Assumptions and Definitions

Find definitions and assumptions related to the interactive Low-Temperature Electrolysis CO₂ Conversion Tool.

Capacity factor – The percent of plant uptime in a year.

Cell degradation rate – Average hourly increase in cell voltage (microvolts per hour) across the lifetime of the stack due to degradation and other fouling mechanisms.

Cell voltage – Applied cell potential across the electrolyzer.

CO₂ feed rate – Flowrate of CO₂ into the process in terms of kilograms per hour.

CO₂ price – Price paid to acquire CO₂ feedstock in terms of dollars per metric ton.

CO₂ single-pass conversion – The percentage of CO₂ fed to the electrolyzer that is converted into target products.

Cost of debt – Annual interest rate on debt in terms of percent.

Cost of equity – Annual interest rate on equity in terms of percent.

Current density – The amount of current passed through a unit surface area of an electrode.

Debt financing – The assumed fraction of total capital investment funded by raising debt.

Deionized water price – Price paid for deionized water required to operate electrolyzer in terms of dollars per kilogram.

Discount rate, internal rate of return – The interest/discount rate at which the project's net present value equals zero, in terms of percent.

Effective tax rate – Cumulative tax rate accounting for state, local, and federal taxes, in terms of percent.

Electricity price – Price paid for electricity to operate electrolyzer and plant in terms of dollars per megawatt-hours.

Electrolyzer unit capital expenditure – Total cost of an electrolyzer (stack + balance of plant) in terms of dollars per square meter.

Equity financing – The assumed fraction of total capital investment funded by raising equity.

Faradaic efficiency – The percentage of incoming charge (electrons) that are consumed to produce target product.

Hydrogen price – Assumed coproduct hydrogen selling price in terms of dollars per kilogram.

Levelized cost of product – The discounted, lifetime-average total cost of building and operating a plant, normalized per unit of product generated (e.g., dollars per kilogram). Calculations based on the National Energy Technology Laboratory's Quality Guidelines for Energy System Studies: Cost Estimation Methodology for NETL Techno-Economic Assessments (March 2025).

Loan term – Length of loan in terms of years.

Minimum selling price – Also known as MSP, the minimum price at which the product must sell to generate a net present value of zero for a 10% internal rate of return.

Although MSP is represented as a single point value, uncertainty exists around the conceptual cost estimates. Our analysis approach and data reported herein are analogous to a "Class 4” study of feasibility as defined by the Association for the Advancement of Cost Engineering International Recommended Practice No. 18R-9751. Consequently, the implied accuracy of the estimates are likely similar to the expressed Class 4 range of -30% to +50%. See The Economic Outlook for Converting CO2 and Electrons to Molecules, Energy & Environmental Science (2021) for more detail.

Natural gas price – Price paid for natural gas-fired process heat in terms of dollars per million British thermal units.

Plant lifetime – Assumed operational lifetime of the plant in terms of years.

Stack lifetime – Lifetime of an electrolyzer stack in terms of years.

Stack replacement cost – Replacement cost of the electrolyzer stack only in terms of percent of initial capital expenditure.

Weighted average cost of capital (WACC) – Used in levelized cost of production calculations in terms of percent.