaling USD 570 billion investments and 45 Mt/year of clean hydrogen supply announced through 2030. Europe shows the largest number of projects 540 followed by North America 248 A quarter of projects with known commissioning date has progressed past final investment decision representing 7% of the total announced investments. Investments are maturing with USD 110 Bio in FEED and beyond (up from USD 75 billion), with 60% growth in investments undergoing FEED. Electrolysis deployment globally has shown similar growth passing the 1 GW mark with about 12 GW capacity having passed FID The regulatory landscape overall is evolving. For instance, support is materializing via production tax credits and financial support for hydrogen hubs in the US, #renewablehydrogen mandates in the #RenewableEnergy Directive (RED III) in Europe, or contracts for difference in Japan. However, regulatory uncertainties remain, such as the definition of requirements to receive the US Inflation Reduction Act PTC and the implementation of #rediii in #eu member states, implying these policies have not yet fully impacted the market. The clean hydrogen industry is facing headwinds. Costs and cost expectations have risen substantially, particularly for renewable hydrogen. The estimated levelized cost of producing #greenhydrogen #LCOH is about 4.5 to 6.5 USD/ kg if built today, up by 30% to 65%. Multiple factors have caused this increase – higher labor and material costs, higher cost for building the balance of #electrolyzer plants 3-5% points higher cost of capital and an increase of renewable power cost by more than 30% However the cost of producing renewable hydrogen is expected to decline to 2.5 to 4.0 USD/kg towards 2030, driven by advancements in #electrolyser technology manufacturing economies of scale, design improvements, and reduction in renewable power cost The headwinds have caused a slower development of the global hydrogen industry than had been previously expected. Such hurdles are reflected in, for instance, a 10% drop in announced clean hydrogen supply through 2025 Concerted action of industries and governments will likely be needed to further global clean hydrogen growth, facilitating additional decarbonization Osama Fawzy Georgy HENEIN, MBA
Developing Green Hydrogen & Carbon Credits Projects
9moThats a good one with solid data! Real H2 production costs figures and interesting insights on the amount of projects that progress after Feasibility Study stage