🔋 Efficiency, Modularity and the Future of Competitive Green Hydrogen
Recent development plans in China are pushing strongly toward lowering the CAPEX of electrolysers through modularity and large-scale project deployment. This is an important step forward, but CAPEX reduction alone will not be enough to make green hydrogen truly competitive.
As the figure below shows, energy efficiency plays an equally decisive role. Even with low electricity costs, inefficient systems translate into high LCOH (Levelized Cost of Hydrogen). To reach competitive hydrogen costs in Europe, we must accelerate the deployment of high-efficiency technologies such as Solid Oxide Electrolysis (SOEC) where Europe already leads globally in science, engineering, and industrial know-how.
A few highlights shaping this quiet “revolution”:
🌍 Sunfire and Neste have started up what is claimed to be the world’s largest solid-oxide electrolyser in an industrial setting at the Rotterdam refinery, using waste heat to make renewable hydrogen with record efficiency.
⚗️ Topsoe will supply SOEC technology to produce e-methanol in Spain, showing that solid oxides are not only about hydrogen, but about the full Power-to-X chain.
🏭 Elcogen and Thyssenkrupp Nucera have opened new pilot plants for SOEC manufacturing in Europe, signalling the scale-up of the supply chain.
Therefore, the chart below highlights how, under realistic European renewable electricity costs (30–50 €/MWh), only highly efficient systems can reach or beat the EU fossil hydrogen cost benchmark. This underlines the importance of own renewable electricity generation to stabilize OPEX and protect long-term competitiveness.
Looking ahead, several directions will be key:
🏭☀️ Industrial and RFNBO projects aligned with EU decarbonization targets are the ones leading the way. In addition those projects must be located in those areas where electricity costs are the most competitive (i.e. South and North of Europe). Projects in other areas are possible but attending other criteria with highest willingness to pay (i.e. energy security).
⚙️ Scaling-up project sizes, following the example of the latest SOEC installations reaching tens of megawatts, to achieve acceptable LCOH, but containing these sizes around 50 MW. This comes with acceptable risks for all partners in the projects and helping to contain CAPEX (lower risks, better prices).
🌍 Thinking long-term: these infrastructures will last more than 25–30 years that we are calculating in our models, and therefore they will shape the future Europe that we leave to our children and grandchildren. This comes with strong industrial hubs as the ones created during the Industrial Revolution which has been the core of the European progress. Many of them are still giving jobs and prospers to many regions of Europe.
Now is the time to connect efficiency, innovation, and strategic deployment, ensuring that Europe remains at the forefront of the green hydrogen development.