Grid-connected hydrogen production via large-scale water electrolysis

Abstract

A techno-economic analysis was performed for large-scale hydrogen production plants (4000–40,000 kgH2/day or approximately 10–100 MW). Two electricity pricing schemes in 8 different geographical locations were considered. The analysis included five Canadian provinces with flat rates and real-time pricing for the wholesale markets in Germany, California, and Ontario. Under flat-rate pricing, the levelized cost of hydrogen produced via water electrolysis ranged from, for example, $4.21 to $4.71/kgH2 in Québec. For wholesale electricity markets, an operational strategy was developed that aims to identify if a posted price is high or low based on historical electricity spot prices. The electricity cost can be reduced by 4%–9% in Germany and by 15%–31% in Ontario and California at a capacity factor of 0.9 by implementing such operational strategy. Electrolytic hydrogen production in Ontario combined with underground storage was found to be the cheapest in the three wholesale electricity markets, resulting in a levelized cost of hydrogen of $2.93–$3.22/kgH2 for alkaline electrolysis and $2.66–$3.54/kgH2 for proton exchange membrane electrolysis. Compared to steam methane reforming at $2.5–$2.8/kgH2 (without carbon capture), the electrolytic hydrogen cost is 6%–27% higher. However, this cost becomes comparable to that from steam methane reforming once carbon capture and storage are included in the analysis. Our results suggest that maximizing the use of the electrolytic systems via high capacity factors can be favorable, especially under integration with wholesale electricity markets.