3. Lo scenario internazionale della transizione energetica 35 If you look at estimates of what’s called the legalized cost of producing wind or solar shown on the left hand side of this chart, those have in some cases come down dramatically. Over the last 12 years, the cost of solar in particular has come down about 90%. But what’s interesting, if you look at the right hand side, which is what people have actually agreed at auctions to deliver renewable energy, they are even lower still. If I take one of those, the one from Saudi Arabia, or just $10 per megawatt hour in 2021, one cent per kilowatt hour for solar Pv. That compares with prices of own of 400 per megawatt hour 40 cents per kilowatt hour only 15 years ago. We are seeing quite dramatic progress on the costs of offshore wind. Five years ago, the UK was looking at offshore wind auctions, which might be 150 pounds per megawatt hour, the latest one settled at 37 pounds per megawatt hour. Alongside those dramatic changes in the cost of renewables wind and solar onshore and offshore (Slide 5, page 56). We are also seeing next slide please, dramatic falls in the cost per kilowatt hour of batteries down 85% of in the last 10 years and bound to go down further. And that is of course unleashing both the electrical vehicle revolution, but also the potential to use batteries as a storage device in the power system for short term storage overnight (Slide 6, page 57). We are also next slide seeing quite dramatic and hugely important developments going to have the next slide please. In green hydrogen production, the production of hydrogen from electrolysis of water. The cost of electrolyzers is now collapsing, because we are taking electrolyzers from being a small cottage industry producing only two or 3 million tonnes of hydrogen a year to an industry which will be providing electrolyzers to produce 500 million tons of hydrogen by 2050. And when you get that you unleash economies of scale and learning curve effects. And when electrolyzers get cheap enough, it doesn’t matter if you only use them two or 3,000 hours per year. And then you can tap in to cheap, renewable electricity. And when we look at the reasonable projections for the cost of green hydrogen, which has been up at three or $4 per kilogram, we see it coming down to as low as $1 a kilogram by 2050 though with the cost varying in different parts of the world and we think in most parts of the world, and that most gas prices that you can imagine, green hydrogen from electrolysis is going to be cheaper than blue hydrogen, which is from methane plus carbon capture and storage and may even become
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