Techno-Economic Challenges in Hydrogen Production 

As hydrogen continues to gain momentum as a cornerstone of the clean energy transition, techno-economic challenges remain a critical barrier to its widespread adoption—especially for green hydrogen produced via electrolysis. 

1. High Capital and Operational Costs 

Electrolyzers (PEM, alkaline, SOEC) are capital-intensive, with Levelized Cost of Hydrogen (LCOH) ranging from $4–6/kg—well above gray hydrogen (~$1.5/kg). The cost of renewable electricity remains the most significant contributor, often accounting for up to 70% of the total production cost. 

2. Intermittent Renewable Supply 

Electrolyzers powered by solar or wind face low capacity utilization due to the variable nature of renewables. This leads to underutilization of capital assets, affecting the economic viability and return on investment (ROI). 

3. Water and Land Constraints 

Large-scale electrolysis requires significant quantities of deionized water and land for solar/wind installations. In water-scarce or densely populated regions, this adds an additional layer of logistical and economic complexity. 

4. Integration with Downstream Use 

Hydrogen must be produced, stored, and consumed in a coordinated manner. The lack of pipelines, hydrogen hubs, and end-use readiness (especially in heavy industry) adds supply chain risk and investment uncertainty. 

5. Policy and Carbon Pricing Gaps 

Without supportive carbon pricing, green hydrogen remains uncompetitive. Subsidies, tax incentives, and mandates are still evolving, and uncertainty in regulation dampens large-scale investments. 

ChemKlub’s Role in Techno-Economic Modeling 

At ChemKlub, we help engineers and decision-makers simulate hydrogen production systems using Aspen Plus®, conduct techno-economic feasibility studies, and evaluate LCOH under different operational and policy scenarios.  

Our industry-oriented modules bridge the gap between technical performance and economic viability.