Analysis of Electrolytic Hydrogen Technologies with a Comparative Perspective on Low-Carbon (CCS-Abated) Hydrogen Pathways

Overview

The primary goal of this analysis of electrolytic hydrogen technologies, conducted by ERM is to evaluate various electrolytic hydrogen production pathways focusing on their technical, economic, and environmental aspects and to compare these with hydrogen production routes that involve fossil fuel with carbon capture and storage (CCS) abatement. Further, the objectives of the study include assessing the potential impact of global water resources through electrolysis in a net zero context, evaluating the potential impact of hydrogen consumption on water vapour emissions, and assessing the value of oxygen produced via electrolysis

Summary

• Alkaline electrolysers (AEL), proton exchange membrane electrolysers (PEM), and solid oxide electrolysers (SOEC) technologies were modelled across three electricity connection scenarios (as follows) to produce a levelised cost of hydrogen (LCOH) in 2030 and 2050. The lifecycle assessment was conducted based on the aforementioned technologies, including anion exchange membrane electrolysers (AEM).
  • Scenario 1: The electrolyser was assumed to be connected to 100% grid electricity.
  • Scenario 2: A 50/50 combination of onshore wind and solar-generated electricity.
  • Scenario 3: It was assumed that wind energy that would otherwise be curtailed would be used by the electrolyser whenever the daily average electricity production from offshore wind exceeded the daily average electricity demand.
• Between 2030 and 2050, improvements in electrolyser performance, particularly in efficiency, and reductions in CAPEX unlocks cost reduction across the technologies and scenarios modelled.
• By 2050, dedicated renewables are the lowest cost option on a per kg H₂ basis, with LCOH <3€/kg across the technologies considered in this study. This is primarily due to the high utilisation factor of the electrolyser and the low cost of renewable energy.
  • The high utilisation factor is achieved through the balancing effect of combined onshore wind and solar generation capacities, which together provide a sufficiently consistent power output to support the electrolyser for nearly the entire year.
  • Additional cost reductions would be required to achieve the most ambitious hydrogen cost targets.
  • Increasing electricity costs increases the LCOH. The impact on LCOH is proportional to the change in cost, with the largest impact being felt under Scenario 1: Grid connected (Grid) where electricity costs are already large and a 50% increase in costs causes a larger total increase than under, for example, Scenario 2: Load following (RES).
• The Grid scenario can support 100% load factors, enabling consistently high-volume production of hydrogen. This positions the Grid scenario as the second lowest LCOH scenario in both 2030 and 2050, despite high electricity costs.
• The high LCOH in the Curtail scenario indicates that strategies relying solely on curtailed renewables for electrolysers are unlikely to result in cost-effective hydrogen production. This is primarily due to the low expected load factors and the resulting low hydrogen production volumes.
• In 2030, AEL electrolysers achieve the lowest LCOH due to their low relative CAPEX, good efficiency, and minimum load characteristics. By 2050, significant improvements in CAPEX across the technologies considered in this study make SOEC electrolysers the lowest cost option in all scenarios. Their high efficiency supports large volumes of hydrogen production, distributing costs effectively and maintaining a low LCOH despite the additional heating costs.
  • SOEC using renewable load following direct connection potentially achieves costs of €2.07/kg H₂ by 2050. Even at this LCOH, further cost reductions would be needed to meet the most ambitious hydrogen cost targets
• Increasing renewable energy generation capacity decreases the LCOH, with a particularly significant impact in 2030. This sensitivity applies specifically to renewable energy connected scenarios, such as load following (RES) and Curtailment (Curtail). Conversely, halving the generation capacity would result in an exponential increase in LCOH in the 2030 SOEC curtail scenario.
  • Where renewable energy supply causes reduced electrolyser load factor, increasing the electrolyser capacity (MW) increases the LCOH.
• The production pathway emissions for electrolyser technologies modelled (AEL, PEM and AEM) reach close to zero by 2050 because the only sources of emissions are from tap water, sodium hydroxide and hydrochloric acid (this analysis did not consider other environmental impacts, such as land use and the embodied emissions from the construction and manufacturing of materials).
  • The heat requirement for SOEC hydrogen production leads to the highest GHG emissions among the modelled electrolysis technologies if natural gas combustion is used to meet this demand. However, significant GHG emissions reductions can be achieved under natural gas decarbonisation scenarios.
• Stoichiometrically, 9 kg of water is required to generate 1kg of hydrogen. However, in practice total input can range from 20 – 60 kg H₂O/kg H₂ depending on the water source and balance of plant (BoP) configuration.
• In pursuing net-zero carbon emissions, it is crucial not to lose sight of the impact of other emissions, such as the emission of water vapour. At higher temperatures, the atmosphere can hold larger concentrations of water vapour. The warming associated with increased water vapour in the atmosphere is therefore part of a feedback loop between increased GHG emissions and global warming.
• The business case for O₂ valorisation is strongest where hydrogen costs are low and large volumes of oxygen can be produced. In cases where only small amounts of oxygen are produced, such as with small electrolysers or electrolysers with low load factors, the revenue generated on an LCOH basis may not be sufficient to justify the investment in the technologies and systems required to valorise and make electrolytic oxygen competitive.
• By 2050, electrolytic hydrogen is cost competitive with CCS-abated hydrogen production under load following (RES). For grid connected and wind curtailment scenarios, LCOH remains substantially higher than CCS-abated hydrogen production routes. Assumptions around electricity cost, electricity consumption and the volumes of hydrogen produced by each technology and scenario impact how competitive electrolytic hydrogen can be.
• By 2050, feedstock costs will constitute the bulk of the LCOH for both CCS-abated and electrolytic hydrogen, except in scenarios where electrolytic hydrogen is produced with very low load factors. Consequently, fossil fuel costs will primarily influence the cost of CCS-abated (blue) hydrogen production, while electricity costs will determine the cost of green hydrogen.