The Impact of Country-specific Investment Risks on the Levelised Costs of Green Hydrogen Production

Green hydrogen is central to the global energy transition. This paper introduces a renewable hydrogen production system model that optimizes hydrogen production on a worldwide 50 km × 50 km grid, considering country-specific investment risks. Besides the renewable energy’s impact on the hydrogen production system (HPS) design, we analyze the effect of country-specific interest rates on the levelized cost of hydrogen (LCOH) production. Over one-third (40.0%) of all cells have an installed solar PV capacity share between 50% and 70%, 76.4% have a hybrid (onshore wind and solar PV) configuration. Hydrogen storage is deployed rather than battery storage to balance hydrogen production via electrolysis and hydrogen demand. Hybrid HPSs can significantly reduce the LCOH production compared to non-hybrid designs, whereas country-specific interest rates can lead to significant increases, diminishing the relative competitiveness of countries with abundant renewable energy resources compared to countries with fewer resources but fewer investment risks.