The capital cost of conventional electrolysers is very high and it contributes about 70-80% of the overall cost of hydrogen in small to medium scale (5kW-100kW scale) and up to 60-80% in 100kW-1MW scale. Therefore even if the input electricity is free, the cost of hydrogen would still be over £2/kg H2 due to the capital cost for a 1MW electrolyser running continuously for 10 years. But in reality renewable energy powered electrolysers would run for about 30% of the time of the year and often at part load rather than at its full capacity. Duo to this 1/3rd capacity utilisation, the cost of hydrogen due to its capital cost would tend to be around £6/kg H2, which is more than double than the equivalent price of diesel (taxed) in the UK. Therefore the capital cost of hydrogen needs to come down by 70-80% than current prices, that is what Engas Global is offering. As an approximate guide the real capital cost of conventional electrolysers today are :

• £1500/kW for 20-30MW scale electrolysers but they require significant additional cost on infrastructure to deliver vast amount of electricity and to discharge vast amount of hydrogen via pipeline.
• £2500-£3000/kW for 1-10MW scale electrolysers still requires large infrastructure.
• £3000-£4000/kW for 100kW-1MW scale; these electrolysers can have many distributed applications of solar hydrogen for heating and refuelling, but the cost of hydrogen (£/kg) becomes prohibitive compared to diesel for any commercial use.
• £4000-£7000/kW for 50-100kW scale electrolysers can find also opportunities but the cost of hydrogen £/kg) from such hydrogen is extremely unattractive.
• £7000-£10,000/kW for 1-10kW scale electrolyser subject to conditions. These prices are extremely high and it can find its use mainly in laboratories as a replacement of expensive hydrogen cylinders.
• The cost of hydrogen delivered in cylinders is about £50-135/kg H2 excluding the rental cost of cylinders. Reference: BOC).

Green Hydrogen: Electrolysers play a pivotal role to integrate more renewables, heating, and hard to decarbonise transport sectors. As more and more renewables are connected to the energy mix, there will be a widening mismatch of demand vs supply, creating major opportunities for energy storage to reduce this gap. Surplus electricity is being stored into batteries (which is OK) and it is converted into hydrogen gas electrolysers for cross cutting applications. Hydrogen production powered by offshore wind farms, and floating wind turbines for refuelling of ships brings a clear opportunity for hydrogen. Likewise many large solar PV farms and project developers are exploring the life after 'feed in tariff ' regime, and hydrogen provides a new market to buy cheap electricity from solar PV to upgrade into higher value hydrogen and oxygen gases.  

Blue hydrogen: Injecting 20% hydrogen into the natural gas grid by utilities are apparently suitable in many existing gas boilers, gas-cookers and for power generation in existing CCGT plants (combined cycle gas turbines), but for any high purify applications e.g. in fuel cells, this hydrogen needs to be purified again to separate out methane from hydrogen, which will not be cheap at the every point of clean hydrogen use. This is likely to restrict the use of 20% blended hydrogen in transport application.  Therefore high purity green hydrogen still needs to be produced locally to run H2 buses, trains, trucks, canal boats, ferries etc. For this reason low cost medium scale electrolysers are going to play a vital role convert stranded, surplus or cheaper electricity locally without major infrastructure cost.