Turning Points for Green Hydrogen in Energy Storage: Insights from Techno-Economic Analysis and Transition Theory

Abstract

Solar and wind energy offer the opportunity to decarbonise energy generation. How- ever, these energy sources are intermittent, leading to a mismatch between energy availability and demand and creating the need for energy storage. Green hydrogen could be the solution to this imperative; however, it is presently only available in small quantities and is expensive relative to conventional energy technologies based on coal and gas. The difference in cost raises the important question of what needs to be im- plemented or developed so that green hydrogen can become a viable technological solution for accommodating renewable energy intermittency. This research considered the question using a sequential mixed methods approach. In the first quantitative phase, standard techno-economic analysis was used to calcu- late the levelised cost of storage (LCOS) and the necessary turning points at which green hydrogen could be widely deployed as a storage solution. The LCOS is esti- mated to be $0.228/kWh which is still fairly higher than the literature value of $0.13/kWh for lithium-ion (Li-ion) batteries and $0.11/kWh for pumped hydro storage. Lazard's 2024 analysis gives the LCOS for green hydrogen to be around the range $0.20 to $0.40 per kWh. In the second qualitative phase, the results of this analysis were calibrated against the perspectives of industry personnel with at least 5 years’ experience in the sector. The respondents noted the high differential between the LCOS for green hydrogen and alternative energy storage technologies such as Li-ion batteries. Their view was that significant intervention would be required at least initially with support mostly from the government in cost reduction and attract investors. Approaches such as support for the establishment of energy infrastructure, tax incentives and penalties for carbon emissions were mentioned