This topic is very trendy, given the whole energy crisis situation, but companies had already been looking at hydrogen as a potential substitute for natural gas even before things got tough in Europe. These companies knew that the price of natural gas depended on hands that weren’t theirs, which is why they looked at hydrogen with affection. Green hydrogen, of course, as grey hydrogen wouldn’t be suitable in this case due to the associated carbon dioxide emissions and the lack of control over the raw material.
Evidently, the price of conventional (fossil) hydrogen today is very much related to that of natural gas, primarily because the main process for obtaining hydrogen is from natural gas (Steam Methane Reforming, SMR). Therefore, if natural gas prices rise or fall, grey hydrogen prices will do so proportionally.
For an industrial company that consumes natural gas for thermal processes, the question isn’t just how much renewable hydrogen should cost but also how much the equipment change will cost and how long it will take to recoup the investment. If we take a reference value of 30 EUR/MWh for natural gas, for renewable hydrogen to be attractive to the company, it would need to cost around 1 EUR, but that’s without considering the associated benefit of no longer emitting CO2, which might allow for that euro to increase slightly or to recoup the investment faster. In any case, green hydrogen at 1 EUR/kg is very difficult, but if you buy more expensive natural gas, it might be worth it.
The answer isn’t simple, but we pose a question to the industrial company: What price would you be willing to pay for the security of controlling your fuel gas prices (as well as guaranteeing supply) for the next 20 or 30 years? And if we add the competitive advantage of decarbonizing your production process? It sounds better and better, right?
Did you find this interesting? Do you have a similar issue? We’re sure we can help.
Write to us at info@leanhydrogen.whdev.es or call us at +34 619 952 889 and ask for Eugenio. Visit our website to find all blog entries and much more: www.leanhydrogen.com
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