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GREEN HYDROGEN COST REDUCTION IRENA covers many of these activities under the Collaborative Framework for Green Hydrogen and will continue to support member states in these aspects. For standards and certification, the International Partnership for Fuel Cells and Hydrogen in the Economy has a specific standing Working Group on Regulations, Codes, Standards and Safety and has a dedicated task force on hydrogen production analysis. IRENA aims to support this initiative and bring together member states that are working on certification. This report uses a single representative cost for technology today to estimate the potential cost reduction in the future. This cost can vary widely, however, by manufacturer, country of origin, design, location, project scope and application. Part of the underlying problem is limited data availability, given an early stage market that sees strong competition between manufacturers and protection of intellectual property. Another issue is that many of the current cost estimates are for small-scale projects with limited volumes of manufacturing capacity. Estimates for large-scale production are therefore based on engineering, rather than actual values from implementation. Scale-up of manufacturing facilities will bring significant cost reduction, due to automation of the manufacturing process, as well as standardisation of components. What governments can do is to promote transparency and openness and link any public support with a disclosure requirement for the project data. This would allow efforts from other parts of society, such as universities and research institutes, to be channelled towards analysing such data and working towards closing the gaps, rather than leaving this effort to private industry and market competition alone. This would not be unprecedented for hydrogen, with such practices already being followed in California through the Low-Carbon Fuel Standard (LCFS)25 and Europe by the Fuel Cells and Hydrogen Joint Undertaking (FCH JU), but these are currently limited to the overseeing bodies and not fully public. Most of the attention, notably, is currently on projects with European manufacturers, while little is known about the cost and performance of technologies from other regions, with few exceptions. In the years to come, more projects of larger scale will lead to better price discovery and will allow us to refine cost estimates, as well as cost projections. At this stage, a floor cost is also difficult to establish, as many of the components are likely to undergo significant reengineering as manufacturing capacity and project scale increases rapidly. In the face of such uncertainties, governments can create stable demand through policies and regulation, to create a predictable project pipeline that would allow for investments in scaling up manufacturing, as well as the necessary investments in RD&D. A current uncertainty that could turn into a potential upside is the progress that can be achieved for AEM and solid oxide. While these two technologies are at their early stages today, they can represent a step change in performance. AEM has the promise of being free from scarce raw materials, is a less expensive and more environmentally friendly membrane, and can operate at differential pressure. Solid oxide has the promise of much higher efficiency, which translates into lower electricity costs. What governments can do in this respect is to have these technologies as part of research programmes and not only focus scale-up efforts on technologies that are already commercial. Finally, ongoing innovation can be expected to improve viability and even provide new alternatives. The main focus currently is on electrolysis as the key pathway for green hydrogen production, where innovation is likely to further reduce costs and improve electrolyser performance. This may also result in completely new technologies, however, in the production of hydrogen with renewables (IRENA, 2018). 96 25 https://ww2.arb.ca.gov/sites/default/files/classic//fuels/lcfs/guidance/lcfsguidance_19-02.pdfPDF Image | GREEN HYDROGEN SCALING UP ELECTROLYSERS
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