MANY MINDEDGreen hydrogen cost model shows path to industrial viability
University of Groningen researchers calculated green hydrogen production costs at €7.2–7.3/kg for a 200 MW electrolyzer model in the Rotterdam-Rijnmond industrial cluster using renewable power purchase agreements and hybrid electricity supply. This levelized cost of hydrogen (LCOH) remains financially unviable without additional support, with long-term revenue guarantees essential for large-scale projects. Monte Carlo simulations indicate a 15-year hydrogen contract for difference (CfD) could reduce the probability of negative net present value from 100% to 6% for renewable-integrated configurations.
The French government’s draft 2027 budget law targets over €5 billion in private investment for hydrogen projects through three mechanisms: a double-auction for synthetic sustainable aviation fuels (e-SAF), an incentive to reduce fuel carbon intensity, and a €1.2 billion tranche of the Hydrogen Support Mechanism. Twelve French projects currently represent over 800,000 tonnes of annual e-SAF production capacity and more than €14 billion in potential investment, which could mobilize 3.4 GW of electrolysis capacity—40% of the National Hydrogen Strategy’s 2035 target.
This cost trajectory and project momentum could make green hydrogen competitive with gray hydrogen for industrial applications, potentially lowering energy costs for heavy industry and transport. Real-world deployments like hydrogen fuel cell reachstackers in Rotterdam and trucks at Milan airports demonstrate immediate traction. However, the French projects remain planned capacity, not operational, and the €5 billion target covers only private investment—public funding is unspecified. The 15-year CfD scenario is a model projection; actual bankability depends on implementation terms.
Source: pv magazine