Techno-Economic Analysis of Low-Temperature Water Electrolysis Cell Stacks and Systems
Hydrogen is seen as a potential energy intermediary between renewable energy sources and end-use applications including transportation, power, and industrial feedstocks. Central to this approach is low-cost generation of hydrogen via water electrolysis. Significant research has been undertaken to improve the electrolysis stack technology, including enhancements in electrical efficiency, lowering performance degradation, and lowering total stack cost. Strategic Analysis Inc. (SA) has developed a process-based Design for Manufacturing and Assembly (DFMA) cost model for Alkaline, Proton Exchange Membrane (PEM), and Anion Exchange Membrane (AEM) electrolysis cell stacks. We assess the impact of technology improvement and manufacturing scale-up on the projected selling price of electrolyzer stacks for near-term and future deployments.Relative to the total cost of installing an electrolysis plant, the stacks contribute less than 50% of the initial capital investment. Therefore, from an electrolysis project perspective, the mechanical balance of plant and electrical systems required to operate the plant are equally important to understand. To explore the near-term and future cost projection for levelized cost of hydrogen via electrolysis, SA has developed a bottom-up project cost model for Alkaline, PEM and AEM hydrogen production plants. This project cost model incorporates: 1) Stack cost, 2) Mechanical Balance of Plant Cost, including process equipment, piping, valves, and instrumentation, derived from equipment quotes, scaling, database values, and Aspen estimates; 3) Electrical Balance of Plant Cost, including wiring, rectification, and electrical infrastructure upgrades, derived from time and material cost correlations; 4) Site Preparation Cost, focused on green field installation; and 5) Construction Overhead Cost, including engineering, procurement, and construction (EPC) costs and project contingency. Through a project level perspective, potential stack cost improvements through catalyst optimization and cell refinement can be contextualized against cost reductions from scaling up hydrogen plant deployment. The SA project cost model results are fed into a Levelized Cost of Hydrogen (LCOH) model that accounts for the full CapEx and OpEx involved in plant operation, including electricity and water consumption, labor, maintenance, and stack replacements.The SA project cost model and the LCOH model are used to conceptualize electrolysis system sizes from 10 MW to 1 GW for Alkaline, PEM, and AEM electrolysis systems. From a project perspective, electricity costs contribute 50-80% to the LCOH while capital and maintenance costs contribute the remaining 20-50% to the LCOH. Although improvements in stack performance and cost can provide incremental LCOH reductions, significant cost decreases will require optimization of the stack cell voltage and operating current density, as well as reductions in net electricity prices through integration with low-cost electricity. SA will explore potential opportunities to reduce hydrogen production costs through stack operating point optimization and scenarios where hydrogen production plants can selectively use low-cost renewable electricity to reduce net hydrogen costs.
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