Reducing Power System Costs in LMICs through Grid-Connected Green Hydrogen: Evidence from Kenya

Green hydrogen could support decarbonization and industrial development in low- and middle-income countries (LMICs), but high electricity costs and export-oriented project designs raise concerns about economic viability and equity. We evaluate the role of grid-connected hydrogen electrolyzers in Kenya using a multinodal capacity expansion model with county-level spatial resolution. By acting as flexible demand, electrolyzers reduce renewable curtailment, enable greater wind integration, and lower system-wide electricity costs. Across representative scenarios, electrolyzer deployment reduces levelized cost of electricity by more than 17% and yields over $135 million in cumulative system cost savings by 2050 while producing hydrogen that is at least as cost-competitive as standalone projects. Spatial results reveal concentrated infrastructure investment, highlighting the need for equity-oriented planning. We find that coordinated planning of electrolyzers, wind, and transmission is critical for achieving both cost reductions and low-carbon hydrogen. These results suggest that grid-integrated hydrogen, when embedded in power system planning, can support certification, reduce electricity costs, and generate broader domestic economic benefits. In this sense, grid-connected electrolyzers can enable green hydrogen not only in Kenya, but for Kenya.