Renewable Electricity to Change Hydrogen-Supply Landscape
As renewable electricity penetrates the grid, and electricity buying-selling tools evolve, near-zero variable cost electricity will change the hydrogen-supply landscape. Historically, in the US and most other economies, fossil-fueled power plants have been the major electricity generators, and the selling price of electricity has been directly related to the cost of the underlying fuels used to generate that energy. Whether coal, oil or natural gas, changes in the price of the underlying fuels has determined the level and direction of electricity pricing. As recently as twenty years ago, it looked to most observers that fuel prices and resultant electricity prices would rise forever. What a difference two decades has made!- As new renewables (primarily wind and solar) increase as a share of the electric supply market, the cost of electricity is becoming increasing decoupled from the cost of fossil fuels
- As renewable electricity sources grow, they are depressing the demand for fossil fuels, relieving demand-driven fuel price inflation
- As renewable energy sources grow as a contributor to the entire electricity market, the market is increasingly dominated by predictable costs – primarily the fixed and semi-fixed costs of construction, ownership and operation of wind and solar assets. Electricity costs are becoming predictable and steady.
