Mercedes Mullins
Hydrogen fuel is a promising alternative energy source that has the potential to reduce greenhouse gas emissions and combat climate change. Unlike conventional fuels, hydrogen is typically measured in kilograms instead of litres or gallons, and its cost can vary depending on factors such as production method and location. Currently, the cost of hydrogen fuel differs across regions, with prices ranging from $3 to $16 per kilogram in the United States and between £10 and £15 per kilogram in the United Kingdom. Various initiatives and advancements in technology are driving efforts to reduce the cost of hydrogen fuel and improve its viability as a clean energy alternative.
| Characteristics | Values |
|---|---|
| Hydrogen fuel cost in the USA | $13-$16 per kilogram |
| Hydrogen fuel cost in the UK | £10-£15 per kilogram |
| Hydrogen fuel cost in California | $14 per kilogram |
| Cost of hydrogen produced by electrolysis | $3-$6 per kilogram |
| Cost of hydrogen produced by conventional methods | $1.50 per kilogram |
| DOE's Hydrogen and Fuel Cell Technologies Office's target cost of clean hydrogen | $1 per kilogram by 2031 |
| Interim target set by DOE | $2 per kilogram by 2026 |
| Loop hydrogen cost | £2.27 per kilogram |
| Projected cost of hydrogen production by British companies Source Energie and ERM Dolphyn by 2040 | £1.50 per kilogram |
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What You'll Learn
Hydrogen fuel costs in the UK
The cost of hydrogen fuel in the UK is dependent on the levelised cost of hydrogen production technologies, which is the average cost over the lifetime of the plant per MWh of hydrogen produced. This reflects the cost of building and operating a generic plant for each technology.
The UK government has outlined its net-zero strategy, meaning that money is being invested in research into clean hydrogen. The government has also backed a £9 billion investment into the development of the hydrogen sector. This is part of a 2021 UK government plan to create a world-leading hydrogen economy, aiming to create more than 9,000 UK jobs and unlock £4 billion in hydrogen investment by 2030.
The UK's Electric Car Grant is now open to hydrogen fuel cell vehicles priced below £37,000, which meet strict emissions, warranty, and manufacturing criteria.
The primary challenge for hydrogen fuel in the UK is the lack of infrastructure. Hydrogen filling stations are expensive to build, and there are currently only 15 refuelling stations nationwide. However, the UK government and the EU are backing a drive to increase the number of stations available. Hydrogen developers H2 Green and Element 2 want to create a UK-wide network of 800 hydrogen refuelling stations for HGVs by 2027, rising to 2,000 by 2030, with car access also available.
If the UK can successfully develop hydrogen-fuel vehicles and infrastructure, it could create a hydrogen economy with fuel costs below today's petrol and diesel prices.
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Hydrogen fuel costs in the US
Hydrogen fuel is measured in kilograms instead of litres or gallons. In the US, hydrogen fuel costs around $16 per kilogram, though prices vary widely, ranging from $8.50/kg to $16.51/kg. In California, hydrogen fuel generally costs about $25 per kilogram, which is equivalent to $14/gallon.
The high cost of hydrogen fuel is a barrier to its widespread adoption. Hydrogen fuel cell vehicles (FCVs) are zero-emission vehicles that comply with California's ZEV mandate and internal combustion engine ban. However, the high fuel cost of hydrogen due to its unique physical properties is a challenge for FCVs.
The production, storage, and distribution of hydrogen are more expensive than traditional fuels. The cost of hydrogen fuel is influenced by the method of production, with unsustainable methods like brown hydrogen synthesis via coal gasification being cheaper than green hydrogen produced using renewable energy and resources. As sustainable technologies become more popular and competitive, the price of green hydrogen is expected to decrease.
The cost of hydrogen fuel per kilogram is projected to decrease in the future due to various factors. Firstly, increased hydrogen production will increase supply, leading to lower prices. Secondly, advancements in electrolyser technologies and reductions in renewable energy costs will contribute to lower prices. Additionally, the development of infrastructure and refueling stations for hydrogen-powered vehicles will enhance the competitiveness of hydrogen fuel.
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Hydrogen fuel production methods
Hydrogen fuel is measured in kilograms instead of litres or gallons. In the UK, hydrogen fuel costs motorists between £10 and £15 per kilogram. In the US, it costs around $16 per kilogram. Currently, renewable hydrogen produced via electrolysis costs between $3 and $6 per kilogram, though this figure is expected to decrease significantly over the next decade.
The US Department of Energy (DOE) has outlined its research and development priorities to achieve the cost targets for clean hydrogen set by the Biden administration. The DOE aims to significantly reduce the cost of zero-emission hydrogen by targeting a price of $1 per kilogram by 2031.
Hydrogen fuel can be produced through several methods. The most common methods are natural gas reforming (a thermal process) and electrolysis. Steam methane reforming is a type of natural gas reforming that accounts for nearly all commercially produced hydrogen in the United States. In this process, hydrogen is produced from a chemical reaction between steam and methane, the main component of natural gas. However, producing one tonne of hydrogen through this process emits 6.6–9.3 tonnes of carbon dioxide. When carbon capture and storage are used to remove a large fraction of these emissions, the product is known as blue hydrogen.
Electrolysis is a process that splits hydrogen from water using an electric current. It is commonly used in high school science classes to demonstrate chemical reactions and hydrogen production. On a large, commercial scale, the process may be referred to as power-to-gas, where power is electricity and hydrogen is gas. Electrolysis itself does not produce any byproducts or emissions other than hydrogen and oxygen. The electricity for electrolysis is currently provided by the electric power grid, which is supplied with a mix of renewable sources, nuclear energy, and fossil fuels.
Other methods of hydrogen production include solar-driven and biological processes. Solar thermochemical hydrogen production uses concentrated solar power to drive water-splitting reactions, while biological processes use microbes such as bacteria and microalgae to produce hydrogen through biological reactions.
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Hydrogen fuel storage and transportation
Hydrogen fuel is an alternative fuel with a variety of production pathways. The cost of hydrogen fuel is a significant barrier to its widespread adoption, as it is currently more expensive than traditional fuels. However, prices are expected to decrease with advancements in technology and increased production volume.
The cost of hydrogen fuel includes production costs, as well as the costs of infrastructure for delivery, dispensing, and storage. In California, the price of hydrogen fuel has been around $14-$16.50 per kilogram in recent years, with a price of $25 per kilogram at some refuelling stations. At this higher price point, it would cost about $135 to fill up a standard car, making it uncompetitive with gasoline-fueled vehicles.
To address the high costs of hydrogen fuel, particularly for heavy-duty transportation, there are ongoing efforts to reduce production costs and improve the efficiency of delivery. In the United States, the Department of Energy (DOE) has outlined research and development priorities to achieve cost targets for clean hydrogen, including improvements in electrolyzer technology and the development of hydrogen storage and transportation solutions for heavy-duty vehicles.
Additionally, there is a focus on reducing the costs associated with hydrogen refuelling stations, such as compressors, dispensers, and on-site storage. As more hydrogen production plants are built, delivery distances and costs are expected to decrease. Innovations in compressor technology, such as lowering the required pressure for hydrogen fuelling, are also contributing to cost reduction.
Overall, the high costs of hydrogen fuel storage and transportation are being addressed through a combination of increased investment, technological advancements, and infrastructure development. These efforts aim to make hydrogen a more viable and sustainable alternative to traditional fuels, particularly in the heavy transportation sector.
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Hydrogen fuel retail price trends
Unlike conventional fuels, hydrogen is measured in kilograms instead of litres or gallons. In the UK, hydrogen fuel generally costs motorists between £10 and £15 per kilogram. Loop hydrogen, based on a large-scale Loop installation, has a typical levelized cost of around £2.27/kg. By 2040, a project by British-based renewables company Source Energie and electrolysis pioneer ERM Dolphyn is expected to produce hydrogen at a cost of around £1.50/kg.
In the USA, hydrogen costs around $13 to $16 per kilogram. In California, hydrogen has retailed for approximately $14.00 per kilogram (equivalent to $14/gallon gasoline) since 2014. In 2021, hydrogen retailed at $16.50/kg, which is three times higher per mile than a gasoline hybrid and two times higher than a conventional gasoline vehicle.
The US Department of Energy (DOE) has outlined its research and development (R&D) priorities to achieve cost targets for clean hydrogen. The DOE aims to significantly reduce the cost of zero-emission hydrogen by targeting a price of $1/kilogram by 2031, with an interim target of $2 per kilogram by 2026. Currently, hydrogen produced by electrolysis can cost at least $5 per kilogram, or up to $12 per kilogram when accounting for delivery and fueling station costs. Conventional hydrogen production from natural gas costs about $1.50 per kilogram but comes with a significant carbon footprint.
The cost of hydrogen fuel is expected to decrease significantly by 2050, with an increasing number of governments investing in technology and infrastructure to reduce costs.
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Frequently asked questions
The cost of hydrogen fuel varies across the world. In the UK, hydrogen fuel costs motorists between £10 and £15 per kilogram. In the USA, hydrogen costs around $16 per kilogram. In California, hydrogen has retailed for approximately $14 per kilogram since 2014.
The cost of hydrogen fuel is influenced by production, delivery, and fueling station costs. Hydrogen produced by electrolysis can cost at least $5 per kilogram, or up to $12 per kilogram when accounting for delivery and fueling station costs. Conventional hydrogen production from natural gas costs about $1.50 per kilogram but has a significant carbon footprint.
The cost of hydrogen fuel is expected to decrease in the future. The US Department of Energy (DOE) aims to reduce the cost of zero-emission hydrogen to $1 per kilogram by 2031, with an interim target of $2 per kilogram by 2026. Analysts expect the cost of renewable hydrogen produced via electrolysis to drop significantly over the next decade. By 2040, a project in the UK converting a Celtic Sea wind farm into a green hydrogen production site expects to produce hydrogen at a cost of around £1.50/kg.
