Modeling Global Levelized Cost of Hydrogen Production Considering Country-Specific Investment Risks

Abstract

Hydrogen is central to the global energy transition when produced at low emissions. This paper introduces a renewable hydrogen production system model (HPSM) that optimizes a hybrid hydrogen production system (HPS) on a worldwide 50x50 km grid, considering country-specific interest rates. Besides the renewable energy's impact on the HPS design, we analyze the effect of country-specific interest rates on the levelized cost of hydrogen (LCOH) production. LCOH production ranges between 2.7 Euro/kg and 28.4 Euro/kg, with an average of 9.1 Euro/kg. Over one third (40.0%) of all cells have an installed PV capacity share between 50% and 70%, and 76.4% have a hybrid configuration. Hybrid HPSs can significantly reduce the LCOH production compared to non-hybrid designs, whereas country-specific interest rates lead to significant increases in the LCOH production. Hydrogen storage is deployed rather than battery storage to balance production and demand.