Design Space for PEM Electrolysis for Cost-Effective H₂ Production Using Grid Electricity

Proton Exchange Membrane (PEM) electrolysis is a promising pathway for producing low-carbon hydrogen via electrolysis coupled to variable renewable energy (VRE). This study introduces a physics-based PEM electrolyzer model into an integrated design and scheduling optimization routine, allowing for a comprehensive evaluation of the impact of reactor level metrics (e.g., cathode pressure and current density) on the levelized cost of hydrogen (LCOH) across various cost, technology, and electricity supply scenarios. Benefits of the static versus dynamic operation of PEM systems are outlined explicitly. The economic viability of a grid-based PEM electrolyzer producing 50,000 kg of hydrogen per day is assessed for both 2021 and 2035 technology and grid scenarios. Results show that dynamic operation reduces the LCOH by 8% under the 2021 scenario (4.98–4.57 $/kg-H₂ at maximum current density 2 A/cm²). Under 2035 price, cost, and technology assumptions (maximum current density 4 A/cm²), the LCOH ranges between 2.18 and 3.93 $/kg-H₂ under static operation, and between 1.42 and 2.84 $/kg-H₂ under dynamic operation, resulting in LCOH reductions of 20–50% depending on the electricity price profile. In addition, partial differential pressure mode with a cathode pressure of 5 bar was found to be the most cost-effective way to compress hydrogen to 30 bar in the 2021 scenario, while full differential pressure mode is preferred in the 2035 scenario. Finally, the study revealed that grid-based hydrogen production in 2021 does not meet the carbon intensity (CI) criteria for clean hydrogen in recent U.S. legislation, highlighting the need for additional measures to be considered for grid-connected electrolysis to qualify as “clean” hydrogen. These results suggest that capital cost reduction alone will not achieve low-cost electricity-based hydrogen production, emphasizing the need for further reductions in the cost of low-CI electricity to attain affordable and lower-carbon hydrogen production.