Assessing the Cost-effective Deployment and Operation of Water Electrolyzers in Global Net-zero CO2 Energy Systems

This study investigates the cost-optimal capacity and operation of water electrolyzers in global net-zero CO2 energy systems. The production costs of hydrogen are largely determined by the electrolyzer capacity factor (i.e., full-load hours); therefore, a global energy system model with an hourly temporal resolution was employed to consider the intermittency of variable renewable energy (VRE) and the dynamics of power system operations. Proton exchange membrane electrolysis is assumed in this study. The optimization results suggest three main findings. First, water electrolysis is estimated to be a cost-effective option for achieving net-zero CO2 emissions. Under default technology assumptions, the global installed capacity is projected to reach 2719 GW by 2050, with the majority of hydrogen consumed in the industry sector. Scaling up the supply chain is essential to realize this pathway. Second, hydrogen and hydrogen-based fuels are economically competitive with negative emission technologies (NETs). A modest deployment of CO2 storage and NETs provides favorable conditions for water electrolysis deployment—and vice versa. Third, flexible operation is critical to the widespread deployment of water electrolysis. In the default case, the global weighted average capacity factor of electrolyzers is estimated at 37 % in 2050 to follow VRE output fluctuations. The results also indicate that limited operational flexibility may significantly hinder the cost-competitiveness of electrolyzer deployment.