The commercial rollout promise of hydrogen to debut in global markets will largely depend on cost downtrend of the technology as well as future innovative improvements on electrolyzers.THE HAGUE – Significant cost downtrend and further improvements in technological innovation are warranted before hydrogen could gain headway for commercial rollout into markets, according to multinational energy giant Royal Dutch Shell.
For this emerging technology to turn cost-competitive on the pockets of consumers, Wood indicated that the price must go down to the level of $1.0 per kilogram, “which is the number a lot of people are targeting; and it would be nice if it’s a little bit under that – or within that kind of range.” He, nevertheless, reiterated that the niggling industry question is “how quickly it is going to grow? First, for hydrogen to be economically viable at scale, costs need to fall significantly – it has to fall by an order of magnitude.”
But with all the geopolitical and economic challenges confronting the world as integrated in the ‘Archipelagos scenario’ of the company, Wood noted that “those things happen much more slowly – costs would just gently fall and the premium for green fuel does not rise quite quickly.” In terms of demand, the company forecasts that under the Sky scenario, hydrogen growth will be two exajoules per year in the 2040s; which is five times compared to the rate factored in into the Archipelagos scenario.