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The first Energy Earthshot, launched June 7, 2021—Hydrogen Shot—seeks to reduce the cost of clean hydrogen by 80% to $1 per 1 kilogram in 1 decade ("1 1 1” ).

The Hydrogen Shot establishes a framework and foundation for clean hydrogen deployment in the American Jobs Plan, which includes support for demonstration projects. Industries are beginning to implement clean hydrogen to reduce emissions, yet many hurdles remain to deploying it at scale. Currently, hydrogen from renewable energy costs about $5 per kilogram. Achieving the Hydrogen Shot’s 80% cost reduction goal can unlock new markets for hydrogen, including steel manufacturing, clean ammonia, energy storage, and heavy-duty trucks. This would create more clean energy jobs, reduce greenhouse gas emissions, and position America to compete in the clean energy market on a global scale. These efforts would ensure that environmental protection and benefits for local communities are a priority.

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Published July 21, 2022

By Emma Penrod

Dive Brief:

• The cost of electrolytic hydrogen from renewable energy spiked as high as $16.80/kg in late July, three times recent price norms, according to S&P Global Commodity Insights.


• Because hydrogen must be derived from inputs such as natural gas or renewable electricity, the cost of hydrogen rises alongside these resources, according to Alan Hayes, head of energy transition pricing for S&P Global Commodity Insights. Surging energy costs in the Electric Reliability Council of Texas market have driven the largest hydrogen price hikes, Hayes said.


• In spite of recent price trends, long-term interest in hydrogen as an alternative energy resource continues to grow, according to Brian Murphy, a senior analyst covering hydrogen and low carbon fuels for S&P Global Commodity Insights.

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The cost of hydrogen from U.S. electrolyzers shot up to $16.80/kg in July as a result of energy price hikes that took place in the ERCOT market during a heatwave between July 6 and July 12, according to data from S&P Global Commodity Insights. Electrolytic hydrogen is derived from water and electricity, especially excess renewable energy, to create a carbon-free fuel source. This means hydrogen prices fluctuate alongside electricity prices, Murphy said.

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Renewable H₂ costs are actually increasing in the short term due to increased capex and shortages in electrolyser manufacturing capacity

25 September 2023 12:07 GMT UPDATED 25 September 2023 12:26 GMT
By Polly Martin

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The biggest factor behind the rise in cost is simply that the upstream renewables for hydrogen production are highly exposed to increases in the cost of capital.

“We are seeing… kind of a challenge because renewables cost, capex is increasing,” said Sopna Sury, chief operating officer for hydrogen at German utility RWE, although she notes that once the renewables plants are actually up and running, there is a “marginal cost of zero”.

While this means that green hydrogen is better shielded than grey or blue H₂ from spikes in gas prices — which last year led to some projections putting the cost of electrolysis below traditional steam methane reforming — it also means that renewable H₂ is more likely to get much more expensive with rising inflation.

“We also see in our projects some increasing capex numbers unfortunately,” German energy firm Uniper’s CEO for hydrogen Axel Wietfeld admitted in a separate presentation at the conference.

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