HYDROGEN COST-EFFECTIVENESS & ECONOMICS | VOGT CTE

Utilization of Otherwise Wasted Electricity
Renewable energies generate electricity depending on the weather, but not always in line with current demand. During times of strong wind or high solar radiation, more electricity is often produced than can be consumed or stored. This surplus is often curtailed, resulting in a loss of economic value. Hydrogen provides a solution: excess electricity is used for electrolysis. This transforms unusable electricity into a storable energy carrier. A typical example is windy nights, when electricity prices drop significantly or even become negative. By converting it to hydrogen, this electricity becomes economically usable.

Long-term and Large-Scale Energy Storage
Batteries are suitable for short-term storage solutions but reach economic limits when it comes to large energy quantities and long durations. In contrast, hydrogen can be stored for weeks or months without incurring significant losses. This is particularly important for seasonal storage, such as when summer solar energy is needed in winter. An example is storing hydrogen in underground salt caverns, which can accommodate large amounts of energy cost-effectively. This makes the energy system more stable and economically viable in the long run.

Substitution of Expensive or Uncertain Fossil Imports
Many countries and companies rely on the import of fossil energy carriers whose prices fluctuate greatly and are influenced by geopolitical factors. In contrast, hydrogen can be produced using domestic renewable energy. This reduces dependence on international markets and long-term price risks. An example is the use of locally produced hydrogen instead of natural gas in industrial processes. This enhances supply security and creates predictable energy costs.

High Value in Hard-to-Electrify Sectors
There are sectors where direct electrification is technically challenging or economically impractical. These include the steel industry, heavy-duty transport, or shipping. Batteries would be too heavy, too expensive, or not powerful enough in these cases. Hydrogen enables viable energy supply in these applications. An example is steel manufacturing, where hydrogen can be used as a reducing agent. In such cases, hydrogen is economically viable, as there is no equivalent alternative.

Utilization of Existing Infrastructure
Another economic advantage of hydrogen is that existing infrastructure can be utilized. Parts of the current gas network, storage facilities, and industrial systems can be converted for hydrogen use. This means that not all facilities need to be newly constructed, saving significant investment costs. An example is the retrofitting of natural gas pipelines for hydrogen transport. This repurposing significantly lowers entry costs and improves the economic feasibility of the hydrogen system.

Declining Costs Due to Economies of Scale
As with many new technologies, hydrogen costs decrease with increasing adoption. Larger production facilities, technical advancements, and rising demand lead to more efficient processes. A comparable effect has already been observed in wind and solar energy. As the market grows, electrolyzers become cheaper and hydrogen production becomes more efficient, thus continuously improving its economic viability.

Hydrogen is not a competitor to electricity but a complement to the energy system. Its strength lies in utilizing surplus energy, long-term storage, supplying industry and transport, and utilizing existing infrastructure. When considering all these functions together, it becomes clear that hydrogen is not a myth but a economically rational component of the energy transition.