Policy & Socio-Economics
A Brief on Nano-Based Hydrogen Energy Transition
Sep 2023
Publication
Considering the clean renewable and ecologically friendly characteristics of hydrogen gas as well as its high energy density hydrogen energy is thought to be the most potent contender to locally replace fossil fuels. The creation of a sustainable energy system is currently one of the critical industrial challenges and electrocatalytic hydrogen evolution associated with appropriate safe storage techniques are key strategies to implement systems based on hydrogen technologies. The recent progress made possible through nanotechnology incorporation either in terms of innovative methods of hydrogen storage or production methods is a guarantee of future breakthroughs in energy sustainability. This manuscript addresses concisely and originally the importance of including nanotechnology in both green electroproduction of hydrogen and hydrogen storage in solid media. This work is mainly focused on these issues and eventually intends to change beliefs that hydrogen technologies are being imposed only for reasons of sustainability and not for the intrinsic value of the technology itself. Moreover nanophysics and nano-engineering have the potential to significantly change the paradigm of conventional hydrogen technologies.
Towards Green Hydrogen? - A Comparison of German and African Visions and Expectations in the Context of the H2Atlas-Africa Project
Sep 2023
Publication
Green hydrogen promises to be critical in achieving a sustainable and renewable energy transition. As green hydrogen is produced with renewables green hydrogen could become an energy storage medium of the future and even substitute the current unsustainable grey or blue hydrogen used in the industry. Bringing this transition into reality for instance in Germany there are visions to rapidly build hydrogen facilities in Africa and export the produced green hydrogen to Europe. One problem however is that these visions presumably conflict with the visions of actors within Africa. Therefore this study aims to provide an initial assessment of African stakeholders’ visions for future energy exports and renewable energy expectations. By comparing visions from Germany and Africa this assessment was conducted to identify differences in green energy and hydrogen visions that could lead to conflict and similarities that could be the basis for cooperation. The National Hydrogen Strategy outlines the German visions which clarifies that Germany will have to import green hydrogen to meet its green transition target. In this context of future energy export demand a partnership between German and African researchers on assessing green hydrogen potentials in Africa started. The African visions were explored by surveying the partners from different African countries working on the project. The results revealed that while both sides see the need for an immediate transition to renewable energy the African side is not envisioning the immediate export of green hydrogen. Based on the responses the partners are primarily concerned with improving the continent’s still deficient energy access for both the population and industry. Nevertheless this African perspective greatly emphasises cross-border cooperation where both sides can realise their visions. In the case of Germany that German investment could build infrastructure which would benefit the receiving African country or countries and open up the possibility for the envisioned green hydrogen export to Europe.
Modern Hydrogen Technologies in the Face of Climate Change—Analysis of Strategy and Development in Polish Conditions
Aug 2023
Publication
The energy production market based on hydrogen technologies is an innovative solution that will allow the industry to achieve climate neutrality in the future in Poland and in the world. The paper presents the idea of using hydrogen as a modern energy carrier and devices that in cooperation with renewable energy sources produce the so-called green hydrogen and the applicable legal acts that allow for the implementation of the new technology were analyzed. Energy transformation is inevitable and according to reports on good practices in European Union countries hydrogen and the hydrogen value chain (production transport and transmission storage use in transport and energy) have wide potential. Thanks to joint projects and subsidies from the EU initiatives supporting hydrogen technologies are created such as hydrogen clusters and hydrogen valleys and EU and national strategic programs set the main goals. Poland is one of the leaders in hydrogen production both in the world and in Europe. Domestic tycoons from the energy refining and chemical industries are involved in the projects. Eight hydrogen valleys that have recently been created in Poland successfully implement the assumptions of the “Polish Hydrogen Strategy until 2030 with a perspective until 2040” and “Energy Policy of Poland until 2040” which are in line with the assumptions of the most important legal acts of the EU including the European Union’s energy and climate policy the Green Deal and the Fit for 55 Package. The review of the analysis of the development of hydrogen technologies in Poland shows that Poland does not differ from other European countries. As part of the assumptions of the European Hydrogen Strategy and the trend related to the management of energy surpluses electrolyzers with a capacity of at least 6 GW will be installed in Poland in 2020–2024. It is also assumed that in the next phase planned for 2025–2030 hydrogen will be a carrier in the energy system in Poland. Poland as a member of the EU is the creator of documents that take into account the assumptions of the European Union Commission and systematically implement the assumed goals. The strategy of activities supporting the development of hydrogen technologies in Poland and the value chain includes very extensive activities related to among others obtaining hydrogen using hydrogen in transport energy and industry developing human resources for the new economy supporting the activities of hydrogen valley stakeholders building hydrogen refueling stations and cooperation among Poland Slovakia and the Czech Republic as part of the HydrogenEagle project.
The Impact of Country-specific Investment Risks on the Levelised Costs of Green Hydrogen Production
Jun 2024
Publication
Green hydrogen is central to the global energy transition. This paper introduces a renewable hydrogen production system model that optimizes hydrogen production on a worldwide 50 km × 50 km grid considering country-specific investment risks. Besides the renewable energy’s impact on the hydrogen production system (HPS) design we analyze the effect of country-specific interest rates on the levelized cost of hydrogen (LCOH) production. Over one-third (40.0%) of all cells have an installed solar PV capacity share between 50% and 70% 76.4% have a hybrid (onshore wind and solar PV) configuration. Hydrogen storage is deployed rather than battery storage to balance hydrogen production via electrolysis and hydrogen demand. Hybrid HPSs can significantly reduce the LCOH production compared to non-hybrid designs whereas country-specific interest rates can lead to significant increases diminishing the relative competitiveness of countries with abundant renewable energy resources compared to countries with fewer resources but fewer investment risks.
Green Hydrogen Production and Its Land Tenure Consequences in Africa: An Interpretive Review
Sep 2023
Publication
Globally a green hydrogen economy rush is underway and many companies investors governments and environmentalists consider it as an energy source that could foster the global energy transition. The enormous potential for hydrogen production for domestic use and export places Africa in the spotlight in the green hydrogen economy discourse. This discourse remains unsettled regarding how natural resources such as land and water can be sustainably utilized for such a resource-intensive project and what implications this would have. This review argues that green hydrogen production (GHP) in Africa has consequences where land resources (and their associated natural resources) are concerned. It discusses the current trends in GHP in Africa and the possibilities for reducing any potential pressures it may put on land and other resource use on the continent. The approach of the review is interpretive and hinges on answering three questions concerning the what why and how of GHP and its land consequences in Africa. The review is based on 41 studies identified from Google Scholar and sources identified via snowballed recommendations from experts. The GHP implications identified relate to land and water use mining-related land stress and environmental ecological and land-related socioeconomic consequences. The paper concludes that GHP may not foster the global energy transition as is being opined by many renewable energy enthusiasts but rather could help foster this transition as part of a greener energy mix. It notes that African countries that have the potential for GHP require the institutionalization of or a change in their existing approaches to land-related energy governance systems in order to achieve success.
Impact of International Transportation Chains on Cost of Green E-hydrogen: Global Cost of Hydrogen and Consequences for Germany and Finland
Jun 2023
Publication
Widely available and low-cost solar photovoltaics and wind power can enable production of renewable electricity-based hydrogen at many locations throughout the world. Hydrogen is expected to emerge as an important energy carrier constituting some of the final energy demand; however its most important role will be as feedstock for further processing to e-fuels e-chemicals and e-steel. Apart from meeting their own hydrogen demand countries may have opportunities to export hydrogen to countries with area limitations or higher production costs. This paper assesses the feasibility of e-hydrogen imports to Germany and Finland from two case regions with a high availability of low-cost renewable electricity Chile and Morocco in comparison to domestic supply. Special attention is paid to the transport infrastructure which has a crucial impact on the economic viability of imports via two routes shipping and pipelines. This study has found that despite lower e-hydrogen production costs in Morocco and Chile compared to Germany and Finland additional transportation costs make imports of e-hydrogen economically unattractive. In early 2020s imported fuel costs are 39–79% and 34–100% higher than e-hydrogen produced in Germany and Finland respectively. In 2050 imported e-hydrogen is projected to be 39–70% more expensive than locally produced e-hydrogen in Germany and 43–54% in the case of Finland. e-Hydrogen may become a fuel that is mostly produced domestically and may be feasible for imports only in specific locations. Local e-hydrogen production may also lower dependence on imports enhance energy security and add jobs.
Towards a Unified Theory of Domestic Hydrogen Acceptance: An Integrative, Comparative Review
Dec 2023
Publication
Hydrogen energy technologies are envisioned to play a critical supporting role in global decarbonisation. While low-carbon hydrogen is primarily targeted for reducing industrial emissions alongside decarbonising parts of the transport sector environmental benefits could also be achieved in the residential context. Presently gasdependent countries such as Japan and the United Kingdom are assessing the feasibility of deploying hydrogen home appliances as part of their national energy strategies. However prospects for the transition will hinge on consumer acceptance alongside an array of other socio-technical factors. To support potential ambitions for large-scale and sustained technology diffusion this study advances a Unified Theory of Domestic Hydrogen Acceptance. Through an integrative comparative literature review targeting hydrogen and domestic energy studies the paper proposes a novel Domestic Hydrogen Acceptance Model (DHAM) which accounts for the cognitive and emotional dimensions of human perceptions. Through this dual interplay the proposed framework can increase the predictive power of hydrogen acceptance models.
An Overview of Challenges for the Future of Hydrogen
Oct 2023
Publication
Hydrogen’s wide availability and versatile production methods establish it as a primary green energy source driving substantial interest among the public industry and governments due to its future fuel potential. Notable investment is directed toward hydrogen research and material innovation for transmission storage fuel cells and sensors. Ensuring safe and dependable hydrogen facilities is paramount given the challenges in accident control. Addressing material compatibility issues within hydrogen systems remains a critical focus. Challenges roadmaps and scenarios steer long-term planning and technology outlooks. Strategic visions align actions and policies encompassing societal and ecological dimensions. The confluence of hydrogen’s promise with material progress holds the prospect of reshaping our energy landscape sustainably. Forming collective future perspectives to foresee this emerging technology’s potential benefits is valuable. Our review article comprehensively explores the forthcoming challenges in hydrogen technology. We extensively examine the challenges and opportunities associated with hydrogen production incorporating CO2 capture technology. Furthermore the interaction of materials and composites with hydrogen particularly in the context of hydrogen transmission pipeline and infrastructure are discussed to understand the interplay between materials and hydrogen dynamics. Additionally the exploration extends to the embrittlement phenomena during storage and transmission coupled with a comprehensive examination of the advancements and hurdles intrinsic to hydrogen fuel cells. Finally our exploration encompasses addressing hydrogen safety from an industrial perspective. By illuminating these dimensions our article provides a panoramic view of the evolving hydrogen landscape.
Global Hydrogen Review 2023
Sep 2023
Publication
The Global Hydrogen Review is an annual publication by the International Energy Agency that tracks hydrogen production and demand worldwide as well as progress in critical areas such as infrastructure development trade policy regulation investments and innovation. The report is an output of the Clean Energy Ministerial Hydrogen Initiative and is intended to inform energy sector stakeholders on the status and future prospects of hydrogen while also informing discussions at the Hydrogen Energy Ministerial Meeting organised by Japan. Focusing on hydrogen’s potentially major role in meeting international energy and climate goals the Review aims to help decision makers fine-tune strategies to attract investment and facilitate deployment of hydrogen technologies at the same time as creating demand for hydrogen and hydrogen-based fuels. It compares real-world developments with the stated ambitions of government and industry. This year’s report includes a focus on demand creation for low-emission hydrogen. Global hydrogen use is increasing but demand remains so far concentrated in traditional uses in refining and the chemical industry and mostly met by hydrogen produced from unabated fossil fuels. To meet climate ambitions there is an urgent need to switch hydrogen use in existing applications to low-emission hydrogen and to expand use to new applications in heavy industry or long-distance transport.
Identifying Social Aspect Related to the Hydrogen Economy: Review, Synthesis, and Research Perspectives
Oct 2023
Publication
Energy transition will reshape the power sector and hydrogen is a key energy carrier that could contribute to energy security. The inclusion of sustainability criteria is crucial for the adequate design/deployment of resilient hydrogen networks. While cost and environmental metrics are commonly included in hydrogen models social aspects are rarely considered. This paper aims to identify the social criteria related to the hydrogen economy by using a systematic hybrid literature review. The main contribution is the identification of twelve social aspects which are described ranked and discussed. “Accessibility” “Information” “H2 markets” and “Acceptability” are now emerging as the main themes of hydrogen-related social research. Identified gaps are e.g. lack of the definition of the value of H2 for society insufficient research for “socio-political” aspects (e.g. geopolitics wellbeing) scarce application of social lifecycle assessment and the low amount of works with a focus on social practices and cultural issues.
Impacts of Green Hydrogen for Steel, Ammonia, and Long-distance Transport on the Cost of Meeting Electricity, Heat, Cold, and Hydrogen Demand in 145 Countries Running on 100% Wind-water-solar
May 2023
Publication
As the world moves to clean renewable energy questions arise as to how best to produce and use hydrogen. Here we propose using hydrogen produced only by electrolysis with clean renewable electricity (green hydrogen). We then test the impact of producing such hydrogen intermittently versus continuously for steel and ammonia manufacturing and long-distance transport via fuel cells on the cost of matching electricity heat cold and hydrogen demand with supply and storage on grids worldwide. An estimated 79 32 and 91 Tg-H2/y of green hydrogen are needed in 2050 among 145 countries for steel ammonia and long-distance transport respectively. Producing and compressing such hydrogen for these processes may consume ~12.1% of the energy needed for end-use sectors in these countries after they transition to 100% wind-water-solar (WWS) in all such sectors. This is less than the energy needed for fossil fuels to power the same processes. Due to the variability of WWS electricity producing green hydrogen intermittently rather than continuously thus with electrolyzer use factors significantly below unity (0.2–0.65) may reduce overall energy costs with 100% WWS. This result is subject to model uncertainties but appears robust. In sum grid operators should incorporate intermittent green hydrogen production and use in planning.
Hydrogen Towards Sustainable Transition: A Review of Production, Economic, Environmental Impact and Scaling Factors
Sep 2023
Publication
Currently meeting the global energy demand is largely dependent on fossil fuels such as natural gas coal and oil. Fossil fuels represent a danger to the Earth’s environment and its biological systems. The utilisation of these fuels results in a rise in atmospheric CO2 levels which in turn triggers global warming and adverse changes in the climate. Furthermore these represent finite energy resources that will eventually deplete. There is a pressing need to identify and harness renewable energy sources as a replacement for fossil fuels in the near future. This shift is expected to have a minimal environmental impact and would contribute to ensuring energy security. Hydrogen is considered a highly desirable fuel option with the potential to substitute depleting hydrocarbon resources. This concise review explores diverse methods of renewable hydrogen production with a primary focus on solar wind geothermal and mainly water-splitting techniques such as electrolysis thermolysis photolysis and biomass-related processes. It addresses their limitations and key challenges hampering the global hydrogen economy’s growth including clean value chain creation storage transportation production costs standards and investment risks. The study concludes with research recommendations to enhance production efficiencies and policy suggestions for governments to mitigate investment risks while scaling up the hydrogen economy.
Price Promises, Trust Deficits and Energy Justice: Public Perceptions of Hydrogen Homes
Oct 2023
Publication
In an era characterised by political instability economic uncertainty and mounting environmental pressures hydrogen fuel is being positioned as a critical piece of the global energy security and clean energy agenda. The policy push is noteworthy in the United Kingdom where the government is targeting industrial decarbonisation via hydrogen while exploring a potential role for hydrogen-fuelled home appliances. Despite the imperative to secure social acceptance for accelerating the diffusion of low-carbon energy technologies public perceptions of hydrogen homes remain largely underexplored by the researcher community. In response this analysis draws on extensive focus group data to understand the multi-dimensional nature of social acceptance in the context of the domestic hydrogen transition. Through an integrated mixed-methods multigroup analysis the study demonstrates that socio-political and market acceptance are strongly interlinked owing to a trust deficit in the government and energy industry coupled to underlying dissatisfaction with energy markets. At the community level hydrogen homes are perceived as a potentially positive mechanism for industrial regeneration and local economic development. Households consider short-term disruptive impacts to be tolerable provided temporary disconnection from the gas grid does not exceed three days. However to strengthen social acceptance clearer communication is needed regarding the spatial dynamics and equity implications of the transition. The analysis concludes that existing trust deficits will need to be overcome which entails fulfilling not only a ‘price promise’ on the cost of hydrogen appliances but also enacting a ‘price pledge’ on energy bills. These deliverables are fundamental to securing social acceptance for hydrogen homes.
Policy Design for Diffusing Hydrogen Economy and Its Impact on the Japanese Economy for Carbon Neutrality by 2050: Analysis Using the E3ME-FTT Model
Nov 2023
Publication
To achieve carbon neutrality in Japan by 2050 renewable energy needs to be used as the main energy source. Based on the constraints of various renewable energies the importance of hydrogen cannot be ignored. This study aimed to investigate the diffusion of hydrogen demand technologies in various sectors and used projections and assumptions to investigate the hydrogen supply side. By performing simulations with the E3ME-FTT model and comparing various policy scenarios with the reference scenario the economic and environmental impacts of the policy scenarios for hydrogen diffusion were analyzed. Moreover the impact of realizing carbon neutrality by 2050 on the Japanese economy was evaluated. Our results revealed that large-scale decarbonization via hydrogen diffusion is possible (90% decrease of CO2 emissions in 2050 compared to the reference) without the loss of economic activity. Additionally investments in new hydrogen-based and other low-carbon technologies in the power sector freight road transport and iron and steel industry can improve the gross domestic product (1.6% increase in 2050 compared to the reference) as they invoke economic activity and require additional employment (0.6% increase in 2050 compared to the reference). Most of the employment gains are related to decarbonizing the power sector and scaling up the hydrogen supply sector while a lot of job losses can be expected in the mining and fossil fuel industries.
Green Hydrogen Futures: Tensions of Energy and Justice Within Sociotechnical Imaginaries
May 2024
Publication
As a reformist approach to low-carbon transitions green hydrogen is often promoted as an easy replacement for fossil fuels. This substitution narrative makes this technology compelling as it offers to reduce emissions while continuing the contemporary energy system. Using ‘sociotechnical imaginaries’ this paper explores the underlying political processes on what appears to be a mostly technical vision of green hydrogen. Analysis through expert interviews in Aotearoa New Zealand revealed two contrasting energy visions one emphasizing the technical role of green hydrogen in New Zealand's transition—the green hydrogen imaginary and the other which advocated for a future motivated by social change—the alternative energy imaginary. Comparing the tensions through a lens of hydrogen justice exposed the assumptions and exclusions present in the emerging green hydrogen imaginary. This paper argues that the technocratic business as usual approach of green hydrogen depoliticizes the social nature of energy and thus risks perpetuating inequalities and harms present in the current energy system. However these critiques also suggest that there is hope for green hydrogen to be reimagined in more ethical and just ways.
Addressing Environmental Challenges: The Role of Hydrogen Technologies in a Sustainable Future
Dec 2023
Publication
Energy and environmental issues are of great importance in the present era. The transition to renewable energy sources necessitates technological political and behavioral transformations. Hydrogen is a promising solution and many countries are investing in the hydrogen economy. Global demand for hydrogen is expected to reach 120 million tonnes by 2024. The incorporation of hydrogen for efficient energy transport and storage and its integration into the transport sector are crucial measures. However to fully develop a hydrogen-based economy the sustainability and safety of hydrogen in all its applications must be ensured. This work describes and compares different technologies for hydrogen production storage and utilization (especially in fuel cell applications) with focus on the research activities under study at SaRAH group of the University of Naples Federico II. More precisely the focus is on the production of hydrogen from bio-alcohols and its storage in formate solutions produced from renewable sources such as biomass or carbon dioxide. In addition the use of materials inspired by nature including biowaste as feedstock to produce porous electrodes for fuel cell applications is presented. We hope that this review can be useful to stimulate more focused and fruitful research in this area and that it can open new avenues for the development of sustainable hydrogen technologies.
Potential Economic Benefits of Carbon Dioxide (CO2) Reduction Due to Renewable Energy and Electrolytic Hydrogen Fuel Deployment Under Current and Long Term Forecasting of the Social Carbon Cost (SCC)
May 2019
Publication
The 2016 Paris Agreement (UNFCCC Authors 2015) is the latest of initiative to create an international consensus on action to reduce GHG emissions. However the challenge of meeting its targets lies mainly in the intimate relationship between GHG emissions and energy production which in turn links to industry and economic growth. The Middle East and North African region (MENA) particularly those nations rich oil and gas (O&G) resources depend on these as a main income source. Persuading the region to cut down on O&G production or reduce its GHG emissions is hugely challenging as it is so vital to its economic strength. In this paper an alternative option is established by creating an economic link between GHG emissions measured as their CO2 equivalent (CO2e) and the earning of profits through the concept of Social Carbon Cost (SCC). The case study is a small coastal city in Libya where 6% of electricity is assumed to be generated from renewable sources. At times when renewable energy (RE) output exceeds the demand for power the surplus is used for powering the production of hydrogen by electrolysis thus storing the energy and creating an emission-free fuel. Two scenarios are tested based on short and long term SCCs. In the short term scenario the amount of fossil fuel energy saved matches the renewable energy produced which equates to the same amount of curtailed O&G production. The O&G-producing region can earn profits in two ways: (1) by cutting down CO2 emissions as a result of a reduction in O&G production and (2) by replacing an amount of fossil fuel with electrolytically-produced hydrogen which creates no CO2 emissions. In the short term scenario the value of SCC saved is nearly 39% and in the long term scenario this rose to 83%.
Assessment of a Fully Renewable System for the Total Decarbonization of the Economy with Full Demand Coverage on Islands Connected to a Central Grid: The Balearic Case in 2040
Jul 2023
Publication
The transition to clean electricity generation is a crucial focus for achieving the current objectives of economy decarbonization. The Balearic Archipelago faces significant environmental economic and social challenges in shifting from a predominantly fossil fuel-based economy to one based on renewable sources. This study proposes implementing a renewable energy mix and decarbonizing the economy of the Balearic Islands by 2040. The proposed system involves an entirely renewable generation system with interconnections between the four Balearic islands and the Spanish mainland grid via a 650 MW submarine cable. This flexible electrical exchange can cover approximately 35% of the peak demand of 1900 MW. The scenario comprises a 6 GWp solar photovoltaic system a wind system of under 1.2 GWp and a 600 MW biomass system as generation sub-systems. A vanadium redox flow battery sub-system with a storage capacity of approximately 21 GWh and 2.5 GWp power is available to ensure system manageability. This system’s levelized electricity cost (LCOE) is around 13.75 cEUR/kWh. The design also incorporates hydrogen as an alternative for difficult-to-electrify uses achieving effective decarbonization of all final energy uses. A production of slightly over 5 × 104 tH2 per year is required with 1.7 GW of electrolyzer power using excess electricity and water resources. The system enables a significant level of economy decarbonization although it requires substantial investments in both generation sources and storage.
Technoeconomic Analysis for Green Hydrogen in Terms of Production, Compression, Transportation and Storage Considering the Australian Perspective
Jul 2023
Publication
This current article discusses the technoeconomics (TE) of hydrogen generation transportation compression and storage in the Australian context. The TE analysis is important and a prerequisite for investment decisions. This study selected the Australian context due to its huge potential in green hydrogen but the modelling is applicable to other parts of the world adjusting the price of electricity and other utilities. The hydrogen generation using the most mature alkaline electrolysis (AEL) technique was selected in the current study. The results show that increasing temperature from 50 to 90 ◦C and decreasing pressure from 13 to 5 bar help improve electrolyser performance though pressure has a minor effect. The selected range for performance parameters was based on the fundamental behaviour of water electrolysers supported with literature. The levelised cost of hydrogen (LCH2 ) was calculated for generation compression transportation and storage. However the majority of the LCH2 was for generation which was calculated based on CAPEX OPEX capital recovery factor hydrogen production rate and capacity factor. The LCH2 in 2023 was calculated to be 9.6 USD/kgH2 using a base-case solar electricity price of 65–38 USD/MWh. This LCH2 is expected to decrease to 6.5 and 3.4 USD/kgH2 by 2030 and 2040 respectively. The current LCH2 using wind energy was calculated to be 1.9 USD/kgH2 lower than that of solar-based electricity. The LCH2 using standalone wind electricity was calculated to be USD 5.3 and USD 2.9 in 2030 and 2040 respectively. The LCH2 predicted using a solar and wind mix (SWM) was estimated to be USD 3.2 compared to USD 9.6 and USD 7.7 using standalone solar and wind. The LCH2 under the best case was predicted to be USD 3.9 and USD 2.1 compared to USD 6.5 and USD 3.4 under base-case solar PV in 2030 and 2040 respectively. The best case SWM offers 33% lower LCH2 in 2023 which leads to 37% 39% and 42% lower LCH2 in 2030 2040 and 2050 respectively. The current results are overpredicted especially compared with CSIRO Australia due to the higher assumption of the renewable electricity price. Currently over two-thirds of the cost for the LCH2 is due to the price of electricity (i.e. wind and solar). Modelling suggests an overall reduction in the capital cost of AEL plants by about 50% in the 2030s. Due to the lower capacity factor (effective energy generation over maximum output) of renewable energy especially for solar plants a combined wind- and solar-based electrolysis plant was recommended which can increase the capacity factor by at least 33%. Results also suggest that besides generation at least an additional 1.5 USD/kgH2 for compression transportation and storage is required.
Market-based Asset Valuation of Hydrogen Geological Storage
Jul 2023
Publication
Because of hydrogen's low energy density hydrogen storage is a critical component of the hydrogen economy particularly when large-scale and flexible hydrogen utilization is required. There is a sense of urgency to develop hydrogen geological storage projects to support large-scale yet flexible hydrogen utilization. This study aims to answer questions not yet resolved in the research literature discussing the valuation of hydrogen geological storage options for commercial development. This study establishes a net present value (NPV) evaluation framework for geological hydrogen storage that integrates the updated techno-economic analysis and market-based operations. The capital asset pricing model (CAPM) and the related finance theories are applied to determine the risk-adjusted discount rate in building the NPV evaluation framework. The NPV framework has been applied to two geological hydrogen storage projects a single-turn storage serving downstream transportation seasonal demand versus a multiturn storage as part of an integrated renewables-based hydrogen energy system providing peak electric load. From the NPV framework both projects have positive NPVs $46 560 632 and $12 457 546 respectively and International Rate of Return (IRR) values which are higher than the costs of capital. The NPV framework is also applied to the sensitivity analysis and shows that the hydrogen price spread between withdrawal and injection prices site development and well costs are the top three factors that impact both NPV and IRR the most for both projects. The established NPV framework can be used for project risk management by discovering the key cost drivers for the storage assets.
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