By Jacques Moss, Senior Research Analyst – Energy, Sustainability & Infrastructure, Guidehouse Insights
Overview of efficiency considerations for electrolysis
It is useful to think about efficiency losses in three separate but interrelated categories. The first category covers inefficiencies that arise within electrolyser stacks irrespective of the operational profile of the electrolyser. Stacks are the core components of a green hydrogen plant where the electrochemical reactions occur. Inefficiencies in the stack are caused by a range of factors including electrical resistance in the cell components, bubble formation around the electrodes, and heat dissipation. These losses increase over the lifetime of the stack due to the activity of various degradation mechanisms.
Power consumption values supplied by manufacturers often provide insight only into this first category. They are typically expressed as a kWh value of electricity input per unit of hydrogen produced, referring to the power consumption of the stack at the beginning of life (BoL) under optimal load conditions. To obtain the stack efficiency, this figure is often converted into a percentage value relative to the energy content of the hydrogen – either the lower heating value (LHV) or the higher heating value (HHV).
The second category covers inefficiencies caused by an electrolyser’s operational profile. The efficiency of the power-to-hydrogen process varies across an electrolyser’s operational load range, generally peaking at under half of the rated capacity
In practice, electrolysers supplied by renewable energy sources will also undergo extended periods of low electricity supply during which the system needs to be placed on standby. In standby mode, the system must continue consuming electricity to maintain internal temperatures and pressures, allowing for rapid start-up. Alternatively, an electrolyser can be shut down entirely, which increases both the time and the energy inputs required for start-up.
The actual efficiency of an electrolyser over its lifetime therefore depends on its typical load profile when operating, as well as the frequency and severity of standby and shutdown events. A more unpredictable operational profile will also accelerate the rate of cell degradation and consequently impact either the lifetime efficiency of the project or the expenditure required for stack replacements.
Into the third category can be placed inefficiencies from the surrounding balance of plant (BoP), such as power electronics, water purification systems, gas processing technologies, and compressors. The extent of these inefficiencies depends partly on the system boundaries – the collection of sub-systems and equipment that are treated as comprising the plant. The system boundaries are in turn influenced by the design of the project, the electrolyser technology, and the intended end use.
One of the largest sources of losses within the BoP is typically the power electronics, which consist of a transformer and a rectifier to convert incoming alternating current electricity into direct current electricity suitable for the stacks. Best-in-class commercially available rectifiers currently deliver conversion efficiencies of around 96%.
Compression requirements are also an important variable. Electrolyser technologies that operate at pressures of around 30 bar – such as PEM and high-pressure alkaline – have minimal compression requirements for direct feed of hydrogen into most industrial processes, but still require compressors for on-site storage, tube trailer distribution, or grid injection. Conventional alkaline electrolysers that operate at atmospheric pressures have correspondingly higher compression requirements across the full range of end uses and distribution methods. Energy requirements for compression tend to increase at smaller system scales.
As a rule of thumb, BoP can be assumed to account for around 10% of green hydrogen plant’s total electricity consumption, although in practice this will vary considerably between projects and technologies.
Stack efficiency improvements
Recent years have seen incremental increases in the stack efficiencies of the two dominant forms of commercial low-temperature electrolyser technology – alkaline and PEM. These increases have been achieved by targeting sources of losses within the stack, including through the use of more electrochemically active catalyst materials and via alterations to the underlying cell architecture intended to minimise electrical resistance.
It is worth noting that since catalyst materials contribute significantly to the overall cost of electrolyser stacks, efficiency benefits from material substitution can also be counterbalanced by increases to project CAPEX. Innovations in this area have therefore focused as much on reducing material costs for electrolyser systems as they have on boosting cell performance. The impact of material changes on other parameters that influence the LCOH, such as cell degradation, also needs to be evaluated prior to adoption.
Beyond the commercially advanced technologies, there has been growing interest in high-temperature electrolysers, principally solid oxide electrolysis (SOE). Since the electrochemical reactions within an SOE cell are assisted by the technology’s high operating temperature, projects can make use of waste heat from co-located high-temperature processes to offset some of the electricity input requirements. SOE electrolysers supplied with an external heat source can achieve significant improvements in electrical efficiency at the stack level – approaching 85% relative to the LHV at BoL, which compares to maximum current values of slightly over 70% for PEM and alkaline electrolysers.
Despite these efficiency benefits, further progress in key performance areas is likely to be required to make SOE a commercially attractive proposition for most project developers. Current disadvantages include high capital costs at the stack level, short lifespans due to thermally induced cell degradation, and lack of responsiveness to variable loads.
There are also some early-stage technologies that promise still greater efficiencies. Australian start-up Hysata and Israeli start-up H2Pro both claim stack efficiencies in excess of 95% (relative to the HHV) with radically different approaches to cell design.
Hysata’s technology aims to achieve this via the use of capillaries for water transport within the cell, which prevents bubble formation and inefficiencies from fluid and gas flow interactions. H2Pro’s technology separates the hydrogen and oxygen evolution reactions that usually take place within a single cell into distinct electrochemical and thermally activated chemical steps. Both companies also claim simplified BoP requirements. However, it is not yet known whether these advantages will translate into robust and scalable commercial offerings.
Realising efficiency improvements at the system level
The years leading up to 2030 will be a crucial period for scaling up electrolyser capacity. Although new technologies promise substantial efficiency improvements, most projects delivered during this period will use PEM and alkaline stacks with performance characteristics identical or similar to those of currently available systems. Nonetheless, important gains can still be made to achievable system efficiencies by focusing on an electrolyser’s operational profile and its BoP.
Measures taken to reduce the frequency of standby and shutdown events will also increase an electrolyser’s capacity factor. This is potentially a more important motivation than minimising operational losses since it significantly decreases the capital investment needed for an electrolyser to deliver a set level of hydrogen output. Nonetheless, load smoothing helps to maintain optimal conversion efficiencies as well as limiting stack degradation rates, especially for alkaline electrolysers with limited dynamic capabilities.
Various electricity sourcing options have different implications for plant capacity factors and load smoothing. For projects that are directly connected to renewable energy resources, oversizing of renewable energy assets or combining solar and wind resources are relevant options.
For projects that receive renewable electricity through a grid-sleeved power purchase agreement (PPA) rather than a directly connected renewable energy asset, time-matching rules may provide some scope for load smoothing. Under the current EU rules, projects completed before 2030 that receive electricity through a grid-sleeved PPA will only need to demonstrate equivalence in operational hours over a one-month period.
Another approach available to developers is to integrate a battery energy storage system into a project. Given the high cost of additional battery storage capacity, doing so effectively requires a nuanced understanding of the value that the storage system brings to a particular plant under specific operational conditions.
A final option is coupling multiple electrolyser technologies – for instance, using alkaline to serve a certain less variable portion of the load and PEM to handle more rapid load variations. However, coupling technologies introduces additional complexity to project delivery and may also annul some of the efficiency benefits of using a single technology with a unified BoP architecture.
On the BoP side, trade-offs between the performance of the stack and the surrounding sub-systems are key considerations, both from an efficiency perspective and from a plant cost perspective. Finding an EPC partner with an intimate understanding of the chosen technology, close manufacturer ties, and experience in delivering projects with similar requirements should therefore be a priority for project developers.
Likewise, efficiencies and plant costs should both factor into a developer’s decision on whether to source pre-fabricated electrolyser modules (which include the stack in addition to some integrated BoP) or stacks supplied as individual components. The former approach allows for high stack and BoP performance optimisation at the scale of a single module but arguably provides less scope for optimisation at increasing system scales.
In summary, achieving competitive green hydrogen costs requires a holistic understanding of electrolyser efficiencies. which encompasses the stack, the operational profile of the electrolyser, and the contribution of the surrounding BoP. This perspective also needs to account for potential compromises between efficiency and other key parameters, especially plant costs.
New technologies may in future offer a pathway to radically improved system performance. In the meantime, detailed project planning and close collaboration between project partners will be the main factors that determine whether developers can successfully bring down the cost of green hydrogen production.
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