nism that causes the hydrogen and oxygen to accumulate in separate physical streams.

Solid polymer, or proton exchange, membranes were developed at General Electric and other companies in the 1950s and 1960s to support the U.S. space program. A proton exchange membrane (PEM) electrolyzer is literally a PEM fuel cell operating in reverse mode. When water is introduced to the PEM electrolyzer cell, hydrogen ions are drawn into and through the membrane, where they recombine with electrons to form hydrogen atoms. Oxygen gas remains behind in the water. As this water is recirculated, oxygen accumulates in a separation tank and can then be removed from the system. Hydrogen gas is separately channeled from the cell stack and captured.

Liquid electrolyte systems typically utilize a caustic solution to perform the functions analogous to those of a PEM electrolyzer. In such systems, oxygen ions migrate through the electrolytic material, leaving hydrogen gas dissolved in the water stream. This hydrogen is readily extracted from the water when directed into a separating chamber.

KOH systems have historically been used in larger-scale applications than PEM systems. Electrolyzer Corporation of Canada (now Stuart Energy) and the electrolyzer division of Norsk Hydro have built relatively large plants (100 kg/hour and larger) to meet fertilizer production needs in locations around the globe where natural gas is not available to provide hydrogen for the process.

The all-inclusive costs of hydrogen from PEM and KOH systems today are roughly comparable. Reaction efficiency tends to be higher for KOH systems because the ionic resistance of the liquid electrolyte is lower than the resistance of current PEM membranes. But the reaction efficiency advantage of KOH systems over PEM systems is offset by higher purification and compression requirements, especially at small scale (1 to 5 kg/hour).

Today’s Electrolysis Markets
Chemical and Niche Energy Applications

Electrolyzers are today commercially viable only in selected industrial gas applications (excepting various noncommercial military and aerospace applications). Commercial applications include the previously mentioned remote fertilizer market in which natural gas feedstock is not available. The other major commercial market for electrolysis today is the distributed, or “merchant,” industrial hydrogen market. This merchant market involves hydrogen delivered by truck in various containers. Large containers are referred to as tube trailers. An industrial gas company will deliver a full tube trailer to a customer and take the empty trailer back for refilling. Customers with smaller-scale requirements are served by cylinders that are delivered by truck and literally installed by hand.

In general, the smaller the quantities of hydrogen required by a customer, the higher will be the all-inclusive delivered cost. Tube trailer customers (e.g., semiconductor, glass, or specialty metals manufacturers) pay in the range of $3.00/ 100 scf, or about $12/kg. Cylinder customers (e.g., laboratories, research facilities, and smaller manufacturing concerns) pay at least twice the tube trailer price. The value of hydrogen in distributed chemical markets today is much higher than the value of hydrogen if it were to be used as fuel. The price of hydrogen will need to be in the $2.00/kg range to compete with conventional fuels for transportation.

It will take significant cost-reduction and efficiency improvements for electrolytic hydrogen to compete in vehicle fueling markets. Nonetheless, a number of stationary energy-related applications for electrolytic hydrogen are beginning to materialize. These smaller but higher-value energy applications merit the DOE’s attention and support as a means of advancing the practical development of hydrogen from electrolysis for future, larger-scale fueling markets.

Off-Grid Renewables Applications

Power-on-demand from inherently intermittent renewables is another interesting application for electrolysis. Offgrid, renewable-based systems need electricity at night or when the wind doesn’t blow. The value difference between electricity when available and when needed is often great enough to merit the utilization of batteries to fill this gap. In circumstances in which the amount and duration of stored energy becomes relatively large in relation to battery functionality, an electrolyzer-hydrogen regenerative system may prove a lower-cost solution, ultimately enabling greater use of renewables for meeting off-grid energy needs.

Current Electrolyzer Technology and Fueling Costs

The cost of hydrogen from electrolysis is dominated by two factors: (1) the cost of electricity and (2) capital-cost recovery for the system. A third cost factor—operation and maintenance expenses (O&M)—adds perhaps 3 to 5 percent to total annual costs. The electrochemical efficiency of the unit, coupled with the price of electricity, determine the variable cost. The total capital cost of the electrolyzer unit, including compression, storage, and dispensing equipment, is the basis of fixed-cost recovery.

Electrochemical Efficiency

Proton exchange membranes, whether operating in electrolysis mode or fuel cell mode, have the property of higher efficiency at lower current density. There is a 1:1 relationship in electrolysis between the rate of hydrogen production and current applied to the system.

The energy required in the theoretical efficiency limit of any water electrolysis process is 39.4 kWh per kilogram. PEM electrolyzers operating at low current density can approach this efficiency limit. However, the quantities of hy-



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