Economic Analysis of Hydrogen and Formate Co-production via Fluctuating-Power Methanol Electrolysis

Abstract

Methanol (MeOH) emerges as a cost-efficient hydrogen vector, enabling distributed on-demand hydrogen production to overcome energy storage costs and low-value outputs in green hydrogen systems, yet renewable-powered electrolysis faces volatility-induced economic hurdles. Here, we propose a paradigm-shifting strategy: storage-free prioritized operation with in-situ acid-base neutralization for methanol electrolysis. Leveraging real-world wind-solar complementary power data from Shandong Province, a mixed-integer linear programming model integrates electricity volatility, market dynamics, and reactor response. Crucially, energy storage exhibits negative economic effects-eliminating it reduces the levelized cost of hydrogen (LCOH) by 13.8% to 13.54 USD/kg H2. The integration of formate co-production via electrolyte neutralization triples the internal rate of return (IRR) from 9.6% to 21.7%, achieving a 116.4% return on investment. More importantly, sensitivity analysis identifies methanol pricing as the dominant economic lever: a 10% price decrease slashes LCOH by 0.3 USD/kg H2, exhibiting 2-fold higher sensitivity than the electrolyzer (EC) price fluctuations. This work redefines distributed hydrogen economics by optimizing the green electricity-methanol-hydrogen-chemical chain.