Hydrogen (H2) thread. Long but there's much to consider. H2 increasingly viewed as the solution for climate change issues.

$1/kg is the level that most consider as the point when H2 becomes the "silver bullet".

Two main pathways to produce H2 today:

1) Steam Reforming of Methane (SRM)
2) Electrolysis

Since SRM involves breaking down Methane (CH4), we will not discuss this here since it does not solve the CO2 issue. We will only examine Electrolysis.

Electrolysis has been around for ages. But as things stand, there are three main methods of Electrolysis in use:

1) Alkaline Electrolysis (AE)
2) Proton Exchange Membrane (PEM)
3) Solid Oxide Electrolysis (SOE)

We'll look at each in turn. But first, some basic conversions...

1 Kg of H2 = ~40 KWh
1 Kg of H2 = ~12 cubic meters of H2
1 KWh = 3,412 BTUs

The main inputs into electrolysis are: water, electricity, and the electrolyzer itself. This is an oversimplification but doesn't detract from grasping the main issues

Electrolysis requires at least 2.5 gallons of water for each Kg of H2.

Source: https://phys.org/news/2007-10-analysis-requirements-hydrogen-economy.html

The cost of water is fairly low (today) - about 0.50 cents/gal - not a huge needle mover in the cost equation.

Source: https://www.energy.gov/sites/prod/files/2017/10/f38/water_wastewater_escalation_rate_study.pdf

Moving to electricity costs. Both AE and PEM systems require anywhere between 50 KWh to 75 KWh of power and both have a median of about 53 KWh.

Source: https://www.nrel.gov/docs/fy19osti/70380.pdf

Power Price for Industrial Use = $0.07 to $0.08/KWh

Source: https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a

So the cost of electricity required to produce 1 Kg of H2 =

53 KWh x $0.075 = $3.98/kg

I can stop the analysis right here since this is nearly 4x the ideal cost (even before capital costs) that H2 proponents and optimists talk about.

But let's suspend judgment and move ahead

Capital cost estimates are all over the place. The following paper is an excellent survey of capital costs (and plenty of other issues).

Source: https://theicct.org/sites/default/files/publications/final_icct2020_assessment_of%20_hydrogen_production_costs%20v2.pdf

For AE systems = $1,083/KW
For PEM systems = $1,125/KW

Now to convert this to a per Kg...

We'll assume a system capable of producing 50,000 Kg/day and:
1) 53 KWh of input per Kg of H2
2) 8,760 operating hours/year
3) 95% Utilization

Total H2 produced = 50,000 x 365 x 95% = 17.34 million Kgs

Electricity Required = 17.34 x 53 = 919 GWh (A)

Grossing up for 100% = (A) / 95% = 967 GWh - (B)
System Capacity = (B) / 8760 = 110,400 KW

So total capital cost = 110,400 KW x $1,100/KW = $121.4 mm

After-tax Required Unlevered Return = 8%
Tax Rate = 25%
Useful Life = 20 years

Return on Investment = $121.4 mm x 8% / (1-25%) = $12.95 mm

Return of Investment = $121.4 mm / 20 yrs = $6.07 mm

Total Capital Costs = $19.02 mm

H2 Produced = 17.34 mm Kgs

Capital Cost / Kg = $1.10/Kg

Total Cost of Production = Electricity Cost + Capital Cost

= $3.98 + $1.10 = $5.08/Kg of H2

What have we not considered:
1) labor costs at the plant
2) cost of land
3) construction costs/contingencies

Regardless, we now have a baseline of ~$5.00/Kg of H2 at Electrolyzer gate

Now to get this to a refueling station, we need to compress the H2 and put it on a pipeline.

Compression results in energy loss of about 10%. Assuming that pipelines charge $0.40/mcf and 1 Kg of H2 = 12 cu. m or about 425 cu. ft., the cost of transportation = $0.17 per Kg.

So compression loss and pipeline transportation costs result in the $5.00/Kg Electrolyzer gate price going to $5.67/Kg at the refueling station or power plant.

We haven't looked at SOE systems and that is because this is a relatively newer technology and not enough is known yet.

So in conclusion, both AE and PEM systems result in a delivered cost of at least $5.67/Kg of H2 - a long way away from $1.00/Kg.

Unless power is free, we can't hope to get anywhere near $1.00/Kg.