A basic cost model for alkaline (AEL) and PEM water electrolysis was developed for the commissioned study, making it possible to evaluate the dependencies of the cost components of the individual technologies in detail and to derive individual cost reduction potentials for these electrolysis technologies.
The costs are directly linked to electricity costs, despite the capital expenditure (CAPEX) and operational expenditure (OPEX) of electrolysis equipment still being high (ranging from 10% of total annualized costs in scenario 7 to 18.32% in scenario 4).
Batteries are mainly applied for short to medium term local energy storage of up to several hours but can achieve rather high efficiencies for accumulation and release of electrical energy. Water electrolysis reaches lower efficiencies if the input and output of electrical energy is considered.
The cost for the 100MW alkaline electrolyzer is estimated to drop from €663/kW in 2020 to €444 in 2030, and that for the 5MW system to drop from € 949 to €726. For the PEM technology, the cost for the 100MW facility should decline from €720 to €500, and that for the 5MW system from €980 to €730.
The optimized system achieved hydrogen costs of 7.5 $ kg −1 for battery costs as low as 110 $ per kWh (lead acid batteries). Unfortunately, the electrolyzer used only slightly more than 55 % of the energy supplied by wind and PV, leaving some room for potential improvements.
Wind power on the other hand, achieves lowest prices around 50 $ per MWh 6, sometimes even down to 20 $ per MWh 7. The use of PV or wind power to supply a water electrolyzer producing green hydrogen could theoretically lead to hydrogen costs of 1.0 to 2.6 US $ kg −1 at an assumed efficiency of 75 % of the electrolysis process.