Hydrogen prices of $23/kg | Tokyo city government announces results for first double-sided green hydrogen auction

Buyers appear willing to pay a significant premium for small-scale deliveries
 

The Tokyo metropolitan government has announced the results for its first double-sided auction for green hydrogen, which revealed that buyers are prepared to pay up to $23/kg for small-scale deliveries.

 

However, it also exposed a vast difference in price expectations between suppliers and offtakers for larger-scale orders.

 

In this tender, suppliers bid the lowest possible price they could sell their hydrogen for, while buyers bid the highest price they were willing to purchase at — with city government funds filling in the gap.

 

The auction was also split between two transportation types, a tube trailer able to carry 2,484 normal cubic metres of hydrogen (or around 207kg) or a collection of gas cylinders which can carry 263 normal cubic metres of H2 (or around 22kg).

 

Tube trailers will be delivered twice a week up to 30 September, while the collection of gas cylinders will be transported six times in total up to that date.

The successful bidder to supply hydrogen via the tube trailer option won with a bid of ¥280 per normal cubic metre, equivalent to around $23.32/kg, while the two parties which will receive the H2 won their bid for a price of ¥100 per normal cubic metre ($8.33/kg) — leaving the city government to pay the equivalent of almost $15/kg to make up the gap.

 

Meanwhile, the winner for the gas cylinder option bid ¥355 per normal cubic metre ($29.57/kg), while the three parties buying the H2 bid ¥280 ($23.32/kg) per normal cubic metre.

 

Although the overall cost of the gas cylinder transport route is extremely high for both supply and purchase bids, the gulf between the two is much lower — the equivalent of around $6.25/kg — than that between the tube trailer bids, and therefore less taxpayer funding will be needed.

 

However, these prices are far higher than the cost of producing grey hydrogen from unabated fossil gas, estimated to be around $1-2/kg.

The Tokyo government required that the hydrogen be “green”, ie, produced from electrolysis powered by renewables, although it is unclear if this includes restrictions on drawing from the grid.

 

The companies behind the winning bids in the auction have not been publicly disclosed.

 

Source:  Hydrogeninsight