Where will it be cheapest to produce green hydrogen? IEA's new interactive data tools show some surprising results
Agency’s new levelised cost of H2 map shows that world's windiest locations will produce cheaper hydrogen than the sunniest
New data tools from the International Energy Agency (IEA) indicate that it will be cheaper to produce green hydrogen in some of the windiest locations in the world in 2030, rather than those blessed solely with abundant solar resources.
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The analysis suggests that the best wind speeds can be paired with even middling solar PV resources to bring costs down below solar-only systems by 2030.
The website maps out the LCOH against a base set of capex and opex assumptions for solar, onshore wind and electrolysis, which are then varied depending on location — and illustrated via a graded colour code (without specific location-by-location data).
According to the graded colour-coded key, the cheapest locations were in northern China and southern Argentina — where hydrogen can be produced at close to $1.5/kg — the former most likely on account of rock-bottom capex and opex costs, and the latter on account of some of the world’s best wind resources.
Solar-rich India and western Sahara in Africa also featured as locations where it is possible to produce hydrogen at around $2/kg, while the most expensive places were Japan and Russia's eastern provinces, where the colour code indicated prices of over $4/kg.
Capex costs for wind power are higher than for solar (the IEA’s base assumptions were up to $1,025/kW for solar and $2,840/kW for wind) and even the IEA’s base opex assumptions for wind are more than triple those for solar, coming in at up to $75/kW compared to up to $23/kW for PV. It does not appear to include subsidies.
But electrolysis utilisation is massively increased when it is paired with a combination of solar and wind.
“This holds true even for some excellent solar PV locations in Northern Africa and Australia as long as wind capacity factors are sufficiently high.”
Chile, Australia, Spain and Namibia are usually touted as potential hydrogen production hotspots on account of their abundant renewable resources, especially solar. However, while the IEA showed hydrogen production in Chile at around $2/kg, on a par with India and the UK, Australia appeared to be lagging behind slightly.
Significantly, when the capex assumptions for onshore wind and solar on the interactive tool are increased by 25% it makes only marginal difference to the LCOH in northern China and Argentina, suggesting that the resources are either too proficient or the capex costs already too low to be affected.
The tool is one of a pair developed by the IEA with Germany’s Institute of Energy and Climate Research in Jülich.
Where are the projects located?
Shortly after the launch of the IEA’s tools last week, the European Commission’s executive vice-president for the European Green Deal, Maroš Šefčovič also announced the EU’s intention to publish and regularly update a map of existing and planned hydrogen facilities, to increase transparency and “give potential suppliers and consumers greater clarity”.