Blue vs.

Green Hydrogen –
How to Decide
SDG Energy Transition Webinar Series

June 7, 2023

Copyright © 2023 by Strategic Decisions Group International LLC. All Rights Reserved. www.sdg.com
 Meet Today’s Speakers

Sang-Won Kim PhD Einar Sveinsson Jacob Simunovic

Partner & Energy Practice Leader Principal Principal
Strategic Decisions Group Strategic Decisions Group Strategic Decisions Group
skim@sdg.com esveinsson@sdg.com jsimunovic@sdg.com

07 June 2023 Page 2

Hydrogen is a great example of how the players work together in shaping
the energy transition.

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Hydrogen project development is a complex decision with many issues to
consider.

Project Future Production

Cash Flow Start Year 45Q and
Natural Access to Expansion
Gas Price Water or 45V
Electrolysis Project
Cost of IRR Hydrogen
Electrolyzer Dedicated Technology
renewables Vendor Injection
Cost of Access to Permit
Renewable Infrastructure
Partnership
Power
Project
Location Electrolyzer Final Cost
capacity Product Escalation
Total Capital
Level of Market for
Spend
CO2 Hydrogen
Reduction Hydrogen
Separation Hydrogen Local Gov.
Technology Transport Incentives Capacity
Options

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 The specifics of your hydrogen strategy and project location should drive
your decision on the choice of technology.
USA Green vs USA Blue Levelized Cost Differential, 2030 [$ / kg H2]
Base value = $0.04
-1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 Base Value
Renewable Price, Other Annual Green Costs, $20, $70, $40,
[2020 $ / MWh, 2020 $ / kg H2] $0.25 $0.80 $0.50

USA Natural Gas Cost, [2020 $ / MMBTU] $10 $2.0 $5.0

Electrolyzer Capacity Factor, Number of

75%, 3 25%, 1 45%, 2
Electrolyzer Stack Replacements [%, #]

Electrolyzer Capital Learning Rate, [%] 25% 7% 14%

Electrolyzer Efficiency, [MWh / kg H2] 0.042 0.058 0.050

Blue Hydrogen Conversion Efficiency,

0.25 0.15 0.20
[MMBTU / kg H2]

Electrolyzer Capital in 2023, [2020 $ / kW] $900 $1,600 $1,300

Blue Hydrogen Plant Capital,

$7.88 $3.94 $5.25
[2020 $ / kg H2]
Blue Hydrogen Other Annual Costs,
$0.51 $0.17 $0.34
[2020 $ / kg H2]

Cost Advantage for Green Cost Advantage for Blue

Levelized cost is defined as the present value of all costs associated with producing hydrogen.

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Visit our website (sdg.com) for additional decision quality resources on
Navigating Energy Transition.

The SDG Energy Transition Webinar Series SDG White Papers

How Oil & Gas Companies

Hydrogen Scenario Planning Navigating Energy are Framing Energy
Transition Transition Strategy

It’s the most abundant element
on the planet. Can scenario
planning guide your
participation in the hydrogen
economy?
The transition to reduce – or
eliminate – CO2 emissions is a
socio-economic event at an
unprecedented scale.
Finding a profitable path to
reducing emissions has a high
degree of analytical and
organizational complexity. One
solution does not fit all.

Available on our Energy Transition Resource Page: sdg.onl/energy-transition-resources

07 June 2023 Page 6