'European green hydrogen prices will hit $4.50/kg in the 2030s — and Colombian producers can match that': Ecopetrol
But the oil and gas firm's first two electrolyser projects could be more geared towards displacing grey hydrogen at its refineries
Majority state-owned Colombian oil and gas company Ecopetrol anticipates that the European market for green hydrogen will settle at $4.50/kg during the 2030s — a level which it says Colombia's H2 producers can match.
Currently, green hydrogen is extremely expensive to produce in Europe, with some markets such as the Netherlands seeing prices from large-scale projects under construction today estimated at more than €13/kg ($14.36/kg).
However, the EU is putting subsidies on the table to decrease the price for offtakers while also incentivising project developers — both domestically and potential international exporters — to produce as cheap H2 as possible. Costs are also likely to fall as the industry matures.
The price fetched by green hydrogen, including that imported from Colombia, “could be $4.50 per kilogram placed in Europe,” said David Riaño, Ecopetrol’s executive vice-president for the energy transition, during an earnings call last week.
“We believe with the figures analysed that Colombia does have the potential of a competitive renewable energy to reach those price levels and therefore, to be relevant player in that market when it develops,” he added.
Riaño did not specify how Ecopetrol had come to these estimates, but he noted that the oil and gas firm is already developing green hydrogen projects at its refineries in Cartagena and Barrancabermeja.
Ecopetrol announced the completion of feasibility studies for 60MW of electrolyser capacity at each of the refineries back in April 2023, having already installed a 50kW pilot at Cartagena in 2022.
Riaño confirmed that Cartagena’s scaled-up production capacity is scheduled to be on line in 2026, although he hinted that the Barrancabermeja project is still being evaluated ahead of a final investment decision.
It is also unclear how much of this capacity will be geared towards displacing grey H2 used by the two refineries’ to process petroleum, rather than exports.
A Colombian government strategy published in 2021 estimated that the country currently produces 150,000 tonnes a year of grey hydrogen, primarily for use in oil refining, while it targets 1-3GW of electrolyser capacity by 2030 with a focus on partially displacing this fossil hydrogen.
The strategy also projected a levelised cost of green H2 production between $2.2-3.7/kg by 2030, with cheapest production in the north of the country, where the Cartagena refinery is located.
Source: Hydrogeninsight