How to produce hydrogen - 3

Water electrolysis, i.e. water splitting driven by renewable electric power, can contribute to achieving the sustainable society (see How to produce hydrogen - 1). Its history and overview were summarized in the previous post (see How to produce hydrogen - 2). This post takes a step ahead, and shall detail the price of hydrogen produced by the water electrolysis.

Merit of scaling of water electrolyzer

The figure below summarizes the hydrogen price by water electrolysis as a function of electrolyzer capacity, drawn based on a reference.^[1]

* Sorry that this figure is in Japanese, but will be translated into English!
水素製造コスト = Hydrogen price, 水素製造能力 = electrolyzer capacitiy, アルカリ = alkaline, 水素製造コスト99%が電気代 = 99% of hydrogen cost originates from elecricity price

Like typical chemical process, there exists the merit of scaling to some extent for the electrolyzer; meaning that the larger the capacitiy is, the cheaper the product cost would become. The most chepeat hydrogen in the current market is apprximately 5 USD per 1 [kg] of hydrogen. This price was referenced in a previous post, too (see How to produce hydrogen - 1).

Let me now dig a bit more on the origin of this high price of green hydrogen. According to a break-down of the hydrogen cost,^[1] electricity price accounts for 4 USD, out of the 5 USD of 1 [kg] hydrogen. Remaining contributors were O&M (Operation & Maintenance) and CAPEX (Capital expenses), each accounting for less than 1 USD. Therefore, grean hydrogen is currently costly, because the electricity is expensive.

If the electricity price would become cheaper, the resulting hydrogen price shall be cheaper, too. In more detail, if driven by cheap surplus electricity at night, electrolyzers can produce green hydrogen at lower prices. Alternatively, when driven by locally generated electricity off the electricity-grid, it would produce costly hydrogen.^[2] On a separate note, there are some research ongoing that targets novel electrolyzer concepts to reduce the hydrogen price.

Target cost of hydrogen

Japanese goverments had declared some objective/target as a hydrogen price. In the "hydrogen basic strategy" published in 2017, the goverment set targets of 30 JPY per 1 [Nm³] of hydrogen,^[3] and eventually of 20 JPY in the future.^[3] This target sounds quite ambitious, because the current hydrogen price on the market in Japan is ca. 100 JPY per 1 [Nm³].^[4] We, however, need to keep in mind that the "hydrogen" in this context is not limited to green one.

Also, the goverment considers the reduction in the price of electrolyzers. It is currently 200,000 JPY per 1 [kW], which is set to be reduced to 50,000 JPY.^[4]

Countries overseas also set some targets of hydrogen cost-reduction. In the USA, Hydrogen Shot "111" is proposed in July 2021, setting a cost reduction target of "$1 per 1 kilogram in 1 decade" for clean hydrogen.^[5]
* 1 [kg] of hydrogen corresponds to approximately 11 [Nm³].

References

1. M. Felgenhauer, T. Hamacher, Int. J Hydrogen Energy 2015, 40, 2084.
2. E4tech Sàrl with Element Energy Ltd, Development of Water Electrolysis in the European Union Final Report, 2014.
3. 再生可能エネルギー・水素等関係閣僚会議, 水素基本戦略, 2017.
4. 経済産業省 資源エネルギー庁 新エネルギーシステム課/水素・燃料電池戦略室, “今後の水素政策の検討の進め方について”, 2020.
5. U.S. Department of Energy, “Hydrogen Shot”, https://www.energy.gov/eere/fuelcells/hydrogen-shot (accessed on 2022/02/04).