TABLE G-5 Capital Costs of Current Electrolysis Fueler Producing 480 Kilograms of Hydrogen per Day


Unit Cost ($)

Total Cost ($ millions)

Electrolyzer unit



Hydrogen compressor



Hydrogen storage



Hydrogen dispenser



Total process units



General facilities



Engineering, permitting, start-up






Working capital and miscellaneous



Total capital



Siting factor (110% of Gulf Coast)






NOTE: See Table E-37 in Appendix E in this report.

All-Inclusive Cost of Hydrogen Fuel from Electrolysis

The total cost of electrolytic hydrogen from currently available technology is summarized in Table G-6. This table assumes a 14 percent capital cost-recovery factor, and presents the total cost (variable, capital, and O&M) associated with the assumed fueling facility. The delivered cost of grid electricity is assumed at 7 cents/kWh. Total costs are in the range of $6.50/kg.

Future Electrolysis Technology Enhancements

Among the research priorities that can improve the efficiency and/or reduce the cost of future electrolysis fueling devices are the following:

Efficiency-Enhancing Objectives
  1. Reducing the ionic resistance of the membrane. New membranes will be thinner and will incorporate improved ion-conducting formulations that lower the resistance of the membrane and cause more of the electrical energy delivered to the membrane to be translated into hydrogen chemical energy and less into heat. In alkaline (KOH) systems, ionic resistance tends to be less than in proton exchange membrane systems, but KOH systems tend to have more complex materials handling and pressurization regimes.

  2. Reducing other (parasitic) system energy losses. A variety of parasitic loads, such as power conditioning, can be reduced through system redesign and optimization. Power conditioning is one area of efficiency loss; current systems lose as much as 10 percent electrical efficiency with currently available inverters. These losses will be reduced by half or more with new inverters redesigned to meet the specific needs of electrolyzers. Power supply companies will

TABLE G-6 All-Inclusive Cost of Hydrogen from Current Electrolysis Fueling Technology


Cost per Year per Station ($ million)

Cost per Kilogram ($)

Nonfuel variable operation and maintenance (1% of capital)



Electricity (7 cents/kWh)



Variable operating costs



Fixed operating costs (2%/year of capital)



Capital charges (14%/year of capital)



Total cost



  1. need to see enough market assurance before those redesigns will be forthcoming.

    Other cost reductions can come from optimizing an array of components and the overall operating system. Volume manufacturing and pricing are also important cost factors.

    In calling out the efficiency costs of alternating current/direct current (ac/dc) power conversion, one advantage of renewable power becomes worthy of note. Renewables generate dc power that can be applied to the dc-using electrolyzer cell stack without inversion. This incremental efficiency advantage associated with renewables may become material as the cost of power from renewables continues to drop.

  2. Reducing current density. Conversion efficiencies are a function of electric current density, so the substitution of more electrolyte or more cell surface area has the impact of reducing overall power requirements per unit of hydrogen produced. Improved catalyst deposition technology will also lower the amount and cost of materials per unit of hydrogen production. Operating system redesign for optimization is another area of cost reduction opportunity.

    Technology advances will be required to get to efficiencies beyond the current level. One area that promises to improve efficiency is higher temperature, which has the effect of lowering the ionic resistance within the cell environment.

  3. Higher temperatures. PEM technologies typically operate at low temperatures (below 100°C) because of membrane durability limitations. Higher-temperature proton exchange membranes are in development; these should be able to tolerate significantly higher temperatures and thereby deliver higher efficiencies.

Cost Reduction Objectives

The committee believes that PEM electrolysis is subject to the same basic cost reduction drivers as those for fuel cells. Cost breakthroughs in (1) catalyst formulation and loading, (2) bipolar plate/flow field, (3) membrane expense and durability, (4) volume manufacturing of subsystems and modules by third parties, (5) overall design simplifications, and (6) scale economies (within limits) all promise to lower

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