> However, a key drawback of this “power-to-gas-to-power” route, if electrolysis is used for hydrogen production, is the round-trip efficiency, which is “around 45%,” it says. The report provides an example to illustrate the cost penalty per MWh associated with the power-to-gas-to-power route: “Hydrogen generation from low-cost renewables at $25/MWh with a capacity factor of 50% yields a cost of $1.70/kg of hydrogen produced. Storing this hydrogen underground will add about another $0.30/kg, thus the hydrogen costs $2/kg. If this hydrogen is used to generate power, the resulting cost is $100 to $200/MWh. In ideal conditions (e.g. a CCGT turbine at 60% utilisation), the cost is $100/MWh, while simple-cycle turbines at 25% utilisation would deliver power at $200/MWh.”

> Still, the report is optimistic. Because hydrogen production costs will drive up to 80% of total power generation costs (Figure 3), if the technical feasibility of a 100% hydrogen turbine is proven, the capital expense of hydrogen turbines could “rival that of natural gas turbines by 2030,” it says. For now, however, “companies should use hydrogen-based power for high-value flexible generation first, and two, hydrogen baseload power generation for deep decarbonisation in situations with constrained renewables potential will require strong policy support.”