Analysis of the economy of scale and estimation of the future hydrogen production costs at on-site hydrogen refueling stations in Korea

This paper deals with the analysis of the economy of scale at on-site hydrogen refueling stations which produce hydrogen through steam methane reforming or water electrolysis, in order to identify the optimum energy mix as well as the total construction cost of hydrogen refueling stations in Korea. To assess the economy of scale at on-site hydrogen stations, the unit hydrogen costs at hydrogen stations with capacities of 30 Nm3/h, 100 Nm3/h, 300 Nm3/h, and 700 Nm3/h were estimated. Due to the relatively high price of natural gas compared to the cost of electricity in Korea, water electrolysis is more economical than steam methane reforming if the hydrogen production capacity is small. It seems to be the best strategy for Korea to construct small water electrolysis hydrogen stations with production capacities of 100 Nm3/h or less until 2020, and to construct steam methane reforming hydrogen stations with production capacities of 300 Nm3/h or more after 2025.

► The life cycle analysis method is used to estimate hydrogen station costs in Korea.
► To identify the optimal energy mix, the economy of scale of stations is analyzed.
► In Korea, small-scale water electrolysis stations are economical until 2020.
► Medium and large-scale steam methane reforming stations are economical after 2025.