Research indicates that the co-location of electrolysis and offshore wind is cheaper than green hydrogen production onshore. However, Gea Bermúdez et al. (2021) argue that such studies are imperfect as they only consider a limited part of the value chain. Green hydrogen has the potential to provide synergy and flexibility across the energy system, a synergy not captured from a narrow techno-economic perspective. And so, Gea Bermúdez et al. (2021) look at the future role of off-shore hydrogen generation from a holistic socio-economic perspective by performing least-cost energy system simulations of the European North Sea region towards 2050.

Gea Bermúdez et al. (2021) find that offshore hydrogen production towards 2050 will likely only have a limited role. Even if offshore hydrogen is cheaper, it is still beneficial to send the wind energy to shore in the form of electricity instead. Onshore, the excess heat from electrolysis can be utilised for district heating, and with enough hydrogen storage, production can be adjusted according to the varying electricity price. Overall, in a 2050 scenario where most electricity comes from wind and solar, onshore hydrogen production provides flexibility and is the most cost-effective solution - from a holistic socio-economic perspective.

Gea Bermúdez, Juan, Rasmus Bo Bramstoft Pedersen, Matti Juhani Koivisto, Lena Kitzing, and Andrés Ramos. 2021. “Going Offshore or Not: Where to Generate Hydrogen in Future Integrated Energy Systems?” TechRxiv, Preprint. https://www.techrxiv.org/articles/preprint/Going_offshore_or_not_Where_to_generate_hydrogen_in_future_integrated_energy_systems_/14806647