  We present a techno-economic optimization model for evaluating the design and
operation of proton exchange membrane (PEM) electrolyzers, crucial for hydrogen
production powered by variable renewable electricity. This model integrates a
0-D physics representation of the electrolyzer stack, complete mass and energy
balances, operational constraints, and empirical data on use-dependent
degradation. Utilizing a decomposition approach, the model predicts optimal
electrolyzer size, operation, and necessary hydrogen storage to satisfy
baseload demands across various technology and electricity price scenarios.
Analysis for 2022 shows that including degradation effects raises the levelized
cost of hydrogen from \$4.56/kg to \$6.60/kg and decreases stack life to two
years. However, projections for 2030 anticipate a significant reduction in
costs to approximately \$2.50/kg due to lower capital expenses, leading to
larger stacks, extended lifetimes, and less hydrogen storage. This approach is
adaptable to other electrochemical systems relevant for decarbonization.
