Design space for PEM electrolysis for cost-effective H2 production using grid electricity

Abstract

Proton Exchange Membrane (PEM) electrolysis is one of the most promising pathways for producing low-carbon hydrogen via electrolysis coupled with variable renewable energy (VRE). This study introduces a physics-based PEM electrolyzer model into an integrated design and scheduling optimization routine, allowing for a comprehensive evaluation of the impact of reactor level metrics (e.g., cathode pressure, current density) on the levelized cost of hydrogen (LCOH) across various cost, technology, and electricity supply scenarios. Benefits of static vs dynamic operation of PEM systems are outlined explicitly. The economic viability of a grid-based PEM electrolyzer producing 50,000 kg of hydrogen per day is assessed for both 2021 and 2035 projections. Results show that dynamic operation reduces the LCOH by 8% under the 2021 Scenario (4.98 to 4.57 $/kg-H₂  at maximum current density 2A/cm²). Under 2035 price, cost and technology assumptions (maximum current density 4A/cm²), the LCOH ranges between 2.18-3.93 $/kg-H₂  under static operation, and between 1.42-2.84 $/kg-H₂  under dynamic operation, resulting in LCOH reductions of 20-50% depending on the electricity price profile.  In addition, partial differential pressure mode with a cathode pressure of 5 bar was found to be the most cost-effective way to compress hydrogen to 30 bar in the 2021 Scenario, while full differential pressure mode is preferred in 2035 Scenarios. Finally, the study revealed that grid-based hydrogen production in 2021 falls short of meeting the carbon intensity (CI) criteria for the IRA 45V PTC, highlighting the need for dedicated renewable power sources for hydrogen electrolysis to qualify for the PTC. In the projected 2035 scenarios, even with an ambitious capital cost assumption of 200 $/kW, the optimal LCOH is 1.22 $/kg, failing to meet the DOE’s Hydrogen Shot target of 1 $/kg. These results suggest that capital cost reduction alone will not achieve low-cost electricity-based hydrogen production, emphasizing the need for further reductions in the cost of low-CI electricity to attain affordable and lower-carbon hydrogen production.