Future cost and performance of water electrolysis


The need for energy storage to balance intermittent and inflexible electricity supply with demand is driving interest in conversion of renewable electricity via electrolysis into a storable gas. But, high capital cost and uncertainty regarding future cost and performance improvements are barriers to investment in water electrolysis.

Researchers at Imperial College London: Oliver Schmidt, Dr. Iain Staffel, Dr. Ajay Gambhir, Professor Jenny Nelson, Dr. Adam Hawkes and Dr. Sheridan Few analysed the potential for future cost and performance improvements of water electrolysis using expert elicitations. Expert elicitations use structured discussions with experts to obtain estimates for uncertain parameters and can support decision-making when data are sparse and their future development uncertain. The researchers interviewed ten experts from industry and academia about the capital cost, lifetime and efficiency of three electrolyser types: alkaline (AEC), proton-exchange membrane (PEMEC) and solid-oxide (SOEC) by 2020 and 2030. They put emphasis on the drivers for cost and performance improvements, asking about the impact of increased R&D funding or production scale-up, and noting specific innovations mentioned in line with future cost and performance estimates. Their work has therefore been published in the journal, International Journal of Hydrogen Energy.

The researchers find that increased R&D funding can reduce capital costs by 0-24%, while production scale-up alone has an impact of 17-30%. System lifetimes may converge at around 60,000-90,000 hours and efficiency improvements will be negligible. In addition to innovations on the cell-level, experts highlight improved production methods to automate manufacturing and produce higher quality components. The research team thereby made a significant step to reduce barriers to investment in water electrolysis and show how expert elicitations can help guide near-term investment, policy and research efforts to support the development of electrolysis for low-carbon energy systems.

Lead author Oliver Schmidt concludes: “Water electrolysis is the gateway technology for long-term energy storage and the decarbonisation of heavy duty transport, heating and industrial processes with renewable hydrogen. Unfortunately, uncertain future capital cost limit investments in this technology. Our research identifies not only potential cost and performance improvements of this technology, but also the drivers and actual innovations enabling these improvements. It thereby increases transparency for policy-makers and investors, reducing the main barrier for investment in water electrolysis technology.”

Future cost performance of water electrolysis Advances in Engineering

About the author

Oliver Schmidt pursues a PhD at Imperial College London. He works in the mitigation team of Imperial’s Grantham Institute.

Oliver projects the future cost of electricity storage technologies using learning curves and expert interviews. Based on these cost projections, he determines the value of electricity storage in applications relevant for low-carbon power systems.

After studying mechanical engineering at ETH Zurich and Imperial College London, Oliver spent two years in consulting of a major European utility, where he supported top management in decisions on the key challenges of the sector.

Oliver is the founder of Storage Lab, a research hub providing industry and policymakers with insights on electricity storage technologies. Recent projects include

  • advising a global mining company on raw material demand development from electricity storage technologies
  • comparing the levelized cost of storage (LCOS) of a novel electricity storage technology to established ones for a start-up.


Schmidt, O., Gambhir, A., Staffell, I., Hawkes, A., Nelson, J., & Few, S. (2017). Future cost and performance of water electrolysis: An expert elicitation study. International Journal of Hydrogen Energy, 42(52), 30470-30492.


Go To International Journal of Hydrogen Energy

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