Stakeholder and Techno-Economic Assessment of Iceland’s Green Hydrogen Economy

Nargessadat Emami, Reza Fazeli (), Til Seth Tzschockel, Kevin Joseph Dillman and Jukka Heinonen
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Nargessadat Emami: Faculty of Civil and Environmental Engineering, School of Engineering and Natural Sciences, University of Iceland, 107 Reykjavík, Iceland
Reza Fazeli: School of Engineering, The Australian National University, Canberra 2601, Australia
Til Seth Tzschockel: Environment and Natural Resources, School of Engineering and Natural Sciences, University of Iceland, 107 Reykjavík, Iceland
Kevin Joseph Dillman: Environment and Natural Resources, School of Engineering and Natural Sciences, University of Iceland, 107 Reykjavík, Iceland
Jukka Heinonen: Faculty of Civil and Environmental Engineering, School of Engineering and Natural Sciences, University of Iceland, 107 Reykjavík, Iceland

Energies, 2025, vol. 18, issue 6, 1-21

Abstract: Green hydrogen is a promising energy carrier for the decarbonization of hard-to-abate sectors and supporting renewable energy integration, aligning with carbon neutrality goals like the European Green Deal. Iceland’s abundant renewable energy and decarbonized electricity system position it as a strong candidate for green hydrogen production. Despite early initiatives, its hydrogen economy has yet to significantly expand. This study evaluated Iceland’s hydrogen development through stakeholder interviews and a techno-economic analysis of alkaline and PEM electrolyzers. Stakeholders were driven by decarbonization goals, economic opportunities, and energy security but faced technological, economic, and governance challenges. Recommendations include building stakeholder confidence, financial incentives, and creating hydrogen-based chemicals to boost demand. Currently, alkaline electrolyzers are more cost-effective (EUR 1.5–2.8/kg) than PEMs (EUR 2.1–3.6/kg), though the future costs for both could drop below EUR 1.5/kg. Iceland’s low electricity costs and high electrolyzer capacity provide a competitive edge. However, this advantage may shrink as solar and wind costs decline globally, particularly in regions like Australia. This work’s findings emphasize the need for strategic planning to sustain competitiveness and offer transferable insights for other regions introducing hydrogen into ecosystems lacking infrastructure.

Keywords: green hydrogen; techno-economic analysis; stakeholder engagement; decarbonization (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2025
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