Arup East Asia Energy, a multinational firm located in the United Kingdom, expressed that hydrogen must attain at least $3 to $5 per kilogram price to be recognized as a competitive fuel source.
According to a report from the Manila Bulletin, Arup East Asia Energy Business Leader Peter Thompson projected a potential 30% cost reduction in hydrogen by 2030, mainly due to the decreasing costs of renewables and the expansion of its production.
The anticipated cost decline is to lower the current price of approximately $45 per kg, specifically for green hydrogen production.
A study revealed that blue hydrogen, which was created from gas or methane integrated with carbon capture and storage (CCS) technology, is currently priced at less than $15 per kg, while gray hydrogen, generated from gas or methane without CCS, is currently at a scale below $10 per kg.
Thompson also highlighted infrastructure systems, such as pipelines and proposed on-site hydrogen production combined with offshore wind technologies, as potential investment models that could ultimately reduce hydrogen costs to competitive levels.
He further explained that hydrogen, stored in liquid or gaseous states, could be transported through pipelines, including from the proposed hydrogen hubs in the Asian market.
As for the Philippines, the executive mentioned that leveraging the existing infrastructure of the country’s LNG industry as a pipeline support facility could enable the country to achieve economies of scale in transporting hydrogen to areas with demand.
Regarding on-site hydrogen production, he emphasized that traditional grid connection challenges could be alleviated, especially if hydrogen initiatives are aligned as a storage system in synergy with offshore wind development.
Discussing the challenges and opportunities in the Philippines, Thompson highlighted the country’s benefits considering its geographical location.
He suggested that while piping gas between different islands would be beneficial, grid connection complexities pose challenges, particularly in regions like the Visayas, where strong wind exists but grid connectivity is weak.
He proposed that tying hydrogen projects with other industries, like steel making, to create demand would be essential to avoid high costs.
