Electricity Costs

Electricity costs are a key component when producing hydrogen via electrolysis. A boundary analysis was completed to determine the effects of electricity price on hydrogen costs, and the results are shown in Fig. 7.28 For each electrolyzer, the specific system energy requirement is used to determine how much electricity is needed to produce hydrogen; no capital, operating or maintenance costs are included in the calculation. The system energy requirement used is the lowest energy requirement reported for each manufacturer. This graph shows that, at current electrolyzer efficiencies, in order to produce hydrogen at lower than $3.00 kg-1, electricity costs must be between 4 and 5.50 kWh-1. In order to produce hydrogen for less than $3.00 kg-1 with a system that is 100% efficient, electricity prices must be less than 7.50 kWh-1.

The U.S. Department of Energy's Energy Information Administration (EIA) reports 2002 industrial, commercial, and residential electricity prices at 4.83, 7.89, and 8.450 kWh-1, respectively.28 Thus, if only electricity costs were incurred, current electrolyzers could produce hydrogen for $3.00 kg-1 at industrial electricity prices; an ideal system could produce hydrogen for $3.00 kg-1 at slightly lower then commercial prices. This analysis shows that regardless of any additional cost elements, electricity costs will be a major price contributor.

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