Comparative analysis of the levelized cost of hydrogen production from fossil energy and renewable energy in China

Abstract

Against the backdrop of the low-carbon energy transition, hydrogen energy has garnered significant attention as a promising energy option. This study employs the Levelized Cost of Hydrogen (LCOH) model to analyze the production costs and cost structures of nine hydrogen production processes with identical production scales. The results indicate that: (1) The hydrogen production by coal gasification (CGH) has a cost advantage (10.07 RMB/kg), but it is associated with high carbon dioxide emissions. After coupling CCUS technology, the LCOH of hydrogen production from coal gasification is 11.45 RMB/kg, an increase of about 14 %, which is 43 % lower than that of hydrogen production from natural gas reforming coupled with CCUS (19.94–20.06 RMB/kg), and 65–70 % lower than that of hydrogen production from water electrolysis (33.30–38.42 RMB/kg). (2) In large-scale production, hydrogen production from municipal solid waste also shows strong economic competitiveness (10.95 RMB/kg), only 9 % higher than the coal gasification to hydrogen process. (3) Sensitivity analysis reveals that the LCOH of fossil fuel-based hydrogen production and hydrogen production from municipal solid waste is significantly affected by carbon taxes and raw material price fluctuations. In contrast, LCOH from water electrolysis is more vulnerable to fluctuations in electricity prices. (4) In an ideal scenario, if China's hydrogen production industry adopts a hydrogen production method that combines renewable energy with water electrolysis, the industry's carbon reduction potential could reach approximately 800 million tons.