Contributing factors to levelised cost of hydrogen production difference between Germany and Ukraine, 2023

Notes

LCOH = levelised cost of hydrogen; WACC = weighted average cost of capital. Assuming 100% production from onshore wind, which represents the largest share of Ukraine’s renewable potential, CAPEX for onshore wind in Germany of USD 1 750/kW and USD 1 373/kW for Ukraine. CAPEX of USD 2 160/kW for the electrolyser, and capacity factors of 29% and 32% for onshore wind in Germany and Ukraine, respectively. Electrolyser capacity is not optimised and assumed to be double the capacity of the renewable capacity. Weighted average cost of capital (WACC) for Germany assumed to be 4.2% taking the last real point available (1.3% in 2021) and correcting for risk-free interest rate change (based on US 10-year treasury bonds). For Ukraine, WACC is 12.2% pre-invasion and 25% post-invasion. WACC premium of 2% points for electrolysis.