Uncertainty ahead: Should stand-alone energy systems bet on hydrogen backup?

Abstract

Achieving net zero by 2050 will require decarbonising stand-alone energy applications. Hydrogen is increasingly viewed as a promising energy carrier, but its economic viability remains uncertain due to the lack of consensus on future demand and limited deployment of key components, such as fuel cells, in stationary stand-alone applications. This study investigates whether hybridising batteries with hydrogen can deliver meaningful cost benefits under future cost trajectories. Using a Monte Carlo framework, we simulate 8000 scenarios across constant and seasonal load profiles, varying the capital costs of batteries, fuel cells, electrolysers, and hydrogen tanks based on 2025 estimates and 2050 projections. Our results show that hydrogen integration only becomes economically attractive when multiple component costs decline simultaneously. The fuel cell-to-battery power capital cost ratio emerges as the dominant driver of levelised cost of energy (LCOE) improvements. For constant loads, median LCOE savings remain below 12 %, with more than 5 % savings only achieved when the fuel cell cost is less than 7 times that of the battery. Seasonal nighttime loads offer a wider theoretical LCOE savings range (0–156 %), but substantial gains occur only under unrealistic cost mixes where battery costs remain high and fuel cell costs fall sharply. These findings highlight the sensitivity of hydrogen viability to load profile characteristics and cost interdependencies. They underscore the need for targeted cost reduction strategies, particularly for fuel cells, to justify added system complexity. These findings are important considerations for future investment and policy decisions. Show more