Dr. Joungho Park and his research team from the Energy AI and Computational Science Laboratory at the Korea Institute of Energy Research (KIER) have conducted an economic analysis of water electrolysis, a key technology for future eco-friendly hydrogen production, and presented optimal operation strategies to maximize efficiency and reduce costs.
Green hydrogen, considered a key eco-friendly fuel of the future, is primarily produced using two technologies: alkaline water electrolysis and proton exchange membrane (PEM) water electrolysis. Among these, alkaline water electrolysis is the most widely commercialized technology, as it enables the low-cost, large-scale production of hydrogen. However, it requires a high and stable power supply to operate, making it difficult to effectively couple with renewable energy sources, which often generate electricity intermittently
* Green hydrogen refers to ultra-clean hydrogen produced by splitting water using eco-friendly electricity generated from renewable energy sources such as solar power. According to Korea's 11th Basic Plan for Electricity Supply and Demand (announced on February 21, 2025), clean hydrogen—along with ammonia-based power generation—is expected to account for 6.2% of the nation's total power generation by 2038, up from virtually zero in 2023. * Alkaline Water Electrolysis: A technology that uses an alkaline liquid electrolyte, such as potassium hydroxide, to split water into hydrogen and oxygen. * Proton Exchange Membrane (PEM) Water Electrolysis: A technology that splits water into hydrogen and oxygen using a solid-state cation exchange membrane. |
In the case of PEM water electrolysis, hydrogen can be produced even with a relatively small power supply, allowing it to operate solely on renewable energy. However, its drawbacks include high initial installation costs and a lower level of technological maturity compared to alkaline water electrolysis. These challenges make it difficult to build a green hydrogen production infrastructure relying on just one technology.
To address this, the research team conducted a comparative analysis of the technical characteristics and economic feasibility of alkaline water electrolysis and PEM water electrolysis, ultimately deriving optimal operation strategies. In particular, they proposed that the most cost-effective approach is to use the existing power grid as a supplemental power source to provide a stable electricity supply for operating alkaline water electrolysis systems.
If a stable power supply is not maintained for alkaline water electrolysis systems, repeated start-up and shutdown cycles can cause degradation, reducing both the system's lifespan and efficiency. To overcome this, it is essential to continuously supply power using auxiliary sources such as energy storage systems (ESS).
According to the research team's analysis, when using renewable energy combined with an energy storage system (ESS) as a backup power source, the hydrogen production cost was estimated at up to $8.60 per kilogram. In contrast, securing supplementary power from the existing fossil fuel-based power grid could reduce the cost to around $6.60 per kilogram. While, for now, linking to the existing power grid is the more economical option, this approach does not resolve environmental concerns. In the long term, the study suggests that reducing ESS costs and increasing the share of carbon-free power sources—such as biomass and nuclear energy—will be essential to achieving both economic and environmental sustainability in hydrogen production.
* Levelized Cost of Hydrogen (LCOH): An indicator that calculates the unit cost of hydrogen production by dividing the total capital and operating costs of hydrogen production by the total amount of hydrogen produced. * Hydrogen Production Cost Calculation Criteria ESS Combination: Estimated at $8.60 per kilogram when using an energy storage system (ESS) with a capacity of 500 megawatt-hours (MWh). Power Grid Utilization: Estimated at $6.60 per kilogram based on utilizing 20% of the minimum power required to operate alkaline water electrolysis from the existing power grid. |
For PEM water electrolysis, the research team suggested that applying an electrical overload could actually improve economic efficiency. This is because PEM systems are capable of overload operation, allowing excess power beyond the required amount to be supplied in order to increase hydrogen production. The analysis showed that by boosting renewable energy output and supplying 1.5 times the required power, the hydrogen production cost could be reduced to as low as $5.80 per kilogram.
Based on these findings, the research team concluded that PEM water electrolysis is the most suitable option in environments with a high share of renewable energy and a stable power supply. In other cases, the ideal approach is to combine alkaline water electrolysis with a carbon-free power grid.
Additionally, the research team proposed an optimal water electrolysis-based hydrogen production combination tailored to Korea's energy landscape. Based on an analysis using meteorological data from Jeju Island, the study found that, in the future, a stable hydrogen supply at approximately $4 per kilogram could be achieved by combining a 100-megawatt (MW) water electrolysis system with 100 MW of offshore wind power and 100 MW of solar power.
Dr. Joungho Park, who led the study at KIER, stated, "This research is significant in that it clearly analyzes the technical differences between alkaline and PEM water electrolysis and presents optimal design and operation strategies tailored to different energy environments." He added, "We expect these findings to serve as a valuable reference for selecting technologies and guiding investment decisions when building hydrogen production systems using renewable energy in the future."
