Hydrogen Production via Electrolysis

The Clean Air Task Force (CATF) analysis finds that optimistic forecasts of clean hydrogen costs falling below $1/kg are unrealistic because they overemphasize electrolyzer capital cost reductions while ignoring the dominant impact of electricity prices. Electricity costs account for 50%–75% of the total production cost. Even with projected 2030 improvements in PEM electrolyzer efficiency and capital costs, the authors conclude that average production costs will likely remain above $3/kg (Real 2022 USD) due to the lack of realistic access to clean firm electricity below $40/MWh. The paper recommends that policymakers prioritize clean hydrogen for sectors lacking other viable decarbonization alternatives, such as steel manufacturing and chemical refining, and focus on decarbonizing the power grid to enable scale-up.

• Electricity costs are the primary driver of electrolytic hydrogen production costs, representing between 50% and 75% of the total cost.
• Average production costs for clean hydrogen are unlikely to drop below $3/kg (Real 2022 USD) for the foreseeable future, primarily because delivered clean firm electricity is not expected to fall below $40/MWh.
• Forecasts predicting costs below $1/kg are considered incomplete as they incorrectly focus on electrolyzer capital costs rather than electricity costs. Achieving $1/kg would require unrealistic conditions, including reducing total project costs to $100/kW and increasing operating efficiency to nearly 90%.
• The variability of renewable energy sources like wind and solar impacts costs because lower capacity factors mean capital costs are amortized over less hydrogen. For example, solar-only facilities typically have capacity factors of 20%–30%, while wind-only facilities are around 40%.

APA

Wakim, G. (n.d.). Hydrogen Production via Electrolysis. Clean Air Task Force. https://cdn.catf.us/wp-content/uploads/2023/11/21103902/hydrogen-production-electrolysis.pdf

Chicago

Wakim, Ghassan. Hydrogen Production via Electrolysis. Clean Air Task Force, n.d. https://cdn.catf.us/wp-content/uploads/2023/11/21103902/hydrogen-production-electrolysis.pdf.

Wikipedia

{{cite report |last1=Wakim |first1=Ghassan |title=Hydrogen Production via Electrolysis |publisher=Clean Air Task Force |url=https://cdn.catf.us/wp-content/uploads/2023/11/21103902/hydrogen-production-electrolysis.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{wakimndhydrogen, author = {Wakim, Ghassan}, title = {{Hydrogen Production via Electrolysis}}, institution = {Clean Air Task Force}, url = {https://cdn.catf.us/wp-content/uploads/2023/11/21103902/hydrogen-production-electrolysis.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }