Hydrogen is emerging as one of the most important sources in “upscaling” energy, increasing both the share of renewable energy supply and the scope of decarbonization. One driving factor is that hydrogen provides easy and effective storage and transportation options. Perhaps the biggest challenge that remains is hydrogen’s cost effectiveness, which is what we look at more closely today.
Hydropower remains one of the least-expensive energy sources. This remains true even despite recent cost increases. Since 2010, hydropower’s global weighted average levelized cost of energy has increased by 27% to around USD 47 per MWh in FY2019. This uptick is due to rising installation costs, which in turn are largely due to new projects being located in more challenging locations.
Over the past decade, costs trends within the renewable energy sector have been dramatically decreasing, making wind (as discussed in our post “Wind Energy LCOE Breakdown”) and solar two of the most competitive energy sources.