Could Ireland Produce the Cheapest Green Hydrogen in Europe?

A new analysis by Aurora Energy Research has found that Ireland could produce the cheapest green hydrogen in Europe by 2030. Hydrogen Industry Leaders explores the findings.

Aurora’s modelling has shown that production under optimal conditions would result in a levelised cost of €3.50/kgH2 in 2030. This is 8 per cent lower than optimal production costs in Spain and 35 per cent lower than in Germany.

Ireland’s competitive advantage comes from its high wind speeds, particularly in the west, compared to other European countries, and rising congestion within the electricity transmission system.

It has been revealed that the Irish Government aims to install 2 GW of offshore wind generation connection to electrolysers by 2030, which could produce up to 138kt of green hydrogen annually.

Irish hydrogen demand rises to 33kt in 2030 under Aurora’s base case forecast, from 11kt in 2023. The industrial sector is projected to account for the highest share of consumption, followed by transport.

The modelling also shows that production could also be exported, with the optimal levelised cost of green hydrogen imports shipped from Cork to Germany in 2030 to be 13 per cent lower than optimal domestic production costs in Germany.

However, despite the cost advantages, the analysis explains that robust policy support is needed and is crucial to unlocking Ireland’s green hydrogen potential.

It is recommended that introducing government-backed hydrogen purchase agreements that would pay for the cost premium could help to incentivise production, whilst capital expenditure relief on investments in electrolysers could further reduce the cost to be recovered per kilogram of hydrogen.