Advances in Power-to-Gas Technologies: Cost and Conversion Efficiency

Gunther Glenk, Philip Holler, and Stefan Reichelstein

April 2023

Widespread adoption of hydrogen as an energy carrier is widely believed to require continued advances in Power-to-Gas (PtG) technologies. Here we provide a comprehensive assessment of the dynamics of system prices and conversion efficiency for three currently prevalent PtG technologies: alkaline, polymer electrolyte membrane, and solid oxide cell electrolysis. We analyze global data points for system prices, energy consumption, and the cumulative installed capacity for each technology. Our regression results establish that, over the past two decades, every doubling of cumulative installed capacity resulted in system prices coming down by 14-17%, while the energy required for electrolysis was reduced by 2%. Incorporating multiple forecasts of future deployment growth, our calculations project that, in the coming decade, all three technologies will become substantially cheaper and more energy-efficient. Specifically, the life-cycle cost of electrolytic hydrogen production is projected to fall in the range of $1.6-1.9/kg by 2030, thereby approaching but not reaching the $1.0/kg cost target set by the U.S. Department of Energy.

Keywords: learning-by-doing, hydrogen, electrolysis, power-to-gas, energy storage

JEL Codes: M1, O33, Q41, Q42, Q48, Q54, Q55