Cost-competitiveness of green hydrogen and lowering the cost of electrolysers

While technological progress has been actively pushing down the costs of renewable electricity for a number of decades the full potential for reducing the costs of electrolysers in a similar way is yet to be properly estimated

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There are several technical aspects, improving which could make electrolysers and consequently green hydrogen, more competitive on a global market

These aspects generally include:

1. Energy consumption per unit of production;

2. Stack lifetime;

3. Stack size;

4. Load range;

5. Start-up time;

6. Electrolyser’s scale of industrial production;

7. Use of scarce materials

Key support policy measures are needed to directly stimulate the development electrolysers

Fiscal incentives are actively being provided to electrolyser producers by countries and regions that have decided to stimulate green hydrogen development

Direct support policies in the form of grants and loans have already been used by some of the world’s strongest economies

The other area in which policy can play a role is in manufacturing and production capacity support

Apart from supporting electrolyser manufacturing, direct financial support should be applied to projects at their early development stages to stimulate R&D activities

Reducing the use of scarce materials for the production of PEM electrolysers is generally viewed as most important direction for further research and development

Government support policies are also needed to create a growing supply chain , mitigate investors’ risks, facilitate innovation , and deploy necessary infrastructures

These policies, in turn, will have a positive impact on the key cost categories of green hydrogen production – such as electrolysers and decarbonized electricity (as the input)

For a comprehensive development of ‘green’ hydrogen, supportive policies should focus not only on the promotion of renewable energy and electrolysers, but also on the build-up of hydrogen infrastructure as well as demand among end users – industries and sectors

Source: Oxford Institute for Energy Studies (OIES) 

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