Comparing the Levelized Cost of Returned Energy (LCORE) Values for Hydrogen-Based Conversion Pathways and Batteries

Abstract

A method for analyzing the levelized cost of conversion, storage, and return of input energy as an end product net of losses with a zero cost of input energy, termed the levelized cost of returned energy (LCORE), is introduced and applied uniformly to compare the net conversion and storage costs of various renewable electrolysis technologies and hydrogen end-uses with battery and flow-battery energy storage technologies. The LCORE methodology accounts for capital costs, financing costs, operation and maintenance costs, energy efficiency of each step, technology lifetime, and replacement costs. Results show that the most valuable use of the renewable hydrogen is as fuel for fuel cell electric vehicles, although the costs of the hydrogen fueling infrastructure are estimated to be high using the existing paradigm of trucking, compression, and dispensing (adding more than $7/kilogram to the price of hydrogen). Importantly, the analyses show that the range of costs for pathways that produce hydrogen by electrolysis from renewable generation and return it to the electric grid using the natural gas system to transport the hydrogen to an existing combined cycle plant to produce the electricity have costs of $76–$210/MWh. These costs are directly competitive with battery energy storage pathways at $51–$150/MWh while also providing energy storage over durations as long as months, durations that are that are not technically feasible for many battery technologies due to charge leakage.