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The offshore wind industry’s global installed capacity is set to exceed 250 GW by 2030, driven by a surge in coming projects, a Rystad Energy report shows. The combined capital and operational expenditure for the decade is set to add up to an eye-popping US$810 billion, signalling an increasing shift of investments from oil and gas to renewable energy technologies.
The cumulative installed capacity of global offshore wind projects climbed to 33 GW in 2020 – a significant achievement for an industry that has nearly tripled its size since 2016. Rystad Energy expects the world’s installed capacity to hit an estimated 109 GW by 2025 and rise further to 251 GW by 2030, growing by 22% a year on average.
Rystad calculated that green hydrogen from offshore wind would need to be sold at €5.10 per kilogram, based on the following assumptions: a 1-gigawatt offshore wind farm that delivers half of its generated power for hydrogen production; a breakeven power price of €85 ($103) per megawatt hour; the use of proton exchange membrane (PEM) electrolysers; and hydrogen storage costs of €70 per MWh in offshore salt caverns.
According to Rystad, storing hydrogen in offshore salt caverns would be cheaper than storing the gas onshore.
And if the breakeven power price fell to €61 per MWh, a selling price of €3.70 per kg would be required. Grey hydrogen produced from unabated natural gas or coal currently costs about €1 to 1.50 per kg.
“Offshore hydrogen production may become more interesting if a higher carbon tax is imposed on grey hydrogen production,” added Rystad energy research analyst, Petra Manuel.
“This would force existing hydrogen manufacturers to shift more of the production to ‘blue’ hydrogen (grey hydrogen coupled with carbon capture and storage), which in turn would make green hydrogen projects more cost-competitive.
Rystad calculated that green hydrogen from offshore wind would need to be sold at €5.10/kg, based on the following assumptions: a 1GW offshore wind farm that delivers half of its generated power for hydrogen production; a break-even power price of €85 ($103) per MWh; the use of proton exchange membrane (PEM) electrolysers; and hydrogen storage costs of €70/MWh in offshore salt caverns. According to Rystad, storing hydrogen in offshore salt caverns would be cheaper than storing the gas onshore.