Renewable Energy’s Impact on Reducing the Levelized Cost of Hydrogen in the Production of Green Hydrogen: A Regional Comparison

The technology of green hydrogen, produced through electrolysis using renewable energy, represents an innovative approach to decarbonising energy systems. This study systematically reviews and analyses the implications of various renewable energy sources, such as solar, wind, and hydropower, on the reduction of the levelized cost of hydrogen across six regions: Europe, North America, South America, Australia, the Middle East and Africa, and Asia. By employing a technoeconomic review, this research conducts a comparative analysis of the factors contributing to the costs of hydrogen trading, including renewable energy capacity factors, capital expenditures, and electricity pricing. The findings show that regions with a high penetration of renewable energy, especially Europe, consistently achieve a lower levelized cost of hydrogen and have a high compound annual growth rate. Conversely, Asia, where the adoption of renewable technologies is relatively slow, exhibits higher costs. This analysis underscores the importance of renewable energy scalability and the necessity for supportive policy frameworks in enhancing the competitiveness of green hydrogen. Researchers have highlighted that the cost-effectiveness of green hydrogen is strongly contingent upon the accessibility and affordability of renewable energy resources. Regions abundant in solar and wind potential, such as Africa, Australia, and certain parts of South America, are therefore better positioned to realise lower production costs compared to areas with restricted renewable potential. Moreover, the integration of large-scale renewable energy initiatives, advancements in electrolysis efficiency, and the establishment of conducive policy frameworks are critical strategies for reducing the cost of green hydrogen, thereby making it more competitive with hydrogen derived from fossil fuels.