Techno-Economics of Green Hydrogen

Abstract

To comply with the Paris Agreement, the Dutch government has launched an energy transition process, with the goal of replacing coal and natural gas-based electricity with renewable sources. The intermittent nature of renewable electricity necessitates the installation of an energy storage system to balance supply and demand. Hydrogen is a potential energy storage and transport medium. However, its production is currently more expensive than natural gas, and storage and transport are energy-intensive due to its low density. Because the infrastructure necessary for the hydrogen supply chain necessitates significant capital investments, a techno-economic analysis of various techniques of hydrogen production, compression, storage, and transport is required.
The aim of this thesis was to evaluate the levelized costs of hydrogen at various phases of supply chain, from hydrogen production to utilization. In order to accomplish this task, a literature review was conducted to identify the most promising methods in hydrogen production, compression, storage and transport followed by developing mathematical models of various technologies. According to the literature review, water electrolysis using electrolyzers such as alkaline, polymer electrolyte membrane (PEM), and solid oxide was shown to be techno-economically feasible. The literature review also revealed that centrifugal and diaphragm compression, pipeline transmission, and salt cavern storage were all techno-economically feasible technologies. These technologies’ steady-state mathematical models were built for scaling and techno-economic analysis. In the end, learning curves were applied for electrolyzers to predict the cost reductions in future.
According to the results of mathematical modeling, hydrogen production contributes the most to total levelized costs of supply chain followed by overall compression costs. Moreover, capital costs of electrolyzer stack and electricity costs significantly influence the levelized costs of hydrogen production. For 1 MW electrolyzer capacity and average capital and operating costs of electrolyzer stack, alkaline electrolysis is currently the most cost-effective technique of producing hydrogen with levelized cost of hydrogen (LCOH) calculated to be 3.69 €/ kg, followed by solid oxide electrolysis (4.55 €/kg).However, the use of learning curves indicates that by 2050, solid oxide electrolysis may be the most cost-effective technique of producing hydrogen with projected levelized cost of 1.72 €/kg. The pipeline compression costs were found to be around 0.065 €/ kg whereas diaphragm compression costs were found to be in the range of 0.55 to 1.2 €/ kg depending on the outlet pressure. While hydrogen storage and transportation require substantial capital investment, their overall impact on levelized costs was found to be minimal compared to production and compression expenses, with storage costs averaging around 0.8 €/kg and transportation costs at approximately 0.0007 €/kg per kilometer. The same mathematical model was used to analyze two hydrogen utilization scenarios: fuel for fuel cell vehicles and feed for industry. Both pessimistic and optimistic cases were examined by varying cost-influencing parameters to predict the possible range of total levelized costs for the supply chain. The results showed that hydrogen as a fuel for fuel cell vehicles will stay more expensive than hydrogen as a feed for industry.