The company also determined that, as electrolyser capital expenditure will fall by 35-65 per cent over the next ten years, most markets will be capable of achieving sub $US2/kg green hydrogen by 2040.
However, Flor Lucia De la Cruz, the senior research analyst at Wood Mackenzie, estimates that “substantial investments are required to accommodate the anticipated growth for the global low-carbon hydrogen market”.
The demand for hydrogen is expected to grow exponentially. Current projections indicate that global low-carbon hydrogen demand will increase from below 1 million tonnes (Mt) today to 223Mt. This will be driven by ammonia in the initial stages; however, it is anticipated that power will be the primary demand sector by 2050, at 31 per cent of total demand.
From 2030, Wood Mackenzie predicts that there will be an increase in hydrogen co-fired with natural gas, particularly in Europe.
“Green hydrogen is expected to dominate the pipeline, with Australia leading in green hydrogen supply, holding 47 per cent of supply by 2029,” Bridget van Dorsten, Research Analyst at Wood Mackenzie, said. “Post-2030, we expect to see supply quickly ramp up worldwide, and China becomes the largest supplier in the late 2040s.”
Low-carbon hydrogen is essential to achieving a net-zero economy. It will help transform the energy, transportation and heavy industries sectors. However, funding and technology will influence the rate at which low-carbon hydrogen production will become commercially viable.
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