The answer to one of the biggest questions facing the hydrogen sector is yes, and not because of a single breakthrough technology.
The Australian Renewable Energy Agency (ARENA) commissioned Worley Consulting to better understand capital costs for large-scale green hydrogen production projects in Australia.
Worley’s final report identifies and quantifies pathways for reducing capital costs in large-scale green hydrogen production projects in Australia, using technological, design, and process improvements to inform industry, guide investment, and support government policy development.
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Green hydrogen competitiveness is driven first by lower renewable electricity costs, and next by reductions in project capital costs. Worley’s report looks in detail at the practical pathways for the Australian hydrogen industry to reduce capital costs, and what costs are achievable by 2035 and 2050.
The report finds that capital cost reductions are likely to come from scaling the industry, improving project delivery, standardising designs, modular construction and building supply chain capability over time.
The report assessed four large-scale Australian hydrogen projects across three electrolyser technologies—proton exchange membrane (PEM), alkaline water electrolysis (AWE), and solid oxide electrolysis cells (SOEC), and identified 24 independent ‘cost-out levers’ that could replace project capital costs between now and 2050.
Key findings include:
- PEM and AWE project capital costs could fall 50–60% by 2035 and up to 80% by 2050
- Most projected savings are expected to occur before 2035
- Around 68% of near-term savings are developer-led, not technology-led.
The study also found that many savings are achievable using approaches already available today, including:
- Lean construction
- Modularisation
- Standardisation
- Digital design and scheduling to support project delivery
- Supply chain scale-up
- Industry learning from repeat deployment.
The findings strongly align with the approach ARENA has taken across its hydrogen portfolio for several years. ARENA’s hydrogen strategy has focused on advancing research and development, supporting commercial-scale electrolysers via early demonstration and deployment projects, and growing Australia’s hydrogen ecosystem and building supply chain capability.
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The report shows that costs fall through deployment and industry learning, rather than waiting for a future technology breakthrough. That is consistent with broader Australian hydrogen policy settings, which increasingly focus on scaling projects, building market confidence and supporting early movers to accelerate cost reductions over time.
ARENA’s funding of pilot projects, first-of-a-kind commercial deployment, hydrogen research and development, and industrial partnerships appears increasingly important in that context.
To read the full report click here.
