Policy & Socio-Economics
China and Italy’s Energy Development Trajectories: Current Landscapes and Future Cooperation Potential
Feb 2024
Publication
In order to achieve the ambitious goal of “carbon neutrality” countries around the world are striving to develop clean energy. Against this background this paper takes China and Italy as representatives of developing and developed countries to summarize the energy structure composition and development overview of the two countries. The paper analyzes the serious challenges facing the future energy development of both countries and investigates the possibilities of energy cooperation between the two countries taking into account their respective advantages in energy development. By comparing the policies issued by the two governments to encourage clean energy development this paper analyzes the severe challenges faced by the two countries’ energy development in the future and combines their respective energy development advantages to look forward to the possibility of energy cooperation between the two countries in the future. This lays the foundation for China and Italy to build an “Energy Road” after the “Silk Road”.
Levelised Cost of Hydrogen Production in Northern Africa and Europe in 2050: A Monte Carlo Simulation for Germany, Norway, Spain, Algeria, Morocco, and Egypt
May 2024
Publication
The production of green hydrogen through electrolysis utilizing renewable energies is recognized as a pivotal element in the pursuit of decarbonization. In order to attain cost competitiveness for green hydrogen reasonable generation costs are imperative. To identify cost-effective import partners for Germany given its limited green hydrogen production capabilities this study undertakes an exhaustive techno-economic analysis to determine the potential Levelized Cost of Hydrogen in Germany Norway Spain Algeria Morocco and Egypt for the year 2050 which represents a critical milestone in European decarbonization efforts. Employing a stochastic approach with Monte Carlo simulations the paper marks a significant contribution for projecting future cost ranges acknowledging the multitude of uncertainties inherent in related cost parameters and emphasizing the importance of randomness in these assessments. Country-specific Weighted Average Cost of Capital are calculated in order to create a refined understanding of political and economic influences on cost formation rather than using a uniform value across all investigated nations. Key findings reveal that among the evaluated nations PV-based hydrogen emerges as the most cost-efficient alternative in all countries except Norway with Spain presenting the lowest Levelized Cost of Hydrogen at 1.66 €/kg to 3.12 €/kg followed by Algeria (1.72 €/kg to 3.23 €/kg) and Morocco (1.73 €/kg to 3.28 €/kg). Consequently for economically favorable import options Germany is advised to prioritize PV-based hydrogen imports from these countries. Additionally hydrogen derived from onshore wind in Norway (2.24 €/kg to 3.73 €/kg) offers a feasible import alternative. To ensure supply chain diversity and reduce dependency on a single source a mixed import strategy is advisable. Despite having the lowest electricity cost Egypt shows the highest Levelized Cost of Hydrogen primarily due to a significant Weighted Average Cost of Capital.
Advancing the Affordable and Clean Energy in Large Energy-consuming Economies: The Role of Green Transition, Complexity-based, and Geostrategy Policy
Aug 2023
Publication
With decreasing costs of the clean technologies the balanced scales of the Sustainable Development Goal 7 targets e.g. energy equity (EE) energy security (ES) and environmental sustainability (EVS) are quickly changing. This fundamental balancing process is a key requirement for a net-zero future. Accordingly this research analyzes the regime-switching effect of Hydrogen economy as the green transition sharing economy and economic complexity as the complexity-based and geopolitical risks and energy prices as the geostrategy policies on the Goal 7 targets. To this end a Markov-switching panel vector autoregressive method with regime-heteroskedasticity is applied to study advancing the Goal 7 in the world's twenty-five large energy consumers during 2004–2020. Concerning the parameters and statistics of the model the results refer to the existence of two regimes associated with the Goal 7 corners called “upward and downward” regimes for EE and “slightly upward and sharply upward” regimes for ES and EVS. It is revealed that the vulnerability of EE and ES targets is considerably reduced when the regime switches to the dominant regime that is “downward” and “slightly upward” regimes respectively and that of the EVS target remains unaffected. Through the impulse-response analysis the findings denote that the first hypothesis of the efficiency of the Hydrogen economy in promoting the Goal 7 targets is insignificant. However the significant short-term and dynamic shock effects of the complexity-based and geostrategy policies on the Hydrogen economy are detected which will be a feasible alternative assessment in advancing the Goal 7. Further the complexity-based policies support the Goal 7 targets under different regimes especially in the short- and medium-term. Hence the second hypothesis regarding the effectiveness of the complexity-based policies in promoting Goal 7 targets is confirmed. The third hypothesis concerning the complexity of the impact of geostrategy policies on the Goal 7 targets is verified. Particularly the switching process towards the Goal 7 may not necessarily be restricted by the geopolitical risks. Moreover EE is supported through energy prices in the short-term under both regimes while they are non-conductive to promote ES and EVS through time. Accordingly the decision-makers should acknowledge adopting a regime-switching path forward for ensuring the time-varying balanced growth of the Goal 7 targets as the impact of the suggested policy instruments is asymmetric.
Optimal Decarbonisation Pathways for the Italian Energy System: Modelling a Long-term Energy Transition to Achieve Zero Emission by 2050
May 2024
Publication
The goal of achieving a zero-emission energy system by 2050 requires accurate energy planning to minimise the overall cost of the energy transition. Long-term energy models based on cost-optimal solutions are extremely dependent on the cost forecasts of different technologies. However such forecasts are inherently uncertain. The aim of the present work is to identify a cost-optimal pathway for the Italian energy system decarbonisation and assess how renewable cost scenarios can affect the optimal solution. The analysis has been carried out with the H2RES model a single-objective optimisation algorithm based on Linear Programming. Different cost scenarios for photovoltaics on-shore and off-shore wind power and lithium-ion batteries are simulated. Results indicate that a 100% renewable energy system in Italy is technically feasible. Power-to-X technologies are crucial for balancing purposes enabling a share of non-dispatchable generation higher than 90%. Renewable cost scenarios affect the energy mix however both on-shore and off-shore wind saturate the maximum capacity potential in almost all scenarios. Cost forecasts for lithium-ion batteries have a significant impact on their optimal capacity and the role of hydrogen. Indeed as battery costs rise fuel cells emerge as the main solution for balancing services. This study emphasises the importance of conducting cost sensitivity analyses in long-term energy planning. Such analyses can help to determine how changes in cost forecasts may affect the optimal strategies for decarbonising national energy systems.
Environmental Life-cycle Analysis of Hydrogen Technology in the United States
Oct 2024
Publication
Hydrogen is a zero-carbon energy carrier with potential to decarbonize industrial and transportation sectors but its life-cycle greenhouse gas (GHG) emissions depend on its energy supply chain and carbon management measures (e.g. carbon capture and storage). Global support for clean hydrogen production and use has recently intensified. In the United States Congress passed several laws that incentivize the production and use of renewable and low-carbon hydrogen such as the Bipartisan Infrastructure Law (BIL) in 2021 and the Inflation Reduction Act (IRA) in 2022 which provides tax credits of up to $3/kg depending on the carbon intensity of the produced hydrogen. A comprehensive life-cycle accounting of GHG emissions associated with hydrogen production is needed to determine the carbon intensity of hydrogen throughout its value chain. In the United States Argonne’s R&D GREET® (Greenhouse Gases Regulated emissions and Energy use in Technologies) model has been widely used for hydrogen carbon intensity calculations. This paper describes the major hydrogen technology pathways considered in the United States and provides data sources and carbon intensity results for each of the hydrogen production and delivery pathways using consistent system boundaries and most recent technology performance and supply chain data.
Great Britain's Hydrogen Infrastructure Development - Investment Priorities and Locational Flexibility
Aug 2024
Publication
Future pathways for Great Britain’s energy system decarbonization have highlighted the importance of lowcarbon hydrogen as an energy carrier and demand flexibility support. However the potential application within various sectors (heating industry transport) and production capacity through different technologies (methane reformation with carbon capture biomass gasification electrolysis) is highly varying introducing substantial uncertainties for hydrogen infrastructure development. This study sets out infrastructure priorities and identifies locational flexibility for hydrogen supply and demand options. Advances on limitations of previous research are made by developing an open-source model of the hydrogen system of Great Britain based on three Net Zero scenarios set out by National Grid in their Future Energy Scenarios in high temporal and spatial resolution. The model comprehensively covers demand sectors and supply options in addition to extending the locational considerations of the Future Energy Scenarios. This study recommends prioritizing the establishment of green hydrogen hubs in the near-term aligning with demands for synthetic fuels production industry and power which can facilitate the subsequent roll out of up to 10GW of hydrogen production capacity by 2050. The analysis quantifies a high proportion of hydrogen supply and demand which can be located flexibly.
Modelling the Innovation-decision Process for Hydrogen Homes: An Integrated Model of Consumer Acceptance and Adoption Intention
Nov 2024
Publication
As the global energy transition progresses a range of drivers and barriers will continue to shape consumer attitudes and behavioural intentions towards emerging low-carbon technologies. The innovation-decision process for technologies composing the residential sector such as hydrogen-fuelled heating and cooking appliances is inherently governed by the complex interplay between perceptual cognitive and emotional factors. In response this study responds to the call for an integrated research perspective to advance theoretical and empirical insights on consumer engagement in the domestic hydrogen transition. Drawing on online survey data collected in the United Kingdom where a policy decision on ‘hydrogen homes’ is set for 2026 this study systematically explores whether an integrated modelling approach supports higher levels of explanatory and predictive power. Leveraging the foundations of the unified theory of domestic hydrogen acceptance the analysis suggests that production perceptions public trust perceived relative advantage safety perceptions knowledge and awareness and positive emotions will shape consumer support for hydrogen homes. Conversely perceived disruptive impacts perceived socio-economic costs financial perceptions and negative emotions may impede the domestic hydrogen transition. Consumer acceptance stands to significantly shape deployment prospects for hydrogen boilers and hobs which are perceived to be somewhat advantageous to natural gas appliances from a technological and safety perspective. The study attests to the predictive benefits of adopting an integrated theoretical perspective when modelling the early stages of the innovation-decision process while acknowledging opportunities for leveraging innovative research approaches in the future. As national hydrogen economies gain traction adopting a neuroscience-based approach may help deepen scientific understanding regarding the neural psychological and emotional signatures shaping consumer perspectives towards hydrogen homes.
What will be the Hydrogen and Power Demands of the Process Industry in a Climate-neutral Germany?
Apr 2024
Publication
The defossilization of industry has far-reaching implications regarding the future demand for hydrogen and other forms of energy. This paper presents and applies a fundamental bottom-up model that relies on techno-economic data of industrial production processes. Its aim is to identify across a range of scenarios the most cost-effective low-carbon options considering a variety of production systems. Subsequently it derives the hydrogen and electricity demand that would result from the implementation of these least-cost low-carbon options in process industries in Germany. Aligning with the German government's target year for achieving climate neutrality this study’s reference year is 2045. The primary contribution lies in analyzing which hydrogen-based and direct electrification solutions would be cost-effective for a range of energy price levels under climate-neutral industrial production and what the resulting hydrogen and electricity demand would be. To this end the methodology of this paper comprises the following steps: selection of the relevant industries (I) definition of conventional reference production systems and their low-carbon options (II) investigation and processing of the techno-economic data of the standardized production systems (III) establishment of a scenario framework (IV) determination of the least-cost low-carbon solution of a conventional reference production system under the scenario assumptions made (V) and estimation of the resulting hydrogen and electricity demand (VI). According to the results the expected industrial hydrogen consumption in 2045 ranges from 255 TWh for higher hydrogen prices in or above the range of onshore wind-based green hydrogen supply costs to up to 542 TWh for very low hydrogen prices corresponding to typical blue hydrogen production costs. Meanwhile the direct electricity consumption of the process industries in the results ranges from 122 TWh for these rather low hydrogen prices to 368 TWh for the higher hydrogen prices in the region of or above the hydrogen supply costs from the electrolysis of energy from an onshore wind farm. Most of the break-even hydrogen prices that are relevant to the choice of low-carbon options are in the range of the benchmark purchase costs for blue hydrogen and green hydrogen produced from offshore wind power which span between €40 per MWh and €97 per MWh.
Assessment of the Economic Viability, Environmental, and Social Impacts of Green Hydrogen Production: An Algerian Case Study
Aug 2024
Publication
The impacts of climate change are real and in many parts of the world testify to its harsh reality including rampant extreme weather events droughts heat wildfires and flooding which have recorded in places which have not experienced them in recent memory. In the quest to avert such events there is a growing awareness and demand for sustainable processes and operations. Today sustainability encompasses a balance between ecological footprint and human development index taking into consideration economics the green environment safety quality ethics diversity and inclusion (D&I) and communities. This article presents some steps that have been taken by Algeria to balance energetic autonomy and sustainable development and a case study on green hydrogen production employing membrane processes. Algeria’s objective to join the global fight against climate change is to develop its green hydrogen base. Given its resources including available solar and wind power seawater desalination plants building capacity and its favorable location it is developing its green hydrogen economy to supply hydrogen especially to Europe. This presents an opportunity for other developing nations especially in Africa to gain from this experience.
Uncovering an Emerging Policy Direction for Australian Energy and Future Fuels Using a "Participatory Decision-Making" Framework
Aug 2024
Publication
Introduction: An online deliberative engagement process was undertaken with members of the general public to understand what they value or would like to change about the energy system within the broader context of decarbonizing Australia's energy networks identifying a role for future fuels (hydrogen and biogas). Citizens developed a set of principles that could guide Australia's path toward a low-carbon energy future reflecting on expectations they place upon energy transition. Next citizens' principles were shared with policy-makers in government and policy-influencers from the energy industry using an online interactive workshop.<br/>Methods: This study analyses policy-makers and -influencers response to citizens' guiding principles using the 'diamond of participatory decision-making' framework for analysis. Convergence and divergence in diverse complex and rich views across cohorts and implications thereupon energy policy were identified.<br/>Results: Although considerable alignment between multi-stakeholders' views was noted key areas of divergence or what is called the “groan zone” were easily identified in relation to social and environmental justice issues. This groan zone highlights the struggles that energy policy-makers face -the need to listen and respond to citizens' voices vs. the need for practical and workable policies that also support overarching government or industry objectives.<br/>Discussion: Policy making when the views of different stakeholders align is relatively straightforward. However this is not the case where the expectations diverge. More creative measures will be needed to address divergent views and expectations whilst maintaining procedural fairness in this case using democratic deliberative engagement processes. While the use of deliberative processes is gaining momentum worldwide particularly concerning climate change and energy transition policies this paper also highlights the benefits of conducting a robust post facto analysis of the content of the processes. Areas of alignment where policy can be made and implemented relatively easily without contention are identified. Other areas (such as making electrification mandatory) might be more complex or have unwanted negative social and environmental justice effects. Overall this paper bridges an analytical gap between “expectation studies” and participatory research. By borrowing terminology from a participatory research framework we sharpen the concepts in “expectation studies” from a consensus inclusion and diversity standpoint.
Diverse Decarbonization Pathways under Near Cost-optimal Futures
Sep 2024
Publication
Energy system optimization models offer insights into energy and emissions futures through least-cost optimization. However real-world energy systems often deviate from deterministic scenarios necessitating rigorous uncertainty exploration in macro-energy system modeling. This study uses modeling techniques to generate diverse near cost-optimal net-zero CO2 pathways for the United States’ energy system. Our findings reveal consistent trends across these pathways including rapid expansion of solar and wind power generation substantial petroleum use reductions near elimination of coal combustion and increased end-use electrification. We also observe varying deployment levels for natural gas hydrogen direct air capture of CO2 and synthetic fuels. Notably carbon-captured coal and synthetic fuels exhibit high adoption rates but only in select decarbonization pathways. By analyzing technology adoption correlations we uncover interconnected technologies. These results demonstrate that diverse pathways for decarbonization exist at comparable system-level costs and provide insights into technology portfolios that enable near cost-optimal net-zero CO2 futures.
Carbon Neutrality in Malaysia and Kuala Lumpur: Insights from Stakeholder-driven Integrated Assessment Modelling
Apr 2024
Publication
Introduction: Several cities in Malaysia have established plans to reduce their CO2 emissions in addition to Malaysia submitting a Nationally Determined Contribution to reduce its carbon intensity (against GDP) by 45% in 2030 compared to 2005. Meeting these emissions reduction goals will require ajoint effort between governments industries and corporations at different scales and across sectors.<br/>Methods: In collaboration with national and sub-national stakeholders we developed and used a global integrated assessment model to explore emissions mitigation pathways in Malaysia and Kuala Lumpur. Guided by current climate action plans we created a suite of scenarios to reflect uncertainties in policy ambition level of adoption and implementation for reaching carbon neutrality. Through iterative engagement with all parties we refined the scenarios and focus of the analysis to best meet the stakeholders’ needs.<br/>Results: We found that Malaysia can reduce its carbon intensity and reach carbon neutrality by 2050 and that action in Kuala Lumpur can play a significant role. Decarbonization of the power sector paired with extensive electrification energy efficiency improvements in buildings transportation and industry and the use of advanced technologies such as hydrogen and carbon capture and storage will be Major drivers to mitigate emissions with carbon dioxide removal strategies being key to eliminate residual emissions.<br/>Discussion: Our results suggest a hopeful future for Malaysia’s ability to meet its climate goals recognizing that there may be technological social and financial challenges along the way. This study highlights the participatory process in which stakeholders contributed to the development of the model and guided the analysis as well as insights into Malaysia’s decarbonization potential and the role of multilevel governance.
Fuel Cell Technology in the European Union - Status Report on Technology Development, Trends, Vlue Chains & Markets
Jan 2024
Publication
This report is an output of the Clean Energy Technology Observatory (CETO). CETO's objective is to provide an evidence-based analysis feeding the policy making process and hence increasing the effectiveness of R&I policies for clean energy technologies and solutions. It monitors EU research and innovation activities on clean energy technologies needed for the delivery of the European Green Deal; and assesses the competitiveness of the EU clean energy sector and its positioning in the global energy market. CETO is being implemented by the Joint Research Centre for DG Research and Innovation in coordination with DG Energy.
Shifting to Low-carbon Hydrogen Production Supports Job Creation but Does Not Gurantee a Just Transition
Nov 2024
Publication
Transitioning from carbon-intensive steam methane reforming to low-carbon hydrogen production is essential for decarbonizing the European industrial sector. However the employment impact of such a transition remains unclear. Here we estimate the effects using a transition pathways optimization model and industrial survey data. The results show that an electrolysis-based hydrogen sector transition would create 40000 jobs in the hydrogen sector by 2050. However these jobs are not equally distributed with Western Europe hosting the largest share (40%) and 20% of current hydrogen-producing regions experiencing net job decreases. Even after accounting for renewable energy jobs created by electrolysis-driven electricity demand growth the 2050 low-carbon hydrogen workforce would provide only 10% of the jobs currently offered by European fossil fuel production. Numerous uncertainties and regional development inequities suggest the need for sector-diversified workforce transition plans and training programs to foster skills suited to multiple low-carbon opportunities.
Pieces of a Jigsaw: Opportunities and Challenges in the Nascent Australian Hydrogen Mobility Market
Mar 2023
Publication
Mobility has been a prominent target for proponents of the hydrogen economy. Given the complexities involved in the mobility value chain actors hoping to participate in this nascent market must overcome a range of challenges relating to the availability of vehicles the co-procurement of supporting infrastructure a favourable regulatory environment and a supportive community among others. In this paper we present a state-of-play account of the nascent hydrogen mobility market in Victoria Australia drawing on data from a workshop (N ¼ 15) and follow-up interviews (n ¼ 10). We interpret findings through a socio-technical framework to understand the ways in which fuel cell electric vehicles (FCEVs)dand hydrogen technologies more generallydare conceptualised by different stakeholder groups and how these conceptualisations mediate engagement in this unfolding market. Findings reveal prevailing efforts to make sense of the FCEV market during a period of considerable institutional ambiguity. Discourses embed particular worldviews of FCEV technologies themselves in addition to the envisioned roles the resultant products and services will play in broader environmental and energy transition narratives. Efforts to bring together stakeholders representing different areas of the FCEV market should be seen as important enablers of success for market participants.
The Current Status of Hydrogen Energy: An Overview
Sep 2023
Publication
Hydrogen is the most environmentally friendly and cleanest fuel that has the potential to supply most of the world's energy in the future replacing the present fossil fuel-based energy infrastructure. Hydrogen is expected to solve the problem of energy shortages in the near future especially in complex geographical areas (hills arid plateaus etc.) and harsh climates (desert ice etc.). Thus in this report we present a current status of achievable hydrogen fuel based on various scopes including production methods storage and transportation techniques the global market and the future outlook. Its objectives include analyzing the effectiveness of various hydrogen generation processes and their effects on the economy society and environment. These techniques are contrasted in terms of their effects on the environment manufacturing costs energy use and energy efficiency. In addition hydrogen energy market trends over the next decade are also discussed. According to numerous encouraging recent advancements in the field this review offers an overview of hydrogen as the ideal renewable energy for the future society its production methods the most recent storage technologies and transportation strategies which suggest a potential breakthrough towards a hydrogen economy. All these changes show that this is really a profound revolution in the development process of human society and has been assessed as having the same significance as the previous industrial revolution.
Future Hydrogen Economies Imply Environmental Trade-offs and a Supply-demand Mismatch
Aug 2024
Publication
Hydrogen will play a key role in decarbonizing economies. Here we quantify the costs and environmental impacts of possible large-scale hydrogen economies using four prospective hydrogen demand scenarios for 2050 ranging from 111–614 megatonne H2 year−1 . Our findings confirm that renewable (solar photovoltaic and wind) electrolytic hydrogen production generates at least 50–90% fewer greenhouse gas emissions than fossil-fuel-based counterparts without carbon capture and storage. However electrolytic hydrogen production could still result in considerable environmental burdens which requires reassessing the concept of green hydrogen. Our global analysis highlights a few salient points: (i) a mismatch between economical hydrogen production and hydrogen demand across continents seems likely; (ii) regionspecific limitations are inevitable since possibly more than 60% of large hydrogen production potentials are concentrated in water-scarce regions; and (iii) upscaling electrolytic hydrogen production could be limited by renewable power generation and natural resource potentials.
Innovations in Clean Energy Technologies: A Comprehensive Exploration of Research at the Clean Energy Technologies Research Institute, University of Regina
Nov 2024
Publication
The Clean Energy Technology Research Institute (CETRI) at the University of Regina Canada serves as a collaborative hub where a dynamic team of researchers industry leaders innovators and educators come together to tackle the urgent challenges of climate change and the advancement of clean energy technologies. Specializing in low-carbon and carbon-free clean energy research CETRI adopts a unique approach that encompasses feasibility studies bench-scale and pilot-plant testing and pre-commercial demonstrations all consolidated under one roof. This holistic model distinguishes CETRI fostering a diverse and inclusive environment for technical scientific and hands-on learning experiences. With a CAD 3.3 million pre-commercial carbon capture demonstration plant capable of capturing 1 tonne of CO2 per day and a feed-flexible hydrogen demonstration pilot plant producing 6 kg of hydrogen daily CETRI emerges as a pivotal force in advancing innovative reliable and cost-competitive clean energy solutions essential for a safe prolific and sustainable world. This paper provides a comprehensive overview of the diverse and impactful research carried out in the center spanning various areas including decarbonization zeroemission hydrogen technologies carbon (CO2 ) capture utilization and storage the conversion of waste into renewable fuels and chemicals and emerging technologies such as small modular nuclear reactors and microgrids.
Energy Asset Stranding in Resource-rich Developing Countries and the Just Transition - A Framework to Push Research Frontiers
Jun 2024
Publication
Climate policy will inevitably lead to the stranding of fossil energy assets such as production and transport assets for coal oil and natural gas. Resourcerich developing countries are particularly aected as they have a higher risk of asset stranding due to strong fossil dependencies and wider societal consequences beyond revenue disruption. However there is only little academic and political awareness of the challenge to manage the asset stranding in these countries as research on transition risk like asset stranding is still in its infancy. We provide a research framework to identify wider societal consequences of fossil asset stranding. We apply it to a case study of Nigeria. Analyzing dierent policy measures we argue that compensation payments come with implementation challenges. Instead of one policy alone to address asset stranding a problem-oriented mix of policies is needed. Renewable hydrogen and just energy transition partnerships can be a contribution to economic development and SDGs. However they can only unfold their potential if fair benefit sharing and an improvement to the typical institutional problems in resource-rich countries such as the lack of rule of law are achieved. We conclude with presenting a future research agenda for the global community and acade
Economy of Scale for Green Hydrogen-derived Fuel Production in Nepal
Apr 2024
Publication
Opportunity for future green hydrogen development in Nepal comes with enduse infrastructural challenges. The heavy reliance of industries on fossil fuels (63.4%) despite the abundance of hydroelectricity poses an additional challenge to the green transition of Nepal. The presented work aims to study the possibility of storing and utilizing spilled hydroelectricity due to runoff rivers as a compatible alternative to imported petroleum fuels. This is achieved by converting green hydrogen from water electrolysis and carbon dioxide from carbon capture of hard-to-abate industries into synthetic methane for heating applications via the Sabatier process. An economy-of-scale study was conducted to identify the optimal scale for the reference case (Industries in Makwanpur District Nepal) for establishing the Synthetic Natural Gas (SNG) production industry. The technoeconomic assessment was carried out for pilot scale and reference scale production unit individually. Uncertainty and sensitivity analyses were performed to study the project profitability and the sensitivity of the parameters influencing the feasibility of the production plant. The reference scale for the production of Synthetic Natural Gas was determined to be 40 Tons Per Day (TPD) with a total capital investment of around 72.15 Million USD. Electricity was identified as the most sensitive parameter affecting the levelized cost of production (LCOP). The 40 TPD plant was found to be price competitive to LPG when electricity price is subsidized below 3.55 NPR/unit (2.7 c/unit) from 12 NPR/unit (9.2 c/unit). In the case of the 2 TPD plant for it to be profitable the price of electricity must be subsidized to well below 2 NPR/kWh. The study concludes that the possibility of SNG production in Nepal is profitable and price-competitive at large scales and at the same time limited by the low round efficiency due to conversion losses. Additionally it was observed that highly favorable conditions driven by government policies would be required for the pilot-scale SNG project to be feasible.
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