Levelized Cost of Hydrogen decides which projects survive

Levelized Cost of Hydrogen will determine which green hydrogen projects survive, according to analysis by Carlos Bernuy-Lopez of Hydate.

He argues that electricity price, capacity factor and electrolyser efficiency are the biggest drivers of project economics, making access to low-cost renewable power and strong site conditions critical.

He also notes that while CAPEX matters, it often moves LCOH less than key operational variables when projects are far from target cost levels.

As developers scale up, the message is clear: optimise location, renewable resource quality, technology choices and financing structure to reach competitive cost thresholds.

Investors are increasingly focused on economic fundamentals, meaning projects that cannot lower LCOH face higher risks of delay, resizing or cancellation.

Source: Carlos Bernuy-Lopez, Hydate