Earlier this month, the DOE hosted its first "Hydrogen Shot Summit". The target for the "Shot" is to reduce the cost of producing low carbon hydrogen to $1 for 1kg in 1 decade (one kg of hydrogen provides approximately the same energy as 1 gallon of diesel). Currently, costs are generally estimated to be in the range of $2.50-$6.00/kg. At a high level, there are three primary levers for reducing production costs for green hydrogen (blue hydrogen which uses carbon capture technology is another discussion):
1) CapEx - reducing the cost of equipment used in the production process, most commonly a piece of equipment called an electrolyzer which breaks water into hydrogen and oxygen.
2) Energy - reducing the cost of renewable energy (e.g. hydro, solar and wind) used to power the equipment.
3) Efficiency - reducing the amount of renewable energy required to produce each kg of hydrogen.
Separate from production, costs associated with the distribution of hydrogen will also need to be addressed to accelerate adoption.
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