(107d) Hourly Time-Matching Requirement for Electrolytic Hydrogen Production: Is the Added Cost Justifiable?

Low-carbon hydrogen—particularly electrolytic “green” hydrogen generated from renewable electricity—features in many national net-zero strategies because it promises lower carbon emissions in traditional uses and decarbonization across a wide range of sectors, including heat, power, and mobility. Yet the strict regulations frequently proposed to ensure hydrogen’s “green” credentials, such as hourly time-matching of electrolyzer power consumption to local renewable generation, can drive up costs significantly. This work investigates whether policies that demand perfect, hourly time-matching with renewable electricity are truly necessary or whether more relaxed strategies could enable affordable low-carbon hydrogen production.

We use a resource-task network modelling framework, which links hydrogen production—via water electrolysis—with regional renewable generation and energy storage at an hourly resolution. We use 20 years of weather data to capture inter- and intra-annual variability of renewable sources. Using this framework, the least-cost system design and operation can be determined based on differing time-matching constraints. By comparing scenarios that allow partial reliance on grid electricity against those requiring perfect hourly time-matching with renewables, we can quantify the trade-offs in production cost and environmental impact.

Our findings show that strict hourly time-matching requirements can substantially increase hydrogen production costs while providing only marginal emissions reductions, leading to CO₂ avoidance costs higher than other expensive mitigation options such as direct air capture. This suggests that overly strict time-matching rules yield limited climate benefits relative to their cost, whereas a modest relaxation of these requirements offers a more pragmatic and cost-effective pathway to low-carbon hydrogen production—and thus potentially enabling a broader adoption.

Moreover, in jurisdictions with credible near- to medium-term decarbonization targets, fully grid-powered electrolysis may have a lifetime carbon intensity comparable to, or even lower than, that of other low-carbon hydrogen pathways. This underscores the importance of rapid, broader grid decarbonization as a key policy priority.