ORIGINAL RESEARCH

published: 27 May 2022

doi: 10.3389/fenrg.2022.909298

Determining the Production and

Transport Cost for H2 on a Global
Scale
Jason Collis and Reinhard Schomäcker *
Technische Chemie, Institute of Chemistry, Technische Universität Berlin, Berlin, Germany

Hydrogen (H2) produced using renewable energy could be used to reduce greenhouse
gas (GHG) emissions in industrial sectors such as steel, chemicals, transportation, and
energy storage. Knowing the delivered cost of renewable H2 is essential to decision-
makers looking to utilize it. The cheapest location to source it from, as well as the transport
method and medium, are also crucial information. This study presents a Monte Carlo
simulation to determine the delivered cost for renewable H2 for any usage location globally,
as well as the most cost-effective production location and transport route from nearly
6,000 global locations. Several industrially dense locations are selected for case studies,
the primary two being Cologne, Germany and Houston, United States. The minimum
delivered H2 cost to Cologne is 9.4 €/kg for small scale (no pipelines considered), shipped
from northern Egypt as a liquid organic hydrogen carrier (LOHC), and 7.6 €/kg piped
directly as H2 gas from southern France for large scale (pipelines considered). For small-
Edited by: scale H2 in Houston, the minimum delivered cost is 8.6 €/kg trucked as H2 gas from the
Rahul R. Bhosale, western Gulf of Mexico, and 7.6 €/kg for large-scale demand piped as H2 gas from
Qatar University, Qatar
southern California. The south-west United States and Mexico, northern Chile, the Middle
Reviewed by:
Yusuf Bicer, East and north Africa, south-west Africa, and north-west Australia are identified as the
Hamad bin Khalifa University, Qatar regions with the lowest renewable H2 cost potential, with production costs ranging from
Muhammad Aziz,
The University of Tokyo, Japan
6.7—7.8 €/kg in these regions. Each is able to supply differing industrially dominant areas.
*Correspondence:
Furthermore, the effect of parameters such as year of construction, electrolyser, and H2
Reinhard Schomäcker demand is analysed. For the case studies in Houston and Cologne, the delivered H2 cost is
[email protected] expected to reduce to about 7.8 €/kg by 2050 in Cologne (no pipelines considered, PEM
electrolyser) and 6.8 €/kg in Houston.
Specialty section:
This article was submitted to
Keywords: H2 electrolysis, network, techno-economic assessment, green hydrogen, hydrogen, cost
Hydrogen Storage and Production,
a section of the journal
Frontiers in Energy Research
INTRODUCTION
Received: 31 March 2022
Accepted: 02 May 2022
In order to combat climate change, many industrial sectors need to find ways to reduce greenhouse
Published: 27 May 2022
gas (GHG) emissions. (Rogelj, 2018) Growing industries such as steel and chemicals production,
Citation: which make up 7% (International Energy Agency, 2020) and 2% (Leimkühler, 2010) of global GHG
Collis J and Schomäcker R (2022)
emissions, respectively, are under political pressure to find low-carbon alternatives to the fossil fuels
Determining the Production and
Transport Cost for H2 on a
currently used in such sectors. Hydrogen gas (H2) has the potential to be used to reduce GHG
Global Scale. emissions in some industries, including steel production and energy storage. (Jarraud and Steiner,
Front. Energy Res. 10:909298. 2014) It does not produce carbon dioxide (CO2) or other carbon-based gases when burned, and when
doi: 10.3389/fenrg.2022.909298 produced through electrolysis using renewable energy, has a relatively low GHG emissions footprint.

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Collis and Schomäcker Delivered Cost Hydrogen Global

(International Energy Agency, 2019) Currently, most H2 is Christensen, 2020) and also national level H2 network
produced using fossil fuels, but there is a swift change optimization analyses, (Han et al., 2012; Baufumé, 2013;
underway to renewably produced H2, and it is expected that Hwangbo et al., 2017; Aditiya and Aziz, 2021) however no
both the total amount of H2 produced and the share of renewable studies were found that aim to find the minimum delivered
H2 will grow dramatically in the next few decades. (International cost (and associated location) to produce and transport
Energy Agency, 2019) It is crucial for industries planning to renewable H2 to a given location on a global scale. While
utilize renewable H2 to know how much it will cost and the most localized studies are useful in some cases, in reality, it may be
cost-effective location to obtain it from. more cost-effective to produce H2 in another country or
To evaluate the most cost-effective location for H2 production, continent with more abundant renewable resources.
both production and transport costs must be considered. A major Determining the most cost-effective location to purchase H2
component of production costs is electricity production, of which from, and the cost of the H2, is currently a major knowledge
wind and solar are the two most flexible and developed renewable gap and is essential information for stakeholders planning current
energy candidates. Places with strong wind or solar potential are or future processes that require renewable H2, especially if a
therefore more likely to be candidates for producing low-cost model could be tailored to their individual process needs. There is
renewable H2. Transport costs of H2 have been less investigated, also a large discrepancy between the H2 production costs
resulting in a potentially significant neglection of a major cost estimated by various studies (values ranging from
component of H2 cost. Estimations of the transport cost help to 1.5—14 €/kg) perhaps due to the variety of different
determine where the cheapest production location of H2 might be assumptions and locations that are used in the studies, which
for a particular desired use location. Possible transport methods can be confusing and intimidating to stakeholders interested in
include ship, truck, or pipeline. H2 can also be converted into a planning a process using H2 for a specific location. Knowledge of
variety of mediums for easier or cheaper transportation and the delivered H2 cost for a particular location, demand,
storage, including ammonia (NH3), liquid H2 (LH2), or electrolyser type and year would help to clarify these
organic compounds such as toluene known as liquid organic discrepancies for stakeholders planning such a process.
hydrogen carriers (LOHCs). (Preuster et al., 2016) While it is
costly and energy-inefficient to convert and re-convert gaseous
H2 to these mediums and back again, they are generally cheaper, BACKGROUND
easier and safer to transport and store than gaseous H2. Knowing
which of these transport mediums and methods is the most cost- H2 Production Methods
effective for the unique combination of H2 demand, location, year H2 is conventionally produced by a variety of fossil-fuel-based
of consumption, and other factors that each H2 consumer methods such as steam reforming (Kaiwen et al., 2018) or auto-
requires would be necessary information to these consumers thermal reforming from natural gas, (Khojasteh Salkuyeh et al.,
when developing the business case for their process. 2017) with about 80% of the 120 Mt of H2 produced worldwide
Also needed for future development and planning is to annually coming from natural gas and 98% from fossil fuels in
investigate which electrolyser types and transport mediums general. (Muradov, 2017) Steam methane reforming (SMR) is the
have the highest potential for cost reduction due to efficiencies most common production method, which reacts methane from
of conversion and further technological development. A natural gas with steam to form H2, CO and CO2 before being
stakeholder planning to purchase H2 for a steel mill built in further reacted in a “water-gas shift” reaction to produce CO2 and
2030 is not interested in using costs based on the year 2020, but H2. However, there is a relatively high GHG emissions impact
rather an estimation for costs at the time they want to build the associated with the SMR process (4.8 (Dufour et al., 2011)—11.9
mill. As well as smaller individual H2 consumers, it would likely (Spath et al., 2001) kg-CO2-eq./kg H2 for cradle-to-gate system
be the case that groups of large consumers, for example in boundaries). H2 can also be produced from coal gasification,
industrial parks, together require an extensive amount of which has an even higher GHG emissions impact of about 19 kg-
renewable H2. In these cases, large H2 pipelines could CO2-eq./kg H2. (International Energy Agency, 2019) As an
potentially be built from regions with the potential to produce economic fossil-fuel benchmark, SMR has a production cost of
vast amounts of renewable H2, similarly to the natural gas around 2.2 €/kg H2. (Gielen et al., 2019)
pipelines that exist today, for example between Russia and the Due to the need to reduce emissions of H2 production, low-
EU. Economies of scale could work in favour of these scenarios carbon production methods are being increasingly investigated.
and potentially reduce the H2 cost for consumers by reducing the The most commonly studied low-emissions H2 production
transport cost. Knowing if such pipelines are economically viable method is water electrolysis, which splits H2O into H2 and O2.
would help industrial and government stakeholders in planning (International Energy Agency, 2019) While H2 electrolysis
for future H2 transport networks. Government stakeholders want requires substantial amounts of electricity (39 kWh/kg H2 if
to ensure a reliable and cheap source of low carbon energy, and 100% efficient (Levene et al., 2007)), with quickly decreasing
must therefore also take geopolitical factors into account as the costs for renewable electricity from solar and wind sources, it is a
energy landscape shifts away from a dependence on fossil fuels to promising option for renewable H2 production, with solar-
renewables. powered H2 electrolysis having a GHG emissions impact of
Some studies have performed localized techno-economic about 2.0 kg-CO2-eq./kg H2. (Bhandari et al., 2014)
assessments on H2 electrolysis, (Glenk and Reichelstein, 2019; Electrolysis also produces the purest H2 of the major

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Collis and Schomäcker Delivered Cost Hydrogen Global

production methods, up to 99.999% for standard production

facilities. (Element Energy Ltd, 2018)
There are three major H2 electrolysis technologies: alkaline
(AE) electrolysis, proton exchange membrane (PEM) electrolysis,
and solid oxide electrolysis (SOE). AE electrolysis is the most
mature and developed production method, for which non-noble
metals such as nickel are used for the electrodes, and the
electrolyte is a concentrated lye. (Brauns and Turek, 2020) A
diaphragm keeps the two electrodes and their product gases
separate while allowing passage for water and hydroxide ions.
It is relatively cheap because it does not require as many high-
value materials, while also maintaining a relatively long lifetime of
around 75,000 h (International Energy Agency, 2019) It is
FIGURE 1 | Summary of the main possible usages of H2 by sector.
considered a low-temperature type of electrolysis, as it
operates between 40 and 90°C. (Rashid et al., 2015) The
weaknesses of AE electrolysis include a low partial load range
(10—110%) and operating pressure (1–30 bar). It currently fermentation, or solar thermochemical production routes.
makes up the largest share of electrolysers in commercial use. (Christopher and Dimitrios, 2012) Coupling fossil-fuel-based
(International Energy Agency, 2019) H2 methods with CCS uses up valuable CO2 storage space,
PEM electrolysis was first developed by General Electric in the which could be used for other sectors that do not have a GHG
1960s to overcome the weaknesses of AE electrolysis (Shiva emissions-free alternative technology. Other renewable-based
Kumar and Himabindu, 2019) and uses more expensive noble methods of H2 production such as photobiological H2
metals such as platinum or iridium as electrode catalysts while production or biomass combustion are not yet developed
utilizing a solid acidic polymer membrane to transmit protons enough to fill a significant market share or struggle with high
from the anode to the cathode. (Rashid et al., 2015) They also costs in comparison to electrolysis and fossil-fuel-based H2.
operate at relatively low temperatures between 20 and 100°C.
Advantages of PEM electrolysis include a compact design, high Uses of Renewable H2
efficiency, small footprint (0.048 m2/kW compared to 0.095 m2/ H2 is a versatile energy carrier that can be used in a wide variety of
kW for AE electrolysers), easy scalability, high H2 purity, and applications and industries. Currently, about 120 Mt of H2 is
perhaps most importantly, the H2 can already be produced at produced each year, used primarily for ammonia (NH3)
high pressures of 30—60 bar, reducing the need for energy- production, oil refining, and methanol production. (Gielen
intensive compression after production. (International Energy et al., 2019) As well as replacing the H2 produced from fossil
Agency, 2019) Weaknesses include a high investment cost, fuels that are used in these sectors, there is a range of other
especially as special construction materials are required due to applications where renewable H2 could replace fossil fuels. One
the corrosive environment. (Carmo and Fritz, 2013) Recently, major example is the steel sector, which is responsible for about
PEM electrolysis has been growing at a rapid rate since around 7% of global GHG emissions. (Collis et al., 2021) The most
2015, making up the largest share of new electrolyser projects. common route of steel production, the integrated steel mill, uses
(International Energy Agency, 2019) CO from coal gasification to reduce iron ore to pig iron. (Ho et al.,
The third main kind of electrolysis technology is solid oxide 2013) Renewable H2 could replace the coal used in this process,
electrolyser (SOE) cells. These are run at very high temperatures which would significantly reduce the GHG emissions of steel
of 700–1,000°C and are the least developed and used of the three production, the majority of which are caused by coal combustion.
major technology options, (Rashid et al., 2015) despite being (Germeshuizen and Blom, 2013) Demonstration steel mills using
theoretically able to reach stack efficiencies of almost 100%. H2 as a reduction agent are currently being built in several
(Brauns and Turek, 2020) Steam is used, requiring a high locations across Europe. (Bhaskar et al., 2020)
energy input, although the investment costs are relatively low H2 is also heavily used in the chemicals industry, where it is
as the electrodes are made of ceramic. (International Energy used to make base chemicals including NH3 and methanol, but
Agency, 2019) A ZrO2 solid is commonly used as the electrolyte. also more complex chemicals such as polymers and fuels. (Zang
(Laguna-Bercero, 2012) A negative aspect is that they have a et al., 2021) Synthetically produced fuels or e-fuels are expected to
relatively low lifetime (~20,000 h) due to high material grow in scale significantly as they are seen as promising options to
degradation, hindering their industrial adoption. Increasing the decarbonise the shipping (Lindstad et al., 2021) and aviation
durability and lifetime of SOE cells is currently undergoing (Scheelhaase et al., 2019) sectors, two industries that are difficult
research and development to improve their viability. (Wang to decarbonise using batteries or CO2 capture. (Ueckerdt et al.,
et al., 2020) 2021) In some use cases, H2 could also be directly combusted as a
Other methods of producing low-carbon H2 include fuel source. (Cai et al., 2020)
combining carbon capture and storage (CCS) with H2 H2 could also be used for small to large scale energy storage. As
produced from natural gas or coal, (Office of Energy renewably produced electricity takes up an increasingly larger
Efficiency and Renewable Energy, 2020) from biomass using share of electricity production, the intermittency of solar and

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Collis and Schomäcker Delivered Cost Hydrogen Global

wind power poses problems for the grid. Electricity supply could viable for the given H2 usage location, nor that the medium and
be much greater than demand during some hours, and much less mode of transportation selected are the most cost-efficient, as no
at other times. This excess renewable electricity could be different production locations are analysed and compared for
converted into H2 during the times the demand outpaces each H2 usage location. While the IEA also has an analysis on the
supply and re-converted when demand is greater than supply. production cost of renewable H2 across the globe, no transport
(Steilen and Jörissen, 2015) It could also be used in buildings as costs are included, making it impossible to determine the actual
small scale energy storage in the form of fuel cells, (Andaloro cheapest cost for obtaining renewable H2 for a particular location.
et al., 2019) or blended with natural gas to reduce the GHG (International Energy Agency, 2019)
emissions intensity of stove burners. (Zhao et al., 2019) Overall, it Many H2 production, distribution and usage networks have
is expected that H2 could provide 24% of total energy demand by been created, utilizing geo-analysis to create the most efficient
2050 within the EU, mainly across the transportation, building network for a particular country or region. (De-León Almaraz
and industry sectors. (Kakoulaki et al., 2021) A summary of the et al., 2012; Han et al., 2012; Baufumé, 2013; Hörsch and Brown,
usages discussed here is shown in Figure 1. 2017) Baufumé (2013) conduct a detailed simulation for a
Germany-wide H2 pipeline infrastructure in 2050; however,
the study assumes H2 fuel cell vehicles will be heavily used
Current Literature on H2 Networks and and focuses on H2 supply to fuelling stations, which is far
Economic Assessment from certain given their relatively high costs, low durability
A large number of studies have been performed assessing the and potential storage issues. (Wilberforce et al., 2017) Han
economics of electrolytic H2 production, with the most in-depth et al. (2012) and De-León Almaraz et al. (2012) simulate a
recent studies being Glenk et al. (Glenk and Reichelstein, 2019) detailed nationwide network for South Korea and Great
and Christensen. (Christensen, 2020) Most assessments usually Britain, respectively, complete with production, storage and
focus on a singular H2 production location for the base scenario. usage locations. Woo and Kim (2019) investigate the
While Christensen’s analysis is in-depth and detailed, the analysis effectiveness of several different algorithms (standard genetic
is only based on data for the country level for Europe and the state algorithm, hybrid genetic algorithm, genetic algorithm-based
level for the United States and does not account for the rest of the matheuristic) on a H2 supply chain network problem, with a
world. (Christensen, 2020) IEA (International Energy Agency, case study on Jeju island. In reality, as is the case with the current
2019) is the only study found to perform a global analysis on the energy market, H2 will likely often not be produced in the same
H2 production cost, which is based on a hybrid solar-wind country as it is used in. For example, Lahnaoui et al. (2021)
system, but the assumptions used in the analysis are unclear. optimize an in-depth network for Germany and France and find
No date of analysis is shown, and the nature of the hybrid system that Germany will likely have a greater H2 demand than supply,
and its capacity factor are not explained. Several important while in France production may be able to match consumption.
system costs are also not accounted for, resulting in very low However, due to geographical variations of solar irradiation and
H2 production costs of 1.6—4 €/kg, as is the case for many reports wind power density, in some regions renewable electricity is
by international agencies and businesses. (International Energy much cheaper than in others. For example, it may be cheaper
Agency, 2019; Hydrogen Council, 2020; International Renewable for France to obtain renewable H2 from north Africa or the
Energy Agency, 2020) For comparison, Christensen (Christensen, Middle East than producing it locally. Aditiya and Aziz (2021)
2020) and Glenk et al. (Glenk and Reichelstein, 2019), who uses technical, economic and social indicators to assess the
include a range of further costs required to build a functioning potential for an inter-country H2 network in the Asia-Pacific
H2 electrolysis system, such as compression and installation costs, region, including likely H2 production locations and potential H2
find H2 production costs in Europe to be between 6.5–14 €/kg in flows. However, the paper does not provide a network capable of
2020 and 5.1—9.1 €/kg in 2050. estimating production, transport or delivery costs for areas of
While calculating the H2 production cost is naturally essential high H2 demand.
information, it is likely that for many locations worldwide Instead of local models, an economic model with a global
importing renewable H2 that is produced somewhere else scope that could determine the cheapest point of H2 supply for
could be cheaper due to better solar or wind conditions. Most any desired end location would be useful for large future H2
studies do not consider transport costs, or if they do, only consumers. The closest such model found in the literature is that
consider one or two predefined scenarios. IEA has a created by Hwangbo et al. (2017), who present a stochastic mixed
considerably detailed breakdown of the transport costs for H2 integer linear model that optimizes for lowest cost while taking
and other mediums by several different transport modes, as well into account H2 production, storage, and transport. While the
as analysing the production and transport costs together for a few model is thorough and complex, it only considers H2 produced by
specific scenarios, such as producing H2 in Australia and shipping SMR, which has a very high GHG emissions footprint (4.8
it to Japan. (International Energy Agency, 2019) Likewise, the (Dufour et al., 2011)—11.9 (Spath et al., 2001) kg-CO2-eq./kg
Hydrogen Council has analysed the total costs for several supply H2). A similar cost-optimized global model focusing on
chain scenarios, such as the Middle East to the EU and Chile to renewably produced H2 would be more applicable for the next
the US, including transport and conversion costs. (Hydrogen few decades, as most H2 will have to be produced from low-
Council, 2021) However, it is not clear if the H2 production emissions methods in order to meet the goals of the Paris
locations chosen for these scenarios are the most economically agreement. (IEA. Global, 2017) Additionally, the case study

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Collis and Schomäcker Delivered Cost Hydrogen Global

take advantage of economies of scale. Several industrial parks

within Europe are investigated and proposals for such pipelines
are presented, along with the associated cost reductions. Large-
scale pipelines are especially important for scenarios in later years
(2035—2050), as by this time it is expected the volumes of
renewable H2 being consumed will be much greater than at
present, and more processes will be adapted to use H2 instead
of fossil fuels (such as steel production).
The study has a geographically global scope, although it uses masks
to remove areas of unfeasible terrain for H2 production facilities, such
as mountains, farmland, cities, and protected areas. From a process
perspective, the scope includes the whole value chain until the time the
H2 reaches the purchaser, which can be broken down into production
of H2 and transport of H2, as shown in Figure 2. Blending H2 into
natural gas pipelines is not considered in this study, as for many
chemical processes relatively pure H2 is required.
A grid-connected electrolyser is not within the scope of this
study due to the difficulty of dealing with differing electricity prices,
taxes, levies, curtailment data and emissions footprints for each
FIGURE 2 | Scope of the study showing the two main parts, H2 country individually. Additionally, offshore wind is not considered
production and transportation. Everything within the dotted lines is the scope in this study due to the high degree of complexity it would add to
of the study. Transport is either directly to the destination (if possible) by truck the spatial analysis—it is very unlikely that H2 will also be produced
or pipeline, or else it is shipped from the nearest port to the closest port
offshore, which opens an excessive range of scenarios for where the
to the destination. If both transportation routes are possible, the more cost-
effective is chosen. H2 would actually be produced. Additionally, data on promising
offshore wind locations are scarce due to the logistical complexity
of building offshore wind systems with regards to ocean depth,
presented by Hwangbo et al. (2017) focuses on production, currents and tides, and ocean sovereignty. In most cases, it is more
storage and transportation in South Korea. While this would expensive than onshore wind (International Renewable Energy
be interesting for public bodies or companies for infrastructure Agency, 2016) and it is likely there would be few scenarios in this
planning, large H2 consumers also need information on the most study where it would provide cheaper electricity than onshore wind
cost-effective global H2 production site, as well as transport power. (Green and Vasilakos, 2011)
method and route for their individual situation of H2 demand, Hybrid wind-solar systems are also not considered in the
location, and build year. scope of this study, due to the large degree of added complexity
regarding operating times, size of each power source, and
resulting capacity factor. While hydropower could be used in
GOAL AND SCOPE some locations, many countries do not have access to hydropower
resources and as hydropower is considered to have a greater
The goal of the study is to create a model to evaluate the most environmental impact, it is not accounted for in this study.
cost-effective location to produce H2 using a solar or wind- (Botelho et al., 2017)
powered electrolyser for a variety of usage locations, as well as
the identification of the most cost-efficient H2 production sites Scenario Definition
and transport routes to meet global renewable H2 demand. For It is possible to investigate a large variety of scenarios where
example, if renewable H2 is to be used in Cologne, Germany, the current knowledge gaps exist, such as different geographic
goal is to find the location globally with the lowest cost to produce regions, electrolyser types, years, and H2 demand. The base
and transport the desired amount of H2 to Cologne, using solar or scenario is defined as an alkaline electrolyser producing
wind to power an electrolyser. As currently electrolytic H2 makes 100 kt/y H2 in the year 2030 with the desired end location in
up only 0.5% of global H2 supply, (International Energy Agency, Cologne, Germany. Other scenarios and parameters that are
2019) and production is expected to grow substantially in the analysed are done so by altering variables from this base
medium term, it is expected that many new electrolyser sites will scenario. The full range of scenarios investigated in this study
be built in the next few decades. Determining the most cost- is listed below. Any of the below variables can be altered to best
effective location for these sites is beneficial for H2 producers and simulate the conditions applicable to individual stakeholders for
consumers. planning purposes, creating thousands of possible scenarios, as
While the most cost-effective H2 production location for shown in the Supplementary Figure S3.
individual processes is important information for that process,
if there are multiple processes located close to each other End (H2 usage) location (exact GPS oordinates):
requiring a large amount of H2, for example in industrial
parks, it could be feasible for larger pipelines to be built to • Cologne, Germany (50.9763, 6.9818)

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Collis and Schomäcker Delivered Cost Hydrogen Global

• Abu Dhabi, UAE (24.2780, 54.4835) as the largest currently conceptualised electrolysers have
• Tokyo-Yokohama, Japan (35.6205, 139.8965) capacities of around 10 GW, renewable H2 production plants
• Guangzhou, China (23.0550, 113.4242) larger than this are currently unimaginable, and therefore are not
• Houston, USA (29.6084, -95.0527) considered in this study.
The year 2030 is chosen as the base scenario as it is near
H2 produced (electrolyser size assuming electrolyser efficiency enough in the future to have more certain predictions on cost data
of 0.7): but far enough that renewable H2 production will likely be
considerably higher than it is today. 2030 is also seen as a
• 2 kt/y (20 MW—largest electrolyser available today) short-term goal for GHG emissions reduction and many
• 10 kt/y (100 MW—largest electrolysers in construction) governments and industries are investigating what can be
• 100 kt/y (1000 MW—mass H2 production in future accomplished by this year, resulting in a range of predictions
facilities) on renewable H2 production and cost in 2030. The years 2040 and
• 1000 kt/y (10 GW—largest conceptual H2 production 2050 are also examined, with 2050 being a mid-term goal for
facilities for 2030) many countries to reach net-zero GHG emissions. (Net Zero
Tracker, 2021) Although renewable H2 production will likely be
Year higher still in 2040 or 2050, there is higher data uncertainty
associated with looking further into the future. The present time
• 2020 of the data used in this study (2020) is also considered due to the
• 2030 relative certainty of data on costs; it could also be useful to
• 2040 stakeholders considering planning or constructing H2
• 2050 electrolysers in the short term.
All three major kinds of electrolysers are investigated in this
Electrolyser type: study: AE, PEM and SOEs. As AE electrolysers are the most
mature and commonly used technology, (International Energy
• Alkaline (AE) Agency, 2019) they are taken as the base scenario. However, all
• Polymer electrolyte membrane (PEM) three kinds of electrolysers are being further developed and
• Solid oxide electrolyser (SOE) studied and it is possible in the future that another kind could
control the dominant market share, or even a more even spread
Medium conversion and reconversion between the three kinds. Therefore, it is still important to consider
each of them in this study.
• Centralised When gaseous H2 is converted to a medium such as NH3, LH2
• Decentralised or LOHCs for cheaper and easier transportation, it must be re-
converted to gaseous H2 either at a distribution centre such as a
The locations were selected based on being areas of high port or the final usage location. When this is done at a large-scale
industrial importance, in particular containing industries that distribution centre, known as centralised reconversion,
are likely to require renewable H2 in the future, such as chemicals economies of scale play a role in reducing reconversion costs.
and steel production. Additionally, the locations all have However, when reconversion is performed at each end-user
substantial civilian populations, which would require (decentralised reconversion), it can be more expensive,
significant H2 if building heating and cooking utilizes H2 in especially for very small end-users such as a H2 fueling
the future. Cologne was chosen as the base scenario due to the station. Centralised reconversion is assumed to be the case for
large amounts of steel and chemical industry in the area, which the baseline scenario as the H2 consumption is relatively large.
includes not only the Ruhrgebiet area of Germany but also
Belgium and the Netherlands. The exact locations were
selected to be locations of already existing steel and chemical DATA COLLECTION AND PROCESSING
manufacturing areas.
The electrolyser sizes were chosen in order to have a large Data Collection
range of capacities, from the largest electrolysers available today Firstly, possible H2 production sites had to be determined, as it is
to large-scale H2 production that would be required in future not feasible for manufacturing facilities to be built in
facilities. However, it is conceivable that even larger H2 mountainous areas, cities, farmland or protected areas.
production facilities will be required in the future. A singular Geographic masks were used to determine spaces appropriate
steel mill producing 2 Mt of steel annually would require about for production. The “practical PV potential” data set provided by
144 kt of H2 to fully decarbonize using H2. (Hoffmann et al., Global Solar Atlas was used to mask unsuitable areas, of which the
2020) As steel production is only predicted to grow over the next “Level 1” masks were chosen. (ESMAP. Global, 2020) These
decades, reaching 2200 Mt annual production by 2050, (Bellevrat masks exclude ‘areas due to physical/technical constraints,
and Menanteau, 2009) immense quantities of H2 will be needed to such as rugged terrain, presence of urbanized/industrial areas,
decarbonise the steel industry, not to mention the myriad of other forests, and areas that are too distant from the centres of human
industries requiring renewable H2, such as chemicals. However, activity’, as well as “areas that might be unsuitable due to

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Collis and Schomäcker Delivered Cost Hydrogen Global

FIGURE 3 | Global network of shipping routes created from AIS data, used to evaluate the shortest shipping distance between ports.

regulations imposed by national or regional authorities (such as used to determine the shortest path between the two desired ports
conservation of cropland or nature conservation)”. From the and is shown in Figure 3.
remaining area, one location at every full digit of latitude and
longitude (e.g., 47, -52) was taken to create a set of 5970 possible
distinct locations which represent the available global area where MODEL DESCRIPTION
a H2 production facility could be constructed. The Python library
Rasterio was used to apply the geographic masks and retrieve the A model in Python was constructed that takes as input the H2
annual solar energy potential (kWp) of each possible location. demand in kt/y, the year that the facility will be constructed, GPS
(Mapbox. Rasterio, 2016) Wind power density (W/m2) was coordinates of the desired end location, the type of electrolyser, if
obtained for each identified production location from Global pipelines are permitted (and if so, the maximum pipeline length),
Wind Atlas. (Technical University of Denmark, 2021) A map of and if the distribution centres are centralised or decentralised. As
European industrial emitters provided by the project well, many of the economic parameters can be adjusted if desired,
Carbon4PUR was used to determine important locations in such as the interest rate and the full load hours of the electrolyser
Europe that might require renewable H2 in the future. per year. The model calculates the cost to produce H2 at each of
(Carbon4PUR, 2020) the possible H2 production locations derived in Data Collection
and Assumptions, followed by the transport cost from each of
Creation of Shipping Network these locations to the desired end location. The location with the
In order to calculate the most cost-effective method of minimum sum of production and transportation cost is therefore
transportation from production sites to the desired end the most cost-effective location to produce H2 for the desired end
location, the shipping distance between the production and location.
end locations had to be determined. A shapefile of world A Monte-Carlo simulation was conducted on the Python
shipping routes based on Automatic Identification System model to effectively cover the reasonable range of cost
(AIS) data was obtained from NCEAS. (Halpern et al., 2015) uncertainties. Particularly in future scenarios, uncertainties for
A network was created from this shapefile using the Python electrolyser investment and operating costs are relatively large,
module created by Benita et al. (2019) although several changes with high range estimates being up to 600% of low range
were required to the module code for it to produce a working estimates. (Glenk and Reichelstein, 2019) Using a Monte-Carlo
network of shipping routes, such as not simplifying the resulting simulation, the uncertainties of these variables are accounted for
network by removing intermediate nodes, and the connections using probability distributions. The probability density functions
between nodes that crossed over the International Date Line had of each variable were determined using the methodology
to be manually added. A list of global ports and their associated presented by Hawer et al. (Hawer et al., 2018)
port codes and global positioning system (GPS) locations was
obtained from Novikov (2019) which was used to find the closest Production Cost
port to every possible production location as well as the desired Firstly, the capacity of the electrolyser required (S) was calculated
end location. These ports represented the possible start and end from the H2 demand in tons per hour (F) and the electrolyser
nodes of the shipping network. It should be noted that the nodes efficiency (ηE):
are positioned 20 km offshore from the ports to ensure shipping
39F
paths don’t overlap the coastline. Therefore, 40 km is added to the S
in [MW]
ηE
distance of every shipping route. The finished network was then

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Collis and Schomäcker Delivered Cost Hydrogen Global

TABLE 1 | Parameters and distributions used in Monte-Carlo simulation of the production cost of H2 from electrolysis in 2020.

Parameter Unit Lower bound Middle Upper bound Distribution Source

Wind CapEx €/kW 1200 1260 1500 Triangular International Renewable Energy Agency, (2012)
Wind OpEx €/MWh 6 8 10 Triangular International Renewable Energy Agency, (2016)
Solar CapEx €/kWp 500 700 1100 Triangular Mayer et al. (2015); Jäger-Waldau. (2019)
Solar OpEx factor − 0.01 0.015 0.02 Triangular Mayer et al. (2015); Jäger-Waldau. (2019)
AE electrolyser CapEx €/kW 477 830 1060 Triangular Glenk and Reichelstein, 2019); Christensen. (2020)
PEM electrolyser CapEx €/kW 322 994 1731 Triangular Glenk and Reichelstein. (2019); Christensen. (2020)
SOE CapEx €/kW 566 1131 1912 Triangular Glenk and Reichelstein. (2019); Christensen. (2020)
Electrolyser CapEx growth − 0.975 0.98 0.995 Triangular Christensen, (2020)
Electrolyser OpEx − 0.01 0.015 0.02 Triangular Brynolf et al. (2018)
AE electrolyser efficiency − 0.67 − 0.7 Uniform International Energy Agency, (2019)
PEM electrolyser efficiency − 0.58 − 0.6 Uniform International Energy Agency, (2019)
SOE efficiency − 0.77 − 0.81 Uniform International Energy Agency, (2019)
AE external electrolyser CapEx €/kg H2 2.30 2.47 2.65 Triangular Parks et al. (2014)
PEM external electrolyser CapEx €/kg H2 0.8 0.91 1 Triangular Parks et al. (2014)
SOE external CapEx €/kg H2 2.30 2.47 2.65 Triangular Parks et al. (2014)
Electrolyser water €/kg H2 0.05 0.07 0.09 Triangular Christensen, (2020)

The coefficient 39 represents the amount of electricity a consisting of the renewable electricity production cost) and
theoretical 100% efficient electrolyser takes to produce H2 annualised electrolyser CapEx. (Chiuta et al., 2016) The
(39 kWh/kg H2). (Christensen, 2020) The total amount of change of parameters over time was calculated using the
electricity required (ER) is then equal to the electrolyser expected change per year to the power of the number of years
capacity (S) plus the electricity required for H2 compression (C): after the base year (2020):
ER
S + C in [MW] Varx
Var2020 pΔ(x−2020)
Yr

For each location, the levelized cost of electricity (LCOE) for Where Var is a variable that is expected to undergo yearly changes, x
the required electricity amount was determined for both solar and is the year of the study, and ΔYr is the yearly change of the variable.
wind power, and the cheaper of the two power sources was used The parameters used in the Monte-Carlo simulation are shown
as the electricity source for the electrolyser. The LCOE was along with the lower and upper bounds and associated distribution
calculated by dividing the total life cycle cost by the total in Table 1. A full list of economic assumptions relating to the
lifetime power produced (Branker et al., 2011): production cost of H2 is shown in Table 2.

I(1+r)
t +Mt
t €
LCOE
Et in   Transport Cost

(1+r)t kWh Four different transport mediums are considered: gaseous H2, LH2,
ammonia (NH3), and a sample LOHC (toluene). Cost functions for
Where It is the initial investment required (CapEx), Mt is
shipping, trucking and piping these mediums as a function of
maintenance and operational expenditures (OpEx), Et is the
distance were derived from IEA, (International Energy Agency,
total electricity generated, r is the discount rate of the project,
2019) which includes the costs of any intermittent storage that is
and t is the lifetime of the system. The individual wind turbine
required. Not each of the three transport methods can be used for all
power (PW) was calculated using the following formula:
four transport mediums; while NH3 can be shipped, trucked or
PW
WPDpηW pL2B pπ in [W] piped, LOHCs and LH2 can only be trucked or shipped, and gaseous
H2 can only be trucked or piped. Driving distances between locations
Where WPD is the wind power density [W/m2], ηW is the wind were calculated using the OSRM API. (OSRM, 2020) Pipeline
turbine efficiency, and LB is the length of the turbine blades. The distances were determined as straight-line distances over the
solar array size required (SA) [kWp] was calculated by dividing Earth’s surface, using the Python library GeoPy, (GeoPy
the yearly electricity demand (Et) [kWh] by the solar energy Contributors, 2018) with 20% of the straight line distance added
potential (SP) [kWh/kWp] for each production location: on to account for necessary deviations over unsuitable land such as
SA
Et SP in kWp private land or areas of rough terrain. Shipping distances were
evaluated using the created shipping network (see Creation of
From here, the CapEx of the wind and solar power required Shipping Network); firstly, the nearest port to each production
can be directly calculated by multiplying with the appropriate site as well as the desired end location was determined from a
CapEx factors (Table 1) and then used in the LCOE list of global ports; then, a “closest node” search of the shipping
formula above. network revealed the nearest node to the port. Dijkstra’s algorithm
Once the LCOE has been determined, the H2 production cost was implemented over the shipping network using the Python
was evaluated by summing the electrolyser OpEx (mostly package NetworkX (NetworkX Developers, 2014) to find the

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Collis and Schomäcker Delivered Cost Hydrogen Global

TABLE 2 | Static economic parameters assumed for the production cost of H2 in 2020. “Growth per year” refers to the assumed increase of the parameter, per year from
2020, if the electrolyser was to be built in a future year.

Parameter Value Unit Reference

AE electrolyser lifetime hours 75000 hrs International Energy Agency, (2019)

AE electrolyser lifetime hours growth per year 1667 hrs International Energy Agency, (2019)
PEM electrolyser lifetime hours 60000 hrs International Energy Agency, (2019)
PEM electrolyser lifetime hours growth per year 2250 hrs International Energy Agency, (2019)
SOE lifetime hours 20000 hrs International Energy Agency, (2019)
SOE lifetime hours growth per year 2167 hrs International Energy Agency, (2019)
AE electrolyser efficiency growth per year 0.00267 − Christensen, (2020)
PEM electrolyser efficiency growth per year 0.004 − Christensen, (2020)
SOE efficiency growth per year 0.00267 − Christensen, (2020)
Wind power CapEx growth per year -0.0225 - Christensen, (2020)
Wind turbine efficiency 0.4 − International Renewable Energy Agency, (2016)
Wind turbine blade size 50 m International Renewable Energy Agency, (2016)
Wind turbine lifetime 30 y Christensen, (2020)
Solar power CapEx growth per year -0.0014 − Christensen, (2020)
Solar efficiency 0.64 − Jäger-Waldau, (2019)
Solar efficiency growth per year 0.00333 − Jäger-Waldau, (2019)
Solar PV lifetime 30 y Christensen, (2020)
Compressor electricity consumption 4 MWh/ton H2 Parks et al. (2014)
Full load hours 2000 hrs/y Christensen, (2020)
Discount rate 0.08 - Brennan, (2020)
Further CapEx costs (piping, electrical) 43 €/kW Glenk and Reichelstein, (2019)

shortest path between the start port of each production site and the Model Assumptions
end port, as well as the length of the path. It is assumed that the electrolyser is directly connected to the
The most cost-effective transport method between the possible H2 renewable energy source and is not connected to the grid.
production locations and the desired end location had to be Consequently, the operating time of the electrolyser is the
determined. The possible transportation options are shown in same as the capacity factor of the renewable electricity source.
Figure 4 for example production and usage locations, namely a Additionally, no assumptions are made as to the political stability
solar power plant in Spain to a steel mill in Germany. Firstly, the and safety of areas; as the study considers years until 2050, it is
driving distance between the production and end location was difficult to predict the stability of regions into the future. It is
calculated. If the route existed and was less than 1,000 km, a direct assumed that terrain suitable for building solar and wind plants is
truck between the production and end location was considered an also appropriate for construction of electrolysers and their
option, and the cost for trucking the required distance was calculated. associated operations, as the terrain is usually flat and with
Secondly, the pipeline distance was also calculated as the direct enough space for a comparatively small electrolysis plant.
distance between the production location and the usage location, Regarding the shipping network, it is assumed that the nearest
with an additional 20% added to account for the fact that most port to the production site can be used for shipping H2. While this
pipelines cannot be built in a straight line, and the associated pipeline is likely the case for most ports, there may be some cases where
cost determined. Next, the cost for shipping was evaluated, which in the port lacks the infrastructure required to ship industrial
reality is a three-step transportation process; the produced H2 must be chemicals. In other situations, the nearest port may lie in a
either piped or trucked from the production location to the nearest different country, which could add extra tariffs to trade (or in
port, then shipped to the port closest to the end location, and finally the most extreme cases, deny access to the port). However, as this
trucked or piped from the end port to the end location. data is both highly uncertain and impractical to obtain for every
To determine which transportation option and medium was possible production site, the authors assume that each production
the cheapest, each complete ‘production site to end location site can freely ship from the port closest to it. Due to the high costs
route’ was calculated for each medium possibility, with two associated with the conversion of H2, it is assumed that
possible conversion and re-conversion points. The gaseous H2 converting and re-converting more than once is not
produced can be converted to other mediums either at the economically viable and is therefore not considered.
production site or the start port, and re-conversion could
occur at the end port or the desired end location. The
assumed conversion, re-conversion and export costs are shown RESULTS
in Table 3. It should also be noted that there are also
technological and environmental differences between the Global Production and Transport Cost
different transport mediums. As the model only accounts for Results
the economic cost of the transportation medium, these are This section discusses the cost of producing H2 for the baseline
discussed in Transport Cost Analysis. scenario, including transport to each of the five locations specified in

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Collis and Schomäcker Delivered Cost Hydrogen Global

FIGURE 4 | Example showing the possible transport options from the production locations to the desired usage location. H2 can be trucked or piped directly to the
usage location, or it can be trucked or piped to the nearest port and shipped to the port closest to the usage location, from where it is trucked or piped to the usage
location. The gaseous H2 produced can be converted into other mediums at the production location or start port and re-converted at the end port or usage location.

TABLE 3 | Costs of conversion and re-conversion from and to gaseous H2, as well production cost ranges from 6.7—11.4 €/kg H2 (average standard
as export costs for each medium (International Energy Agency, 2019). deviation 0.37 €/kg H2), with the lowest cost areas being northern
Africa and the Middle East (7.0—7.5 €/kg), the central Andes
Medium Cost (€/kg)
around southern Peru, Bolivia and northern Chile
Conversion to NH3 1.02 (6.7—7.8 €/kg), the south-west of the United States and western
NH3 export costs 0.11 Mexico (7.0—7.4 €/kg), south-west Africa around Namibia and
Re-conversion from NH3 (centralised) 0.85
Re-conversion from NH3 (decentralised) 1.13
western South Africa (7.0—7.4 €/kg), Mongolia and northern
Conversion to LH2 1.03 China (7.2—7.7 €/kg), and north-west Australia (7.2—7.3 €/kg)
LH2 export costs 0.88 all offering large areas with production costs lower than 7.5 €/kg
Re-conversion from LH2 (centralised) 0.02 H2. More expensive production areas include most of Europe and
Re-conversion from LH2 (decentralised) 0.02 central Asia, as well as south-east and central China, coastal west
Conversion to LOHC 0.41
LOHC export costs 0.10
Africa and the eastern half of the United States and Canada, due to
Re-conversion from LOHC (centralised) 1.10 their relative lack of either solar or wind power potential.
Re-conversion from LOHC (decentralised) 2.35 The transport cost from each of the production locations to
Cologne is shown in Figure 6. As expected, the area around Cologne
has the lowest transport cost, slowly increasing as the distance from
Scenario Definition. Firstly, the H2 production cost at each of the Cologne increases, with the closest measured location having a
possible production sites selected (described in Data Collection and transport cost of 0.56 €/kg H2. Once the distance from the
Assumptions) was calculated and is shown in Figure 5. The production site to Cologne surpasses around 1,000 km, in most

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Collis and Schomäcker Delivered Cost Hydrogen Global

FIGURE 5 | Production cost of H2 at each of the 5970 studied locations for the baseline scenario (100 kt/y AE electrolyser in 2030, centralised reconversion).
Results are from a Monte Carlo simulation with 1,000 iterations.

FIGURE 6 | The transport cost of H2 to Cologne, Germany, in the baseline scenario (100 kt/y AE electrolyser in 2030, centralised reconversion), from each of the
5970 selected global locations. Black dots represent locations where possible transport routes could not be found. Pipelines are not considered in this scenario. All
transport mediums are considered. Results are from a Monte Carlo simulation with 1,000 iterations.

cases becomes more economical to transport the H2 to the nearest coast, whereas locations where NH3 is cheaper are further inland.
port and ship it to Cologne rather than truck it directly, unless the This is because it is slightly cheaper to ship LOHCs than NH3, but
production location is far from a port. It should be noted that all more expensive to truck them, meaning that for locations far inland
mediums are considered in Figure 6. For example, for a production that must be trucked a long distance, it is cheaper to use NH3. For
location in South Africa, it might be more economically feasible to other locations close to the coast, LOHCs are the more cost-effective
convert the H2 to NH3, whereas in India converting to a LOHC medium. LH2 is not preferred from a cost perspective for any
might make more financial sense. production location, due to the combination of high conversion
The most cost-effective transport medium for each of the and export costs as well as high shipping and trucking costs per
production locations is shown in Figure 7. For the baseline kilometre.
scenario with H2 required in Cologne, LOHCs are the most cost-
effective transport medium for 64% of the production locations,
followed by NH3 being the cheapest for 34% of the production Case Studies for Particular H2 Usage
locations. H2 gas is the cheapest only for 1.2% of production Locations
locations, all of which are locations closely surrounding Cologne, Figure 8 shows the total delivered cost of producing and
as the costs for trucking gaseous H2 increase quickly with respect to transporting H2 to Cologne, Germany, from each possible
distance. The locations where LOHCs are cheaper are closer to the H2 production location. The mean of the Monte Carlo

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Collis and Schomäcker Delivered Cost Hydrogen Global

FIGURE 7 | The most cost-effective transport medium for H2 required in Cologne, Germany, in the baseline scenario (100 kt/y AE electrolyser in 2030, centralised
reconversion), from each of the 5970 selected global locations. Pipelines are not considered as a transport method in this scenario. Results are from a Monte Carlo
simulation with 1,000 iterations.

FIGURE 8 | The total delivered cost (production and transport cost) of H2 required in Cologne, Germany, in the baseline scenario (100 kt/y AE electrolyser in 2030,
centralised reconversion), from each of the 5970 selected global locations. Black dots represent locations where possible transport routes could not be found. All
transport mediums are considered. Results are from a Monte Carlo simulation with 1,000 iterations.

simulation for each location was taken for the visualizations in The total delivered cost for the other studied locations is
this section. The costs range from 9.4—16.9 €/kg H2 (average shown in Figure 9. For Abu Dhabi, the total costs reach lower
standard deviation 0.31 €/kg H2), with the cheapest overall values when compared to Cologne, with costs as low as 8.4 €/kg.
location being at (28, 34) near Sharm El-Sheikh, Egypt, with The cheapest locations are directly around Abu Dhabi in the
the H2 being converted to a LOHC, shipped to the closest port UAE, closely followed by Oman and southern Iran
to Cologne and trucked the rest of the way before being (8.9—9.8 €/kg). In the case of UAE and Oman, the H2 is
reconverted. In general, there are an abundance of locations transported by truck either in gaseous form, which although is
that could supply cheap renewable H2 to Cologne, with the more expensive than transporting NH3 or LH2, avoids the
cheapest production locations being in coastal north Africa expensive conversion and re-conversion costs. From southern
(9.8—10.5 €/kg), the Middle East (9.8—11.0 €/kg), southern Iran, the H2 is transported in gaseous form to the nearest port,
Spain (9.6—10.6 €/kg), and the area directly around Cologne where it is converted to NH3 or LOHCs, shipped across the
(9.9—10.9 €/kg), closely followed by the other aforementioned Persian Gulf to Abu Dhabi, and re-converted. No locations
low-cost generation areas. Western Germany’s relatively high outside the Middle East offer costs under 9.4 €/kg. For Abu
H2 production costs (9.2—9.4 €/kg) are offset by the very low Dhabi and indeed most locations in the Middle East, using
transportation distance to the usage location. renewable H2 produced in the Middle East is the most

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Collis and Schomäcker Delivered Cost Hydrogen Global

FIGURE 9 | The total (delivered) cost per kg of producing and transporting H2 to Abu Dhabi (A), Tokyo (B), Guangzhou (C), and Houston (D), from each of the 5970
selected global locations. Black dots represent locations where possible transport routes could not be found. The rest of the parameters remain the same as for the
baseline scenario (100 kt/y AE electrolyser in 2030). Results are from a Monte Carlo simulation with 1,000 iterations.

desirable solution. As most of the region is very sunny, most Lastly, the cheapest production locations for H2 required in
countries will be able to produce renewable H2 at low costs Houston are in the western Gulf of Mexico, in a relatively large
themselves, reducing their energy reliance on other countries, as area directly around Houston with total costs ranging from
well as transport costs. Most countries in the region have a strong 8.6—9.4 €/kg, from where the H2 can be trucked in gaseous
chemical and energy industry already and that expertise and form to the desired usage location. This area is relatively
infrastructure could be useful for renewable H2 generation. sunny, and although it has higher production costs than
The minimum cost to produce and transport renewable H2 to coastal south-west United States, the proximity to the usage
Tokyo-Yokohama is 9.0 €/kg, from a location to the north of location and thereby low transport cost outweigh the
Tokyo utilizing wind power. However, most other areas in Japan difference in production cost. The next cheapest locations
are considerably more expensive, with the bulk ranging from include the coastal regions of southwest US and west Mexico
10.0—11.0 €/kg. It is possible that these smaller areas with strong (9.1—9.8 €/kg) and northern Chile (9.1—9.6 €/kg). The other low
renewable potential within Japan will not be able to produce production cost areas such as the Middle East (9.7—10.2 €/kg)
enough H2 for the country’s requirements. Also, Japan might and north-west Australia (9.4—9.8 €/kg) are slightly more
utilize these areas renewable potential to produce electricity for its expensive than for the other usage locations studied, due to
population, instead of renewable H2. The safest most cost- the large shipping distances required to transport the H2 to
effective options for the Tokyo-Yokohama region are north- Houston. Therefore, it is likely that renewable H2 for the
west Australia and north Chile, with both having costs ranging Houston area could be produced within Texas, allowing for
from 9.3—9.8 €/kg. Indeed, Japan has already signed a energy independence.
partnership agreement with Australia to secure a supply of
renewable H2 in the future. (FuelCellsWorks. Australia, 2020; Distribution of Results
Taylor, 2021) The Middle East (9.4—10.0 €/kg) and the west coast The Monte Carlo simulation resulted in a distribution of costs
of Mexico (9.3—9.9 €/kg) are also strong alternatives. for each production location analysed. Shown in Figure 10 are
For Guangzhou, the cheapest production location including the distributions of the four major cost components calculated
transport is the coastal regions of south-west US and west Mexico for the production site near Cairo with the lowest total cost per
(8.6—9.6 €/kg). Again, northern Chile (8.7—8.9 €/kg), north- kg of H2 for the baseline scenario; the total cost of H2 (including
west Australia (9.0—9.4 €/kg) and the Middle East transport to Cologne) (subplot A), the production cost of H2
(9.0—9.7 €/kg) are also very promising production locations. (subplot B), and the cost of wind (subplot C) and solar (subplot
From these regions, the H2 is converted into either NH3 or D) electricity. All distributions resemble normal distributions
LOHCs and shipped to Guangzhou. Costs in the region with differing variances. Producing H2 at this location near
directly around Guangzhou range from 9.3—10. €/kg. The Cairo and transporting it to Cologne has a mean total cost of
region is relatively cloudy and lacks consistent strong winds, 9.4 €/kg with a standard deviation of 0.43 €/kg. The production
resulting in locally renewably produced H2 being significantly cost has a mean of 6.6 €/kg and a standard deviation of 0.39/kg.
more expensive than importing it, despite the additional The distribution of the production cost is the same as that of the
transportation costs. total cost but shifted by 2.2 €/kg, which is the transportation

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Collis and Schomäcker Delivered Cost Hydrogen Global

FIGURE 10 | Distributions of the total (delivered) H2 cost including transport (A), the production cost (B), and the cost of wind (C) and solar (D) electricity from the
Monte Carlo analysis (1,000 iterations) of the baseline scenario (100 kt/y AE electrolyser in 2030, H2 usage location in Cologne, centralised reconversion). The
distributions represent the costs of the production site with the lowest total cost of H2 per kg, in Cairo, Egypt.

FIGURE 11 | Cost per kg of producing and transporting H2 to Cologne and Houston for each electrolyser type from 2020–2050. The other parameters are the
same as for the baseline scenario (100 kt/y capacity, centralised reconversion). Results are the average from a Monte Carlo simulation with 1,000 iterations.

cost. As the transportation cost parameters are not included in Parameter-Specific Results
the Monte Carlo simulation, the shape of the distribution of the The effect of changing other model parameters, such as the type
total cost and production cost are the same. The cost of wind of electrolyser used, the year the plant will be constructed, and the
electricity at this location averages 32 €/MWh with a standard size of the plant was also analysed. In Figure 11, how the total cost
deviation of 1.5 €/MWh, while solar electricity costs on average in €/kg H2 is expected to change over time is shown for the three
48 €/MWh with a standard deviation of 7.8 €/MWh. Wind major electrolyser types for usage locations in Cologne and
electricity is the cheaper option at this location, although it Houston. The mean value of the ‘total cost’ distribution in
has a much lower standard deviation due to the greater certainty Figure 10 is shown. The study found that costs are expected
of wind power costs. Therefore, the electricity cost from wind to decrease in the future for all electrolyser types due to
power is also more certain than the electricity cost from improvements in electrolyser design and efficiencies. Using AE
solar power. electrolysers, the lowest calculated total cost for H2 required in

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Collis and Schomäcker Delivered Cost Hydrogen Global

FIGURE 12 | Lowest cost of producing and transporting H2 to Cologne, Houston and Guangzhou for the baseline scenario (100 kt/y AE electrolyser in 2030),
showing both centralised and decentralised reconversion to gaseous H2. Results are from a Monte Carlo simulation with 1,000 iterations.

Cologne decreases from 10.2 €/kg in 2020 to 8.6 €/kg by 2050, a cheapest H2 would be already transported in gaseous form by
drop of about 16%. PEM electrolysers are currently slightly more trucks from a production site close by; therefore, conversion is
expensive (10.3 €/kg in 2020) but are projected to have a stronger not necessary. In this case, the trucks could be directly dispatched
reduction in costs of 26% to 7.6 €/kg by 2050. SOEs are the most to even small-scale end consumers directly, saving costs and time
expensive but are expected to have the sharpest decrease in costs transporting the H2 first to a large-scale reconversion centre
over the next 30 years (33%), going from 12.9 €/kg in 2020 to before distributing it to end consumers.
8.7 €/kg by 2050. The costs for Houston are about 1 €/kg less than
for Cologne for all scenarios because it is cheaper to produce H2 Use of Pipelines for Large Scale Transport
close to Houston than close to Cologne, meaning the transport While pipelines are impractical for smaller H2 consumers, for
costs for H2 required in Cologne are higher. The transport costs large industrial consumers the cheaper operating cost of pipelines
are the same irrespective of the type of electrolyser used, as the H2 at large H2 volumes could be worth the high investment cost.
produced by different electrolysers is the same. Pipelines could also be used to cheaply supply large areas or even
The cost comparison between centralised and decentralised small countries if the H2 is piped to a central point before being
reconversion is shown in Figure 12 for H2 required in Cologne, distributed from there to smaller end users. Two particular
Houston and Guangzhou. It should be noted that only the pipeline scenarios were investigated for either large consumers
cheapest total production and transport option is shown in or groups of consumers located in the areas of Cologne and
each case; if H2 is being produced and transported from Houston. When the use of large-volume (1,000 kt/y H2) pipelines
another location, the costs and their relative difference could is considered, the cheapest production location for H2 required in
change. For Cologne, where it is cheapest to get H2 shipped as a Cologne and its associated cost changes significantly. As well as
LOHC from Egypt when conversion is centralised, the transport direct pipelines between the production locations and the desired
(and therefore also total) cost is about 0.4 €/kg H2 higher when H2 usage location, pipelines were also considered between the
conversion is decentralised. When conversion is decentralised, it production location and the closest port, from where H2 could
is cheaper to produce the H2 close by to Cologne and transport it still be shipped to the usage location, as well as between the usage
directly in trucks as gaseous H2 than to obtain it from Egypt in the location and the closest port. Three production locations offer the
form of LOHCs. Likewise, Guangzhou achieves a cost reduction most cost-effective H2 to Cologne at similar prices: northern
of 0.95 €/kg H2 when conversion is centralised, a more significant Scotland, the south coast of Ireland, and southern France close to
cost reduction than in Cologne. When reconversion is Spain on the Mediterranean Sea, which all have strong wind
decentralised in Guangzhou, it is more economically viable to resources. As the potential production location in France is better
transport using NH3 as the medium, due to the lower situated in terms of closeness to other potential industry and
reconversion costs for decentralised conversion (see Figure 9). population centres and does not require an undersea pipeline, it
For Houston, no difference between centralised and decentralised will be investigated over the locations in Ireland and Scotland.
reconversion is apparent; this is because for Houston, the The lowest-cost location is a place called Parc Eolien de Port la

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Collis and Schomäcker Delivered Cost Hydrogen Global

FIGURE 13 | The total (delivered) cost per kg of producing and transporting H2 to Cologne, Germany, for large demand (1,000 kt/y) and allowing pipelines from
production sites to Cologne. Other parameters follow the baseline scenario (AE electrolyser in 2030, centralised reconversion). Black dots represent locations where
possible transport routes could not be found. Results are from a Monte Carlo simulation with 1,000 iterations.

Nouvelle, which is actually already home to a wind park. If H2 was enough H2 to supply the future needs of the EU, reducing
to be produced from the wind power generated in Parc Eolien de the energy reliance of the EU on foreign providers.
Port la Nouvelle, the estimated pipeline length required to If pipelines are considered for the scenario of H2 required in
transport H2 to Cologne would be about 1,120 km. Having Houston, the cheapest production location changes to (27, -104),
such a pipeline would significantly reduce the costs for H2 in a sunny location in north-central Mexico requiring a pipeline
Cologne to 7.6 €/kg, as compared to the cheapest obtainable H2 length of about 1,080 km, decreasing the minimum total cost to
without using pipelines, which is 9.4 €/kg for H2 shipped as a 7.6 €/kg H2 from a cost of 8.6 €/kg H2 if pipelines are not allowed.
LOHC from Egypt and re-converted at Cologne. The total In general, a variety of locations across Mexico and the southern
delivered cost per kg for H2 required in Cologne if pipelines US are strong candidates for production sites, as shown in
are considered is shown in Figure 13 for all studied locations. Figure 14. As with the Cologne scenario, it makes more sense
As well as the three locations mentioned, other low-cost for the US to produce H2 within the country to ensure a greater
production locations for H2 needed in Cologne include degree of energy self-sufficiency. A production site on the New
southeast Spain, Italy, and the north coasts of Morocco, Mexico/Texas border at (32, -105) could provide H2 to Houston
Algeria and Tunisia. Locations such as the Middle East, at only 0.04 €/kg H2 more than the aforementioned site in Mexico
northern Chile and the southwest US, which are cost- while ensuring control over the production facilities. Other low-
competitive if no pipelines are built, are no longer cost production locations that are competitive if no pipelines are
economically viable compared to more local options if H2 allowed, such as northern Chile, are considerably more costly
pipelines are constructed. If a pipeline was built from the than closer locations in the southwest US and Mexico if pipelines
production site near Sharm El-Sheikh, Egypt, that was are permitted. For these further away locations, shipping is still
determined to be the most optimal production site for H2 more cost-effective than a pipeline when large volumes are
required in Cologne if no pipelines are to be constructed, H2 considered, while for closer locations, a pipeline becomes a
required in Cologne would cost 8.4 €/kg, which is considerably much more economically viable option.
more than H2 produced in Parc Eolien de Port la Nouvelle and The most cost-effective transport medium for H2 required in
piped to Cologne. The pure production cost of H2 in Parc Eolien Cologne when pipelines are considered is shown in Figure 15. H2
de Port la Nouvelle is 7.2 €/kg H2, which is slightly higher than gas is now the cheapest medium for 42% of cases, as large-scale
the production cost of 7.0 €/kg H2 for Sharm El-Sheikh. pipelines allow for much cheaper transport without expensive
However, the transport cost using pipeline from Parc Eolien conversion and re-conversion to other mediums. However, the
de Port la Nouvelle is only around 0.4 €/kg H2, considerably cost of pipelines increases more quickly per kilometre than
lower than the pipeline cost of 1.4/kg H2 to transport H2 from shipping, and therefore shipping becomes more cost-effective
Sharm El-Sheikh to Cologne, and outweighing the slightly for this scenario at distances greater than 6–7,000 km. Beyond
cheaper production cost at Sharm El-Sheikh. Another that distance, LOHCs are a cheaper medium to use, being the
advantage of obtaining H2 from France as opposed to Egypt most cost-effective medium for 58% of all production locations.
is geopolitical stability; France is also in the EU and a close ally LOHCs are favoured over NH3 in this scenario because as the
of Germany, making it a more secure energy source. It could be produced amount is so large, pipelines are also considered from
possible that areas in the EU with high renewable energy the production location to the closest port, and from the port
resources, such as France, Ireland, or Spain could produce closest to Cologne to the final usage location. LOHC pipelines are

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Collis and Schomäcker Delivered Cost Hydrogen Global

FIGURE 14 | The total (delivered) cost per kg of producing and transporting H2 to Houston, United States, for large demand (1,000 kt/y) and allowing pipelines from
production sites to Houston. Other parameters follow the baseline scenario (AE electrolyser in 2030, centralised reconversion). Black dots represent locations where
possible transport routes could not be found. Results are from a Monte Carlo simulation with 1,000 iterations.

FIGURE 15 | The most cost-effective transport medium for H2 required in Cologne, Germany, for large demand (1,000 kt/y) and allowing pipelines, from each of the
5970 selected global locations. Results are from a Monte Carlo simulation with 1,000 iterations.

cheaper than NH3 pipelines, and so they are favoured for every or southerly latitudes, many coastal locations, or locations that
production location where shipping is still cheaper than a have strong winds due to unique geographical circumstances,
pipeline. such as northern and western Europe (particularly the British
Isles), the plains of central North America, and the Kazakh and
Russian steppe. The average cost of wind power across all
DISCUSSION locations studied was 432 €/MWh, significantly higher than
the 55 €/MWh for solar power, but also with much greater
Production Cost Analysis variance (standard deviation of 672 €/MWh for wind
As expected, there is a strong correlation between locations with compared to 10 €/MWh for solar). The high mean of wind
good wind or solar resources and low H2 production costs, as power is a result of many locations with very little wind in
production cost variables other than electricity price remain central and western Africa, South America and south-east
constant between locations. In 85.7% of the studied locations, Asia. In these locations, solar power is much more
it is cheaper to generate electricity from solar power than from economically viable than wind power. The costs of generating
wind power; however, there are still many locations where wind both solar and wind power are shown for all locations in the
power is the cheaper option, for example locations at far northerly Supplementary Figures S1, S2. In general, it is promising that a

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Collis and Schomäcker Delivered Cost Hydrogen Global

TABLE 4 | Comparison of the H2 production cost in 2050 from various studies.

Study H2 production Comments

cost
in 2050 (€/kg)

IEA International Energy Agency. (2019) 2.0—3.4 Unclear for what demand, electricity and electrolyser costs optimistic, neglects extra systems costs
Bloomberg Bloomberg New Energy Finance. 0.95 Neglects extra system costs, unsure what assumptions have been made, system boundaries not
(2020) stated
IRENA Gielen et al. (2019) 1.3 Neglects extra system costs, unsure what assumptions have been made, system boundaries not
stated
Christensen Christensen. (2020) 5.5—10.0 Accounts for compression, piping and installation, wide variety of scenarios, large electrolyser CapEx
distribution
Glenk et al. Glenk and Reichelstein. (2019) 2.5 Thorough electrolyser CapEx and electricity estimation, neglects extra systems costs
Hydrogen Council Hydrogen Council. (2020) 1.8—3.5 Neglects extra system costs, unsure what assumptions have been made, system boundaries not
stated
This study 6.5—8.3 Accounts for compression, piping and installation, large electrolyser CapEx distribution

variety of regions have the potential to produce cheap renewable and most importantly, what is included in their calculations for
H2, as many countries could benefit that do not currently profit “production cost”. Christensen (Christensen, 2020) was “able to
from an abundance of industry or resources. reproduce the IEA data... but only if we neglected all system costs
The location-based trends in production cost over the world beyond the electricity and electrolyser CAPEX costs”. The
calculated in this study (shown in Figure 5) correlate strongly Bloomberg (Bloomberg New Energy Finance, 2020) and
with the IEA (International Energy Agency, 2019) map of IRENA (Gielen et al., 2019) studies also seem to neglect these
production costs of renewable H2 worldwide, which also extra systems costs. In this study, the H2 production cost is
shows northern Chile, south-west Africa, south-west calculated including the required compression, storage, OpEx
United States and Mexico, the Middle East and Australia and other maintenance, piping, and dispense costs required to
having the lowest H2 production cost. As the IEA did not ensure the H2 is ready to be transported to its required
exclude locations based on physical or human features, they destination, which explains the discrepancy between the
also show Tibet as the cheapest region to produce renewable production costs of the aforementioned agencies and those
H2; however, this (and many of the other locations shown on their presented here. The costs calculated in this study are at this
map) are unrealistic due to altitude, tough terrain, distance from stage not cost-competitive with the benchmark of H2 produced by
industrial and urban centres, and a variety of other man-made SMR (2.2 €/kg H2). (Gielen et al., 2019) However, with a
and natural features. The Hydrogen Council (Hydrogen Council, combination of CO2 taxes and technological development, it is
2021) also notes similar areas as having the best solar/wind possible that renewable H2 could be cost-competitive in the
resources for renewable H2 production. While the overarching future.
trends between this study and the IEA report look very similar, it
should be noted the costs reported by the IEA, as well as several Transport Cost Analysis
other agencies, are markedly lower than those calculated here. For Although the transport costs are almost always lower than the
example, the IEA reports a H2 production cost of 2.0—3.4 €/kg production cost, they still make up a significant portion of the
H2 in the EU ‘in the future’ (assumed to be 2050 for the purposes total cost. For production locations, the distance from the nearest
of comparison). Bloomberg (Bloomberg New Energy Finance, port is important—coastal regions usually have lower transport
2020) has an even more aggressive estimation of a delivered cost costs, whereas far inland regions such as Mongolia have very high
of 2.0 USD/kg H2 in western Europe by 2030 and 1.0 USD/kg H2 transport costs. If the production location is close enough to the
by 2050, while IRENA (International Renewable Energy Agency, usage location to truck the H2 in gaseous form, the huge cost of
2020) assumes costs of 2.5—3.5 USD/kg H2 in 2030 to 1.4 conversion and re-conversion is saved. Interesting to note is that a
USD/kg H2 by 2050. For comparison, this study finds large increase in shipping distance results in only a slight increase
production costs of 7.5—9.7 €/kg H2 in western Europe in to the transport cost; for example, transport to Cologne from a
2030, and 6.5—8.3 €/kg H2 in 2050, with the cheapest coastal location in southern France has a transport cost of around
production costs worldwide being 6.0 €/kg H2 in 2050, which 2.7 €/kg H2, but transport from Brazil costs only 2.9—3.0 €/kg H2.
is similar to those reported by Christensen (Christensen, 2020) The bulk of these costs is the conversion and re-conversion into
(7.5—16.0 USD/kg H2 in the EU in 2020 and 5.8—10.5 USD/kg either NH3 or a LOHC, which is expensive but drastically reduces
H2 in 2050). In order to benchmark the results of this study the cost of shipping. This is expected; ships are the most cost-
against others, an overview of the H2 production costs from effective transport method for transporting goods long distances,
various studies is shown in Table 4, along with short notes about especially when large volumes of cargo are transported, and are
the factors considered in each study. currently used to transport oil, natural gas, minerals, and many
The IEA’s calculations for the levelized cost of hydrogen other goods (International Transport Forum, 2019). A bigger
(LCOH) are unclear as to what year the costs are calculated contributor to cost is the distance from the coast—it can be seen
for, what capacity the hybrid solar-wind power system achieves from Figure 6 that across the world the transport costs increase as

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Collis and Schomäcker Delivered Cost Hydrogen Global

TABLE 5 | Comparison of H2 transport costs of a variety of mediums and modes from similar studies.

Study Route/medium calculated Cost (€/kg H2) Our cost (€/kg H2)

IEA International Energy Agency. (2019) Shipping LOHC—7,000 km 2.2 2.6—2.9

IEA International Energy Agency. (2019) Shipping NH3 - 7,000 km 1.9 3.2—4.2
IEA International Energy Agency. (2019) Shipping LH2—7,000 km 3.4 5.5
Hydrogen Council Hydrogen Council. (2021) Shipping NH3—8,200 km 2.0—2.9 3.2—4.2
Hydrogen Council Hydrogen Council. (2021) Shipping LH2—8,000 km 1.9—2.4 5.5
Hydrogen Council Hydrogen Council. (2021) Trucking H2 gas - 300 km 2.3 1.2
Hydrogen Council Hydrogen Council. (2021) Pipeline H2 gas—2,800 km 0.5 1.4
Hydrogen Council Hydrogen Council. (2021) Shipping LOHC—7,000 km 1.6—2.7 2.6—2.9

the production locations go further inland. It can then be inferred most cost-effective transport medium if energy efficiency can be
that trucking from the production location to the port, either for preserved along the transport route. For comparison, Bøe et al.
gaseous H2 or any transport medium, is a large cost contributor. (Bøe et al., 2021) find average total supply chain efficiencies of
Therefore, having production locations on the coast, and in 20—30% for LH2, 15—27% for NH3, and 15—25% for a sample
particular close to ports, would heavily reduce transport costs LOHC. These efficiencies suggest pipelines of gaseous H2 could be
to far-away locations that require H2. the most energy-efficient transport method when the production
Other studies, such as those done by the IEA (International site is close enough, and demand high enough, to justify the high
Energy Agency, 2019) and the Hydrogen Council, (Hydrogen CapEx of the pipeline.
Council, 2021) estimate the transport cost for a few particular It should also be mentioned that although this study focuses
scenarios. The Hydrogen Council calculates the transport costs only on the economic cost of storage and transportation, there are
for three similarly distanced shipping routes (7000–8500 km); many physical and technological factors to be considered, such as
one using NH3 as a medium, one using LH2, and the last being H2 density of the carrier, leakage, and corrosivity. For example,
converted to a LOHC, with the resulting transport costs ranging NH3 has a relatively high H2 density (17.7 wt%) and has a low
from 1.8—2.7 €/kg H2. The IEA calculates a transport cost of leakage rate, making it an attractive transport and storage
1.8—3.6 €/kg H2 from Australia to Japan. While there are some medium from a technological perspective. (Wijayanta et al.,
differences, the costs are comparable to the transport costs 2019) While it is corrosive and toxic, it can be stored in low-
calculated in this study for similar routes, as highlighted in cost tanks currently used for LPG, and transport and storage of
Table 5, and show much more similarity than the production NH3 is already widespread. Therefore, it is the most
costs from the same studies. The largest discrepancy is for LH2 technologically ready transport medium.
and gaseous H2 transport; this is probably due to differing LOHCs have a lower H2 density (6.16 wt% for toluene),
assumptions on how fast transport technology for LH2 will requiring notably larger tank sizes to transport the same
progress. As it is still in a relatively early stage of amount of H2. (Wijayanta et al., 2019) As this is
development, the transport costs for LH2 and gaseous H2 are stoichiometrically set, this places inherent space and weight
quite uncertain, and it is therefore natural to have greater limitations on the transport and storage of H2 using LOHCs.
discrepancies than for LOHCs and NH3. The transport costs LH2, while naturally being very pure, requires immense energy
calculated in this study for NH3 and LOHCs are slightly higher for cooling (-250°C) and has relatively high boil off (0.2—0.3%/d),
than those from the IEA and Hydrogen Council, but they are while is problematic for long-term storage and long-haul
generally more similar than the H2 transport costs and within the transportation. (Wijayanta et al., 2019) While NH3 and
realms of normal uncertainty. LOHCs can already be shipped, the first LH2 ship has only
While the most cost-effective transport mediums for each just been launched in 2022, and gaseous H2 pipelines still
production location (Figure 7) currently heavily favour LOHCs require further research and development. (Carbon capture
and NH3 due to the ease of transportation and storage, this could needed for expansion, 2020) Hence, LOHCs and especially
change in the future due to differences in energy conversion NH3 might be more beneficial transport mediums in the near
efficiency between the different mediums. Comparing the energy future. LOHCs and NH3 could also use existing pipeline
efficiency between different mediums is complex, as not only infrastructure, whereas new or heavily retrofitted pipelines
must the energy losses of conversion and re-conversion be would have to be installed to accommodate H2. (International
considered but also the energy losses during storage and Energy Agency, 2019)
transportation, which differ for every medium. Such
calculations would be different for every production location Parameter Analysis
and could be the subject of a complete study on its own. However, In general, CapEx costs for electrolysers are predicted to decrease
as the energy losses for H2 gas (5–15% for compression (Energy significantly in the next few decades, primarily due to advances in
Transition Institute, 2014)) are lower than for LH2 (9–22% round technology and efficiency as the number of electrolysers
trip efficiency (Baker and Shaner, 1978)), NH3 (11—19% round constructed increases dramatically, but also due to the
trip efficiency (Giddey et al., 2017)), and LOHCs (26—43% round increasing capacity of electrolyser systems, which can take
trip efficiency (Modisha et al., 2019)), it could end up being the advantage of economy of scale effects. The difference in cost

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Collis and Schomäcker Delivered Cost Hydrogen Global

reductions over the next 30 years is likely due to the differing electricity generation system. Nevertheless, building a hybrid
levels of industrial development of the three electrolyser types; AE wind-solar system would likely result in a slightly higher cost of
electrolysers, as the most commonly used industrially in the electricity than a single system due to capital investment “economy
present day, have already undergone the most development of scale” effects. (Gim and Yoon, 2012) Additionally, offshore wind
and there are therefore less cost reduction breakthroughs to be could be the most cost-effective electricity generation source for
made in the future. PEM electrolysers are expected to have a some H2 usage locations, such as countries like the UK or Denmark.
greater cut in cost as their market share increases and natural Labour and infrastructure costs could vary in different countries.
development continues, and even more so for SOEs, which are Additionally, there could be instances of the closest port to a production
currently the least industrially proven option. Especially in the site being in another country. In many scenarios, this may not make a
short term, over the next decade, SOEs are expected to have a difference, but it could in some scenarios where the neighbouring
drastic reduction in costs due to further industrial development. country does not allow the production site use of the port.
PEM electrolysers are believed to offer the cheapest H2 from There are likely some cases where NH3 or LOHCs are desired
around 2023 onwards due to their high scalability and efficiency, as the final product instead of H2. In this case, the high re-
as well as the fact that it is possible to obtain already compressed conversion costs can be avoided, which would lower the cost. As
H2 out of the process, heavily reducing the H2 compression costs the market share of NH3, in particular, is comparatively large, a
that are required for storage or transport. relatively high amount of renewable H2 could be used to produce
NH3 (Fortune Business Insights, 2020) Although the cost is
Pipeline Analysis greater than conventional NH3, it could become competitive
As H2 can be piped in gaseous form without the need for as CO2 prices increase. (ChemAnalyst. Ammonia Price, 2020)
conversion into a different medium or liquefaction, this can Grid-connected electrolysis systems could likely reduce the H2
drastically reduce transport costs, especially for larger H2 production cost and increase the capacity factor, as electricity can be
demands. Capital investment per unit of product generally sold to the grid when there is an oversupply of renewable power and
decreases as the amount of product increases due to drawn from the grid when not enough is produced. (Christensen,
economies of scale effects. (Gim and Yoon, 2012) As pipelines 2020) It should be noted, however, that grid power in most countries
have by far the most capital investment required of the transport is not yet fully renewable, which would increase GHG emissions of
methods studied, the scaling effect has a more pronounced cost H2 production. As grids become more and more renewable,
reduction for pipelines compared to trucks and ships, of which however, most electrolysers will likely be grid-connected to
the bulk of the costs come from operational expenditures and do maximize their capacity factor. In general, estimating the capacity
not decrease much as the amount transported increases. factor for different locations is difficult. In this study, a constant value
It is still cheaper to ship H2 in the form of a chemical medium was assumed, which would likely vary in reality for different
long distances than to pipe it in gaseous form, despite the conversion locations, as well as being dependent on whether solar or wind
and re-conversion costs. However, it is much cheaper to pipe H2 power is used. Other ways to increase the electrolyser capacity factor
short distances than ship H2, meaning the inclusion of pipelines include oversizing the renewable electricity generator, adding
favours more locally based H2 production sites, at least for large-scale batteries as an energy storage, and hybrid PV-wind systems.
H2 demand. Using pipelines would be particularly attractive for (Christensen, 2020) However, these have associated extra costs
countries or regions with strong renewable resources looking to be and research is required to determine their economic plausibility.
energy independent, provided they have a large enough demand for The parameters of the cost calculations with the biggest impact
H2 to justify the high capital investment of pipelines. on the final cost are the CapEx of the electrolyser and the electricity
A weakness of the pipeline calculations is the assumption that price. The solar and wind data have very low uncertainty as they
the pipeline distance is 20% greater than the straight-line distance were obtained from reputable public sources and were cross-checked
between the locations. In reality, this number might often be quite against other databases to ensure an acceptable degree of similarity.
different; in some scenarios, it might be possible to build a The low, medium and high electrolyser CapEx were taken from
pipeline directly from the production location to the usage Christensen’s (Christensen, 2020) analysis of the study conducted by
location, and in other situations, the pipeline could have to Glenk et al., (Glenk and Reichelstein, 2019) who thoroughly
circumvent a variety of obstacles such as other properties or investigated a large range of original data sources of electrolyser
rough terrain. However, as assessing optimal pipeline routes is a investment costs. While the sample size of electrolyser costs taken is
complex task for just a single pipeline, it is impractical to assume large (n = 52 for AE electrolysers), the standard deviation is also
different values for different routes in this study. comparably high (±345 €/kW or ±29% for AE electrolysers), which
infers the data is quite uncertain. As H2 electrolysis is a technology
Data, Uncertainty and Model Analysis still undergoing development at larger industrial scales, cost data is
There are some limitations imposed by the scope of the model. For likely to both become more certain and decrease in the next few
some unique locations that have both good wind and solar resources, decades. As the uncertainty of each electrolysis CapEx obtained from
such as south-west Europe and northern Africa, the Middle East, literature is high, taking the mean of all obtained values from
Western Australia, and northern Chile, hybrid systems could reputable studies is the most certain option available at the
potentially allow for an increase in the capacity factor of the moment. The uncertainty of transport cost data is difficult to
electrolyser, as there would be a greater fraction of time that ascertain due to the various ways it is reported in different
electricity could be generated compared to a single renewable studies; many papers only report the cost for a particular case

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Collis and Schomäcker Delivered Cost Hydrogen Global

study. Transport costs were taken from the IEA report (International while H2 gas pipelines are a more cost-effective option for short to
Energy Agency, 2019) and were verified against other reports and medium distances, particularly if there is a large demand. (Hydrogen
data to ensure costs were similar. Costs for transportation of NH3 Council, 2020) In the short term, NH3 and LOHCs are likely to be
and LOHCs were more similar than for LH2 and gaseous H2, largely more attractive transport mediums, as they can be transported by
because transportation of H2 is much less developed and therefore currently existing infrastructure. LH2 ships and H2 pipelines require
cost data are by nature more uncertain. Overall, the delivered costs time to be built, as well as further technological development.
reported in the study have a moderate uncertainty, largely due to the However, in the future, they may become more attractive due to
aforementioned uncertainty regarding future electrolysis and H2 high conversion efficiencies. H2 production costs are expected to
transport costs. decrease over the next few decades by up to 1.8 €/kg, largely due to
The production locations were selected at intervals of one-degree decreasing electrolyser CapEx and renewable energy costs,
latitude and longitude, resulting in 5970 locations once the masked particularly for PEM and SOEs.
areas were excluded. Selecting points with smaller intervals, for Needed further studies include investigating the effect of rising
example every 0.5°, would increase the resolution of the study and CO2 prices on the economic feasibility of renewable H2
potentially find some slightly more advantageous locations, but at (Gerbelová, 2014) and evaluating the full-trip energy efficiency
the expense of a vastly increased computation time. For example, of different transport mediums to determine the potential for cost
decreasing the intervals to 0.5° would increase the number of reduction. (Cerniauskas et al., 2019) As well, examining particular
production locations and therefore also the computation time by case studies in more depth, such as considering hybrid PV-wind
a factor of four, which is unfeasible in this study for the relatively systems, offshore wind generation, and scenarios where NH3 and
small preciseness gain that would result. LOHCs are desired as an end product would be a logical next step.
1,000 iterations were completed for each scenario in the Monte Carlo
simulation. Although more iterations would have slightly improved the
accuracy of the predictions, it would drastically increase the DATA AVAILABILITY STATEMENT
computation time and render it unfeasible within the limitations of
the study. For example, increasing the number of iterations from 1,000 The original contributions presented in the study are included in
to 10,000 would likely only increase the accuracy of the simulation by the article/Supplementary Material, further inquiries can be
about 0.5%, but would take 10 times longer to compute. (Oberle, 2015) directed to the corresponding author. The model used in this
study can be found at the following link: https://github.com/
jooooohannes/h2-mapping.
CONCLUSION
Replacing fossil fuels or fossil-fuel-based H2 with renewable H2 is a AUTHOR CONTRIBUTIONS
promising solution to reduce GHG emissions in industries such as
steel and chemicals. For stakeholders wishing to use renewable H2, JC performed literature research, envisaged and developed the
the cost, as well as the production location and transport route, are model, and was the main author of all text. RS provided guidance
essential information for process development. A model was created and structure to the manuscript.
to determine the minimum delivered cost of renewable H2 to any
location worldwide, as well as the associated cheapest production
location, transport route and transport medium. FUNDING
Locations with high population and heavy industry, such as
Cologne, Germany, and Houston, United States, were selected as This research was carried out within the project BAC-2-FUEL,
case studies. Total delivered H2 costs range from 9.4—11.0 €/kg in which received funding from the European Union’s Horizon
Cologne and 8.6—10.2 €/kg in Houston, with the most promising 2020 research and innovation program under grant agreement
production locations being the Middle East for Cologne and either no. 825999. The European Commission is neither responsible nor
the southwest United States or northern Chile for Houston. South- liable for the content of this document.
west Africa and north-west Australia also have low H2 production
costs, and along with the aforementioned production locations are
the best suited to offer relatively low-cost H2 worldwide. For small ACKNOWLEDGMENTS
demands, when pipelines are not economically feasible, LOHCs are
the most commonly preferred transport medium, except for The authors would also like to thank Till Strunge for proof-
production locations close (<1,000 km) to the usage location, for reading the manuscript.
which trucking gaseous H2 is more economically feasible. For larger
demands such as industrial areas, large pipelines transporting H2 gas
similar to those used for natural gas today can be considered, which SUPPLEMENTARY MATERIAL
could reduce the cost significantly to 7.6 €/kg H2 for both Cologne
and Houston, as well as favouring closer production locations in The Supplementary Material for this article can be found online at:
southern France and Texas, respectively. In general, NH3 and https://www.frontiersin.org/articles/10.3389/fenrg.2022.909298/
LOHCs are the preferred transport medium for longer distances, full#supplementary-material

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Collis and Schomäcker Delivered Cost Hydrogen Global

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Collis and Schomäcker Delivered Cost Hydrogen Global

NOMENCLATURE LCOH Levelized cost of hydrogen

LH2 Liquid hydrogen
Abbreviations
LOHC Liquid organic hydrogen carriers
AE Alkaline
OpEx Operational expenditures
CapEx Capital expenditures
PEM Proton-exchange membrane
CCS Carbon capture and storage
PV Photovoltaic
GHG Greenhouse gas
SMR Steam methane reforming
GPS Global positioning system
SOE Solid oxide electrolysis
LCOE Levelized cost of electricity

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