An executive from Oklahoma based Williams said there interstate pipelines that could safely move a mixture of gas and up to 20% hydrogen and a quote from Chad Zamarin, a Senior Vice President at Williams, we have an opportunity to scale up a hydrogen economy with the technology that already exists today in our infrastructure.
At a Senate hearing this week, lawmakers questioned representatives from the energy sector on the feasibility of blending hydrogen with natural gas and whether the government needs to establish a regulatory scheme to allow them to do so. He writes, Congress is examining whether the nation's existing natural gas pipeline system should be used to move hydrogen enabling its use as a transportation fuel. Next, in an article from the Houston James Osbourne writes, Congress explores possibility of moving hydrogen through existing gas pipelines. And so because of that, I'm really glad to see that there are some market analysts that are beginning to incorporate that risk into their hydrogen market analysis. And that is when dealing with hydrocarbons in this mixture, you do have to incorporate some price volatility, and that increases your risk. Talked about this previously in the past, and it holds true more now than ever before. The other point that I want to highlight in this article, and was highlighted at the end by Meredith Annex, is that industrial players may still see higher demand for green hydrogen as a hedge against future gas market volatility. That means that the cost they're looking at is green hydrogen, which in this case makes it appropriate to not include blue hydrogen, as its feedstock price makes it extremely cost prohibitive. The first is that this is a levelized cost of hydrogen, but specifically looking at alkaline electrolyzer technology. But I think there are two critical things in this article that need to be looked at more in depth. And that's really not a surprise since Europe is paying roughly six to seven times more for natural gas than we are here in the United States. Okay, so some quick information but some good information on hydrogen becoming competitive price wise in Europe. She ends by saying yet industrial players may see higher demand for green hydrogen as a hedge against future gas market volatility.
This is again according to Annex, explaining that European gas prices will likely fall again later this decade, making green hydrogen less competitive on an energy equivalent price basis.
Compared to Western alkaline technology, now using PEM to produce hydrogen would make clean fuel less competitive with current natural gas prices in Europe. proton exchange membrane equipment is more expensive, adding a price premium of 11 to 17%. Chinese alkaline electrolyzers are currently the cheapest equipment for making green hydrogen in the market and would allow hydrogen projects to compete the most effectively with current natural gas prices. By contrast, solar is the cheapest source and Turkey in the United Arab Emirates. And according to Bloomberg NEF modeling, onshore wind is the cheapest source of electricity to power electrolyzers in all European countries. According to Bloomberg Nef, Meredith Annex, this reflects the comparably better renewable resources in southern Europe. The analyst found cheapest hydrogen and the European Union could be produced in Sweden and Italy, while Germany and Poland would have the highest levelized cost of production. That being said the same does not hold for China, the US and the United Arab Emirates, where gas prices are significantly lower. This according to the data provided by Bloomberg Nef to PV magazine. Natural gas prices are currently higher than the levelized cost of hydrogen using alkaline electrolyzer technology on an energy equivalent basis in the UK, Sweden, Italy, Spain, France, Poland and Germany. In an article from PV Sergio Mata Lucci writes, gas prices are higher than levelized cost of hydrogen for several technologies in Europe. My name is Paul Rodden, and welcome to the hydrogen podcast. Those are the questions that will unlock the potential of hydrogen and this podcast will give you the answers. So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where is capital being deployed for hydrogen projects globally? And where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. And Toyota has a big announcement for light duty trucks. Hydrogen is now cheaper in Europe than natural gas.
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