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

Author

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  • Nargessadat Emami

    (Faculty of Civil and Environmental Engineering, School of Engineering and Natural Sciences, University of Iceland, 107 Reykjavík, Iceland
    Commonwealth Scientific and Industrial Research Organisation (CSIRO), Canberra 2601, Australia)

  • 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)

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.

Suggested Citation

  • Nargessadat Emami & Reza Fazeli & Til Seth Tzschockel & Kevin Joseph Dillman & Jukka Heinonen, 2025. "Stakeholder and Techno-Economic Assessment of Iceland’s Green Hydrogen Economy," Energies, MDPI, vol. 18(6), pages 1-21, March.
    • Handle: RePEc:gam:jeners:v:18:y:2025:i:6:p:1325-:d:1607727
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    References listed on IDEAS

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