A Review of Renewable Electricity Cost and Capacity Factor Impact on Green Hydrogen Levelized Cost in Off-grid Configuration

Abstract

Green hydrogen development is still at a niche stage and faces several technical & commercial barriers. Among them is the high LCOH (Levelized Cost of Hydrogen) of green hydrogen, predominantly due to the cost of renewable electricity. In recent years, several research studies have focused on finding the most cost-effective renewable electricity option to feed electrolyzers for producing green hydrogen. However, their findings suggest that renewable electricity costs vary widely between solar, onshore wind, and offshore wind technologies based on the meteorological conditions of the location. With a focus on the United Kingdom (UK), this paper does a high-level business case analysis to assess renewable electricity options considering their impact on the green hydrogen LCOH in off-grid configuration. The paper uses the cost and capacity factors of renewable electricity generated from solar, onshore wind, and offshore wind in the UK. The paper discusses how offshore wind electricity in an off-grid configuration could be the most effective in bringing down the green hydrogen LCOH and reducing offshore wind curtailments in the UK.