Electrolysis is the process of using electrical energy to drive a chemical reaction that would not happen on its own, most commonly splitting water into hydrogen and oxygen. The technique dates back to 1789, when the first documented generation of hydrogen by electricity was achieved using an electrostatic generator, and by 1900 more than 400 industrial water electrolyzers were operating worldwide.1Electrochemical Power Sources: Fundamentals, Systems, and Applications. The history of water electrolysis from its beginnings to the present Today, electrolysis sits at the center of the global push for clean hydrogen, but the same underlying principle also drives major industrial processes from chlorine manufacturing to aluminum smelting. The science is straightforward; the engineering and economics are where things get complicated.
What Happens During Electrolysis
At its core, electrolysis forces a non-spontaneous chemical change by pushing electric current through a substance. In water electrolysis, two electrodes sit in water (usually with an added electrolyte to improve conductivity). When voltage is applied, water molecules break apart: hydrogen gas forms at the cathode and oxygen gas forms at the anode. The minimum theoretical voltage needed to split water is about 1.23 volts, but in practice you always need more because of energy losses along the way.
Those losses come from several places. The resistance of the electrodes themselves, the electrolyte solution, any membrane separating the two sides of the cell, internal wiring, and even the tiny gas bubbles that form on electrode surfaces all contribute to what engineers call ohmic polarization. The electrode and membrane materials, the concentration and conductivity of the electrolyte, and the physical geometry of the cell are the most critical factors governing these losses.2International Journal of Hydrogen Energy. Evaluation and optimization of the alkaline water electrolysis ohmic polarization: Exergy study This is why much of modern electrolyzer research focuses on shaving down those inefficiencies rather than reinventing the basic chemistry.
Four Competing Electrolyzer Technologies
Not all electrolyzers work the same way. Four main designs are either commercially available or under active development, each with a distinct set of trade-offs around cost, efficiency, durability, and the materials they require.
Alkaline Water Electrolysis
Alkaline water electrolysis (AWE) is the oldest and most commercially mature approach. It uses a liquid alkaline solution, typically potassium hydroxide, as the electrolyte. AWE consistently has the lowest capital cost of any electrolyzer type, around $1,816 per kilowatt in recent assessments, and its stacks can last up to 80,000 hours.3Applied Energy. Techno-economic assessments of electrolyzers for hydrogen production The trade-off is that alkaline systems are bulkier and slower to ramp up and down than some alternatives, and they face multiscale mass-transport challenges that limit both efficiency and long-term durability.4Advanced Energy Materials. Toward Energy‐Efficient Alkaline Water Electrolysis: Advances in Mass Transport Optimization and Electrolyzer Design
Proton Exchange Membrane Electrolysis
PEM electrolyzers use a solid polymer membrane instead of a liquid electrolyte. They produce very high purity hydrogen, can operate at high current densities, and respond quickly to changes in power input, making them well suited for pairing with variable renewable energy sources like solar and wind.5Carbon Neutrality. PEM water electrolysis for hydrogen production: fundamentals, advances, and prospects PEM systems are compact and relatively easy to maintain, but they cost more upfront (roughly $2,147 per kilowatt) and have shorter stack lifespans of around 60,000 hours compared to alkaline systems.6Applied Energy. Techno-economic assessments of electrolyzers for hydrogen production They also require ultrapure water and, critically, rely on rare and expensive catalyst materials.
Solid Oxide Electrolysis
Solid oxide electrolysis cells (SOECs) operate at very high temperatures, typically above 700°C. This heat input reduces the electrical energy required, so SOECs can achieve the highest electrical efficiency of any electrolyzer type, in the range of 70% to 90% when waste heat from industrial processes or nuclear plants is available.7Applied Energy. Techno-economic assessments of electrolyzers for hydrogen production They also avoid noble metal catalysts entirely.8PubMed Central. High Temperature Solid Oxide Electrolysis for Green Hydrogen Production The downsides are significant: SOEC stacks degrade faster under thermal cycling, the materials are expensive, and the technology remains largely pre-commercial.
Anion Exchange Membrane Electrolysis
AEM electrolysis is the newest entrant. It aims to combine the best features of the alkaline and PEM approaches: the compact, membrane-based design of PEM with the ability to use cheap transition metal catalysts instead of noble metals like iridium or platinum.9Renewable and Sustainable Energy Reviews. Low cost hydrogen production by anion exchange membrane electrolysis: A review AEM electrolyzers are seen as an attractive pathway for large-scale, low-cost hydrogen production.10Carbon Neutralization. Anion exchange membrane water electrolysis for sustainable large‐scale hydrogen production The technology is still developing, though, and membrane stability, power efficiency, and overall robustness all need improvement before it can compete commercially.
Electrolysis Beyond Water Splitting
Hydrogen production gets most of the attention today, but electrolysis has been an industrial workhorse for well over a century in other applications. The chlor-alkali process, which electrolyzes brine (saltwater) to produce chlorine gas, sodium hydroxide (caustic soda), and hydrogen, is one of the largest industrial chemical processes in the world. The technology has evolved through three generations: from mercury cells to diaphragm cells and finally to modern ion exchange membrane cells.11Transactions of Tianjin University. Revisiting Chlor-Alkali Electrolyzers: from Materials to Devices Nearly all the chlorine used in water treatment, plastics manufacturing, and pharmaceuticals comes from this process.
Aluminum smelting is another massive electrolytic industry. The Hall-Héroult process dissolves aluminum oxide in a molten cryolite bath and passes enormous electric current through it to reduce the aluminum. This is extremely energy-intensive, which is why aluminum smelters are famously located near cheap hydroelectric power. The process has been in continuous use since the late 1800s and remains the only commercial method for producing primary aluminum.12PubMed Central. The aluminum smelting process Electroplating, copper refining, and the production of various chemicals like sodium chlorate also rely on electrolysis, though at smaller scales.
The Iridium Bottleneck
One of the most serious obstacles to scaling up PEM electrolysis is its dependence on iridium, one of the rarest elements in the Earth’s crust. Global annual iridium production is only about 7 to 8 tons, with over 70% coming from South Africa and most of the rest from Russia. At the catalyst loadings commonly used in commercial PEM electrolyzers today, the roughly 2 tons of iridium that could realistically be diverted to electrolyzer manufacturing each year would support a maximum annual deployment of about 6 gigawatts of PEM capacity.13Chem Catalysis. Iridium management strategies for scalable proton exchange membrane water electrolysis
That sounds like a lot until you compare it to the scale of ambition. To reach a cumulative global PEM electrolyzer capacity of over 1,000 gigawatts by 2050, the world would need to install an average of about 45 gigawatts per year. Meeting that target would require reducing iridium loading by roughly an order of magnitude, from the current standard of about 1.0 milligrams per square centimeter down to around 0.13 milligrams per square centimeter.14Chem Catalysis. Iridium management strategies for scalable proton exchange membrane water electrolysis This is a major area of research: finding ways to use less iridium per unit of electrolyzer, developing iridium-free catalysts, or shifting entirely to technologies like AEM or SOEC that do not need noble metals at all.
Research into earth-abundant catalysts offers one possible escape from this constraint. Cobalt phosphate and nickel borate catalysts, for instance, have been shown to work as oxygen evolution catalysts, with nickel borate demonstrating both good performance and superior chemical robustness as a protective layer on electrode surfaces.15PubMed Central. Earth-abundant oxygen evolution catalysts coupled onto ZnO nanowire arrays for efficient photoelectrochemical water cleavage These materials are far cheaper and more abundant than iridium, though the performance gap is still being closed.
Water Purity and the Seawater Question
Electrolyzers are picky about the water they consume. PEM systems require extremely pure water with conductivity as low as 0.05 to 0.08 microsiemens per centimeter, while alkaline systems are somewhat more forgiving, accepting water in the 1 to 2 microsiemens per centimeter range. Achieving this typically means running water through a multi-step treatment process involving ultrafiltration, reverse osmosis, and ion exchange.16Next Energy. Integration of geothermal power plant, water treatment plant, AWE, and PEM electrolyzer for green hydrogen production: A techno-economic study The water treatment itself adds cost and complexity, especially in arid regions or places with poor freshwater access.
Seawater electrolysis is an obvious idea: the oceans are effectively limitless. But seawater introduces serious problems. Chloride ions in seawater can trigger the chlorine evolution reaction, which competes with the desired oxygen evolution reaction at the anode. The result is corrosion of electrode materials and a drop in efficiency. Dissolved impurities, including magnesium and calcium salts, can foul membranes and poison catalysts over time.17PubMed Central. Comprehensive Chlorine Suppression: Advances in Materials and System Technologies for Direct Seawater Electrolysis Researchers are making progress on chlorine-suppressing coatings and corrosion-resistant materials, but for now, large-scale seawater electrolysis without a desalination step remains more of a research frontier than a commercial reality.
Coupling Electrolyzers with Renewable Power
The promise of “green hydrogen” depends on running electrolyzers with renewable electricity. In principle this works well: the electrical response of water electrolyzers is extremely fast, so they can follow the variable output of a solar array or wind farm almost in real time. The slower variables, such as temperature and pressure inside the cell, are the actual limiting factors during fluctuating operation.18Renewable and Sustainable Energy Reviews. Dynamic operation of water electrolyzers: A review for applications in photovoltaic systems integration
In practice, though, running electrolyzers under constantly changing power creates durability concerns. PEM electrolyzers experience mild kinetic deactivation over time, with one study measuring voltage degradation of about 2.6 microvolts per hour regardless of the specific dynamic operating pattern, driven by a gradual loss of catalyst surface area.19Applied Energy. Degradation study of a proton exchange membrane water electrolyzer under dynamic operation conditions While that rate sounds tiny, it compounds over the thousands of hours an electrolyzer needs to run to pay for itself. Intermittent operation also causes thermal and pressure cycling that can stress membranes and seals, and the full picture of how dynamic conditions affect long-term durability is still being mapped out.20Renewable and Sustainable Energy Reviews. Dynamic electrical degradation of PEM electrolyzers under renewable energy Intermittency: Mechanisms, diagnostics, and mitigation strategies – A comprehensive review
There is also an economic upside to flexibility. A large electrolyzer can serve double duty by providing grid-balancing services. A 25-megawatt electrolyzer studied in the context of the Belgian grid was shown to generate considerable additional revenue by providing frequency containment reserves, essentially adjusting its power consumption up or down in real time to help stabilize grid frequency. The electrolyzer earns income from three streams: the hydrogen and oxygen it produces, and the ancillary service payment for grid support.21IET Renewable Power Generation. Grid balancing with a large‐scale electrolyser providing primary reserve Revenue depends heavily on how the contracted power band is optimized, but the finding suggests electrolyzers could help solve two problems at once: absorbing surplus renewable electricity and stabilizing the grid.
What Determines the Price of Electrolytic Hydrogen
The levelized cost of hydrogen, or the all-in cost per kilogram over the electrolyzer’s lifetime, depends on a surprisingly small number of factors. Across technologies, capacity factor (how many hours per year the electrolyzer actually runs) and the price of electricity are the two most influential variables, followed by the cost of capital, stack lifespan, and upfront equipment cost.22Applied Energy. Techno-economic assessments of electrolyzers for hydrogen production Electricity alone often accounts for the majority of the lifetime cost, which is why pairing electrolyzers with cheap renewables is so attractive.
Choosing the right operating point matters too. In a PEM electrolyzer running on Texas grid electricity, researchers found a minimum hydrogen cost of $2.84 per kilogram at a current density of 2.6 amps per square centimeter. Running the electrolyzer harder produces more hydrogen (reducing capital cost per kilogram) but at lower efficiency (raising electricity cost per kilogram). Those two trends create a sweet spot. When electricity prices are higher, the sweet spot shifts to a lower current density, closer to 1.7 amps per square centimeter, because efficiency matters more when power is expensive.23Cell Reports Physical Science. Dynamic operation of PEM electrolyzers to minimize the levelized cost of hydrogen under variable electricity pricing Smart operating strategies that adjust current density hour by hour in response to electricity prices can meaningfully lower costs compared to running at a fixed setting.
In a head-to-head comparison using a geothermal-powered system, AWE produced hydrogen at about $6.52 per kilogram versus $6.67 per kilogram for PEM, a small but consistent advantage driven mainly by AWE’s lower equipment costs and longer stack life.24Applied Energy. Techno-economic assessments of electrolyzers for hydrogen production These numbers will vary enormously depending on the electricity source and local conditions, but they illustrate why alkaline systems remain competitive despite being less glamorous than newer alternatives.
Co-Electrolysis and Synthetic Fuels
Electrolysis does not have to stop at splitting water. High-temperature solid oxide cells can simultaneously electrolyze water and carbon dioxide, producing a mixture of hydrogen and carbon monoxide known as synthesis gas, or syngas. This co-electrolysis approach has been demonstrated at high current densities of up to 3.2 amps per square centimeter with faradaic efficiencies (the fraction of electricity that actually goes into making useful product) of nearly 100%, and across a broad range of feed gas compositions.25Journal of The Electrochemical Society. High-Temperature Co-Electrolysis: A Versatile Method to Sustainably Produce Tailored Syngas Compositions
Syngas is a building block for a huge family of chemicals and fuels. It can be fed through a Fischer-Tropsch reactor to produce liquid hydrocarbons, essentially making synthetic diesel, jet fuel, or other transportation fuels from water, CO₂, and electricity. This pathway has been demonstrated at laboratory scale: a solid oxide cell produced syngas that was then converted to hydrocarbons.26ECS Transactions. Carbon Dioxide Recycling by High Temperature Co-electrolysis and Hydrocarbon Synthesis If the electricity comes from renewables and the CO₂ from direct air capture or industrial exhaust, the resulting fuel is theoretically carbon-neutral. The economics are still far from competitive with fossil fuels, but the chemistry works, and it represents one of the few plausible routes to decarbonizing aviation and shipping where batteries are too heavy to be practical.
Supply Chain Risks for Electrolyzer Materials
Scaling electrolysis to the level needed for a global energy transition will strain supply chains for several critical materials beyond iridium. A systematic assessment of metal supply risks for electrolyzer production found that niobium presents the highest geopolitical supply risk of any metal analyzed. Brazil dominates global niobium processing, and the supply chain is extremely concentrated: over 90% of China’s niobium imports and more than half of both Japan’s and the United States’ supply come from Brazil. When Brazil experienced political instability in 2019, the resulting spike in geopolitical risk scores rippled through supply assessments for several countries.27International Journal of Hydrogen Energy. Evolving supply risks of raw materials in hydrogen production: Transitioning from fossil fuels to metals
This is an underappreciated irony of the clean energy transition. Moving away from fossil fuels does not eliminate resource dependency; it shifts the dependency from oil and gas to metals. Iridium and platinum for PEM systems, nickel and zirconium for SOEC components, niobium for specialized alloys, and various rare earth elements all have concentrated supply chains vulnerable to political disruption and trade restrictions. Diversifying electrolyzer technology, rather than betting entirely on one design, is partly a hedge against these material bottlenecks. AEM electrolyzers, which use earth-abundant transition metal catalysts rather than noble metals, and SOEC systems, which avoid platinum-group metals altogether, each reduce exposure to different supply chain vulnerabilities, even as they introduce their own unsolved engineering problems.