Modeling Global Levelized Cost of Hydrogen Production Considering Country-Specific Investment Risks

TL;DR

This paper develops a global model for hydrogen production costs, considering country-specific risks, and finds hybrid systems and interest rates significantly influence the levelized cost of hydrogen.

Contribution

It introduces a worldwide hydrogen production system model that incorporates country-specific interest rates and analyzes their impact on production costs.

Findings

LCOH ranges from 2.7 to 28.4 Euro/kg, averaging 9.1 Euro/kg.

Hybrid hydrogen production systems reduce costs compared to non-hybrid.

Country-specific interest rates significantly increase the LCOH.

Abstract

Hydrogen is central to the global energy transition when produced at low emissions. This paper introduces a renewable hydrogen production system model (HPSM) that optimizes a hybrid hydrogen production system (HPS) on a worldwide 50x50 km grid, considering country-specific interest rates. Besides the renewable energy's impact on the HPS design, we analyze the effect of country-specific interest rates on the levelized cost of hydrogen (LCOH) production. LCOH production ranges between 2.7 Euro/kg and 28.4 Euro/kg, with an average of 9.1 Euro/kg. Over one third (40.0%) of all cells have an installed PV capacity share between 50% and 70%, and 76.4% have a hybrid configuration. Hybrid HPSs can significantly reduce the LCOH production compared to non-hybrid designs, whereas country-specific interest rates lead to significant increases in the LCOH production. Hydrogen storage is deployed rather than battery storage to balance production and demand.