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50 GREEN HYDROGEN COST REDUCTION The key message is that hydrogen production through electrolysis can provide significant flexibility to match the seasonality of renewable energy generation, rather than follow shortterm fluctuations, which can be provided by shortterm storage technologies like batteries (including those in battery electric vehicles). The coupling with gas infrastructure (including salt caverns and pipeline systems) can provide extremely large energy storage volumes to perform seasonal energy storage of renewable electricity in molecular form, effectively decoupling hydrogen (and Power-to-X) demand from variable renewable electricity supply. This de facto provides the largest contribution to power system flexibility in terms of volume of all sources. For such system service, the speed of response of different electrolyser technologies is irrelevant, although both PEM and alkaline have been certified to provide primary reserves. Flexibility provided by large deployment of electrolysers into high renewable power systems will be a fundamental pillar of the transformation of the power sector, in combination with a set of other technologies, such as batteries (including in electric vehicles [EVs]), hydropower and pumped hydro, and demand response. 2.6 COSTS: CURRENT STATUS Despite their market availability and maturity, PEM and alkaline water electrolysers are still considered highly expensive from both CAPEX and OPEX perspectives, compared to fossil fuel-based hydrogen production. PEM water electrolysers are 50%-60% more expensive than alkaline (see Chapter 3, Section 2), representing an additional barrier to market penetration. Both are still considered to have untapped potential for cost decrease when considering economies of scale, automation, an increase in availability of components from various OEMs, massive market demand and deployment for energy storage (coupling electrolysers with underground storage or tanks). For AEM and solid oxide electrolysers, these cost considerations are much more challenging, as there are only a few companies responsible for their commercialisation. Moreover, many of their components are still lab-scale based, with no OEM responsible for their manufacturing and commercialisation. These are small stacks, and system sizes are only up to a few kilowatts. While these two technologies can still contribute to a low production cost of green hydrogen, they have a longer way to go compared to alkaline or PEM. For these reasons, only the cost breakdown for these two technologies is explored in more detail below. Significantly, AEM can use less-expensive materials (in particular titanium, which can represent around half the stack cost for PEM) and therefore AEM has an advantage over PEM in cost-reduction potential.PDF Image | GREEN HYDROGEN SCALING UP ELECTROLYSERS
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