Research synthesis on the levelized cost of hydrogen to discover a reasonable hydrogen price

Abstract

Hydrogen is widely considered to be a feasible alternative to fossil fuels since it can be produced using renewable energy sources. However, its utilization is constrained by high production costs and variability in the cost of generation. The levelized cost of hydrogen (LCOH) varies widely across due to the influence of factors such as energy type, year of analysis, production capacity, and region on the cost of hydrogen production. Thus, there is a lack of clear understanding on the global standards of hydrogen pricing. This study sought to examine the factors that affect hydrogen prices through a global comparison of studies that have reported different LCOH values. A quantitative research methodology was employed in which data on LCOH, region, country, energy type, capacity, and year of investigations were collected and analyzed using descriptive and inferential statistics for the period from 2017 to 2021. Studies from Africa, Australia, Asia, Europe, Middle East, North America, and South America were included in the study. The findings revealed a strong impact of region, energy types, and production capacity on the cost of hydrogen. While no specific trend was observed for the years of analysis, 2017 and 2021 had significantly higher LCOH values. On a regional basis, Europe and Middle East emerged as costliest regions for hydrogen production while South America and Asia were the cheapest. Moreover, off-grid systems were found to be the costliest energy types for hydrogen production due to high operational and maintenance costs while concentrated solar power (CSP) and onshore wind systems were the cheapest. The cost of hydrogen production was also found to reduce with an increase in production capacity due to the benefits accrued from economies of scale. The outcomes of this study, in general, show that wind and solar power have economically viable potential for production of green hydrogen.