Costs most sensitive to several factors:
- Cost of the electricity feedstock
- Capital cost of the electrolyzer
- Usage factor of the device (i.e., is it operating at full capacity all year, or operating over a small number of hours per year).
Cherry picking the lowest retail rates in the Northwest, combined with today’s cost of multi-megawatt-scale electrolyzers and operating on at least 80% of the hours of the year, the produced cost of hydrogen at the electrolyzer may be around $4/kg. About 75% of that cost is the cost of the electricity, 25% the cost of the electrolyzer. With more favorable electric tariffs recognizing the value of flexible loads to the grid, the cost could be significantly lower. If the produced hydrogen is used as a transportation fuel, the low carbon fuel credits may offset in the range of $1-4/kg of the produced cost.