Irish green hydrogen could be Europe's cheapest in 2030, Aurora finds

Ireland could produce the cheapest green hydrogen in Europe by 2030, achieving a levelised cost of EUR 3.50 (USD 3.73) per kg under optimal conditions, Aurora Energy Research said on Tuesday.

This would be 8% below optimal production costs in Spain and 35% below those in Germany, with Ireland’s cost advantage driven by the country’s high wind speeds and rising grid congestion.

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In the research firm’s modeling, Ireland’s optimal conditions refer to a 100-MW electrolyser connected to 150 MW of onshore wind and 20 MW of solar photovoltaic generation, not connected to the all-island electricity system and located in Connacht in the western part of the country.

Aurora also sees potential for exports as it estimates the optimal levelised cost of green hydrogen shipments from Cork to Germany in 2030 to be 13% lower than Germany's optimal domestic production costs.

In addition, Ireland has the ambition to install 2 GW of offshore wind connected to electrolysers by 2030, implying a green hydrogen production of up to 138 kt a year, well above its hydrogen demand, which is projected to reach 33 kt that year.

Aurora however says that the market could fail to develop without action to reduce the premium to gas prices. It estimates that the optimal green hydrogen cost in Ireland in 2030 is equivalent to EUR 89 per MWh(th), which is 82% more than its forecast gas price.

“Ireland has the potential to become a green hydrogen powerhouse: its abundance of high wind speeds presents a key competitive advantage, but significant financial support will be critical to kickstarting the industry, either by bringing hydrogen costs in line with natural gas prices, or by paying the cost difference to consumers directly,” said Marlon Dey, head of Research, UK and Ireland, at Aurora Energy Research.

(EUR 1 = USD 1.065)