Modelling levelised cost of hydrogen under scenario based circumstances for India for Alkaline Water Electrolysis

Building a hydrogen economy will require substantial investment. Production technologies alone will need to attract between $4.68 billion and $15.24 billion by 2035. Minimizing the hydrogen conversion, storage and transport costs by using localized applications could significantly improve hydrogen’s commercial competitiveness.

This section sets out the findings of the eninrac’s “Data to Information” (D2I) model to analyze LCOH. The aim of the model is to show the impact of each segment of the hydrogen value chain.

LCOH figures help to understand the cost of hydrogen per unit – in our model it is USD per kg.

The LCOH can be one of the metrics to assess the economics and commercial viability of a project or to understand its cost competitiveness compared with other energy sources or projects located elsewhere. LCOH is calculated as the discounted total costs incurred during the lifetime of an asset or project over the total discounted hydrogen volumes generated. Total costs in our model include capital costs (total upfront costs to bring the asset to commission) and operating costs (fixed and variable – these vary depending on the segment and hydrogen production technology, but typically include stack replacement, electricity cost, water for electrolysis, grid, maintenance and other costs).

Assumptions about several factors (including useful life of plants, stack lifetimes and replacements, load factors and conversion energy losses) have been made based primary research and direct industry feed through multiple F2F interactions with the technology providers, OEMs and other stakeholders.

While using ALK technology the LCOH is projected to be USD 6.23/kWh by 2050 under Base Case Scenario while electricity is being fed through grid. Further, the LCOH is expected to be USD 6.40/kWh & USD 6.07/kWh under High Case Scenario & Low Case Scenario respectively by 2050.

Under base scenario the LCOH comes out to be USD 5.70/kWh in 2020 while using power through grid. Further, LCOH comes out to be USD 5.97/kWh while feeding power through solar & USD 5.78/kWh while feeding power through wind under in 2020.