Thought piece by Dilara Caglayan, Research Lead for European Hydrogen.
At Aurora, our focus has shifted towards understanding how the nascent hydrogen market will evolve and ramp up. Emphasising our central view as the more realistic perspective, we anticipate a fourfold increase in hydrogen and e-fuel demands by 2050. This projection integrates market, policy, and regulatory frameworks, offering a comprehensive outlook on the future trajectory of the industry.
Simultaneously, we acknowledge the existing cost gap between current hydrogen prices, largely derived from fossil fuels, and low-carbon options. Despite various support schemes, especially through auctions, the crucial question remains: Will these supports successfully bridge the cost difference?
Amidst these considerations, we’re also exploring the willingness of offtakers to pay the cost difference. It’s a pivotal aspect that adds complexity to the evolving landscape of the hydrogen market. During a panel that I will be hosting soon, the Globuc GOHydrogen Event in Antwerp February 21-22, I will challenge my esteemed panellists on the following key questions:
- How ready is the supply chain for the anticipated surge in hydrogen demand?
- Do current regulatory frameworks adequately support the growth of the hydrogen market?
- What strategic steps can be taken to bridge the cost gap between conventional and low-carbon hydrogen?
- How can we ensure sufficient renewable energy for green hydrogen production aligns with growing demand?
- The challenge of finding bankable hydrogen off-takers for projects: What innovative solutions can be explored?
At Aurora, we’ve already delved into the upcoming European auctions, and a detailed report is available to our subscribers. For those interested, there will be a free public webinar on the 16th January to share some insights – sign up here.
Additionally, stay tuned as we delve into two critical aspects in our service in the coming months: “Hydrogen Purchase Agreements” and “Offtakers’ Willingness to Pay.” For more information on how you can purchase a Hydrogen product subscription, please contact alex.hutcheson@auroraer.com.
