BAKU, Azerbaijan, April 5. Azerbaijan may supply hydrogen to Europe in a cost-effective way, Vladimir Rogov, Managing Director and Partner of the Boston Consulting Group (BCG), told Trend.
"In Azerbaijan, we see a unique combination of all components needed for the development of the hydrogen sector. There are natural resources, infrastructure, and the end-consumer. And all this in a compact geography. The potential of Azerbaijan's renewable energy resources is extremely high, ensuring a strong competitive advantage, namely, the low cost of green hydrogen production," he said.
Rogov said referring to Global Solar Atlas that the solar generation potential in Azerbaijan is comparable to the south of Italy and is almost 1.5 times greater than Germany’s, and the potential of wind energy on the Absheron Peninsula is comparable to the North Sea shelf areas.
"In terms of profits, the country could earn from $230-500 million per year, given the expected hydrogen price decrease in Europe nearly twice, from current ±$11 to $5.8/kg. Thus, the full cost of the green hydrogen delivered through the pipe can be very competitive and allow for substantial margin," said the expert.
He believes that another strong advantage of Azerbaijan is its ability to transport hydrogen, up to 10-15 percent of the flow, relatively efficiently and cost-effectively along existing gas pipeline networks to Europe, especially if compared to exports from sub-Saharan Africa or the highly inefficient transport of liquefied hydrogen from overseas.
"It makes sense to also build new pipelines, envisioning the future demand for hydrogen. For example, given the TAP volume of 11 billion m3 per year, the potential for transporting hydrogen from Azerbaijan is 40-85 thousand tons per year (5-10% of the gas volume). This will make only 2-4 percent of 2.3 million tons of the projected hydrogen demand in Italy in 2030," noted Rogov.
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