Water Electrolysis: A Deep Dive into Green Hydrogen Production

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Water electrolysis offers a sustainable pathway for hydrogen production, a potent energy carrier with immense potential in the modern energy landscape. This article unravels the intricacies of the electrolysis process, focusing on its techno-economic parameters and potential for large-scale implementation.

Water Electrolysis Explained

For the purpose of this study, the foundational calculations are anchored on an electrolysis capacity of 1 Gigawatt (GW). The Polymer Electrolyte Membrane (PEM) electrolysis method is chosen primarily because of its remarkable adaptability to the fluctuating input power typical of wind and solar sources. Moreover, its ability to produce hydrogen at high pressures minimizes the need for additional downstream compression—a marked advantage over atmospheric hydrogen production techniques. Nonetheless, it’s essential to highlight that Power-to-X (PtX) concepts can also integrate alkaline technology, an alternative to PEM.

At full capacity and considering a Specific Energy Consumption (SEC) of 52 kWhel per kg of H2 (which translates to a 64.1% efficiency based on hydrogen’s Lower Heating Value or LHV), a 1 GW electrolysis setup can produce up to 463 tons of H2 daily. Some industrial benchmarks and academic resources suggest even more efficient SEC values (around 48 kWh/kg H2). Yet, it’s crucial to understand that these figures predominantly pertain to optimal operational conditions and often overlook the inevitable degradation over an electrolyser’s lifetime. Hence, this study adopts a slightly higher SEC, reflecting an average value throughout a 30-year lifecycle of a PEM system.

Economic Implications of PEM Electrolysis

On the investment front, the electrolysis plant has an estimated cost of 750 EUR/kW, or 1625 EUR per kg per day. This cost comprises 500 EUR/kW for the primary electrolysis equipment, with an additional 250 EUR/kW encompassing secondary expenses such as engineering, commissioning, and construction. Given the wear and tear, a PEM electrolysis stack is projected to need a replacement after 85,000 operating hours, further influencing operational costs.

It’s imperative to mention the inherent uncertainties with these investment assumptions. Multiple factors can sway these costs, including the plant’s geographical location and whether the installation is on a previously developed “brownfield” or an undeveloped “greenfield.” Consequently, to account for these variations, a comprehensive sensitivity analysis of the electrolysis CAPEX is integrated into the study.

A noteworthy point of exclusion from this study is the oxygen produced during electrolysis, which, although having potential economic implications in specific scenarios, isn’t considered here.


TechnologyPEM electrolysis
Rated input power1,000MWAC, Input
Rated hydrogen production rate19.3tons/h
SEC at rated production52kWh/kg
Hydrogen production pressure30bar
Lower part load limit10%
Water demand15.0kg H2Ofreshwater/kg H2
System lifetime30years
Stack lifetime85,000Operating hours
Technology Readiness Level (TRL)8-9
Technical and Economic Parameters for 1 GWel PEM Electrolysis


Water electrolysis, particularly using the PEM methodology, stands out as a promising avenue for sustainable hydrogen production. While technical and economic challenges persist, continuous advancements and research promise a bright future for this renewable energy technology.