Optimal Design of Solar-Driven Electrolytic Hydrogen Production Systems Within Electricity Markets

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45 Scopus Citations


Hydrogen has the potential to be a key contributor toward a low-carbon economy. Generating hydrogen by electrolysis using renewable energy is one way to support a decarbonized economy; however, its cost is not typically competitive with the carbon-emitting incumbent technology, steam methane reforming. The ability of electrolysis to integrate with electricity markets presents a unique cost reduction opportunity due to the perceived future availability of low and zero-marginal cost renewable energy sources. Additionally, as renewables, and particularly, photovoltaics are installed on the grid, they have a value deflation effect. This work evaluates solar-electrolysis configurations using a mathematical programming framework to maximize system net present value. The framework has been tested with specific weather conditions and financial mechanisms in California. Our findings indicate that a spectrum of potential cost competitive solutions is available for systems that (i) have market configurations resembling hybrid retail/wholesale, resulting in a hydrogen production cost range of US$6.2 kg−1–US$6.6 kg−1, or full wholesale market participation, reducing production cost to US$2.6 kg−1–US$3.1 kg−1, and (ii) achieve projected future cost reductions.

Original languageAmerican English
Article number229183
Number of pages13
JournalJournal of Power Sources
StatePublished - 31 Jan 2021

Bibliographical note

Publisher Copyright:
© 2020 Elsevier B.V.

NREL Publication Number

  • NREL/JA-5700-78479


  • Decarbonized economy
  • Electricity markets
  • Electrons-to-molecules
  • Power-to-gas
  • Renewable hydrogen
  • Solar electrolysis


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