An integrated framework of open-source tools for designing and evaluating green hydrogen production opportunities – Paper.
Extensive scaling of green hydrogen to meet net-zero targets would need the integration of suitable resources, high renewable energy potential and achievement of supporting techno- conomic parameters to establish viable hydrogen projects.
Herein, we propose a comprehensive four-tier framework based on specially designed open-source tools that build upon existing knowledge by providing (i) zoning filters to identify potential green hydrogen hubs, (ii) Multi-Criteria Analysis to compare and rank the selected sites, (iii) a production cost tool that allows analysis of 24 different electrolyzer – powerplant design scenarios and (iv) a python based algorithm that establishes the capacity mixes of electrolyzer, powerplant and battery energy storage system required to achieve cost or operational capacity factor targets.
The framework is then applied to Australia, where 41 potential sites are used as a case study for comparing their green hydrogen generation potential and costs, benchmarked against international targets of $2 kg−1.
Green hydrogen (H2) generated via renewables-driven electrolysis is increasingly emerging as a key driver for deep-rooted decarbonization, especially in energy-intensive and hard-to-abate sectors where direct electrification is challenging e.g., the chemical industry (e.g. methanol, ammonia production etc.) and generation of synthetic fuels for use in aviation or shipping1,2,3.
However, for green hydrogen to become a scalable and viable energy carrier or chemical feedstock (for both export and domestic utilization) there is the need to achieve economic parity with the more established fossil-fuel-based hydrogen production pathways (i.e. Steam Methane Reforming-SMR and Coal Gasification), and the energy sector more generally.
Key opportunities for cost reductions include decreasing renewable electricity pricing and electrolyzer costs, optimizing financing costs (linked to technology and market risks), finding the right market fit (i.e. end use and location for best resources to assist hydrogen generation) as well as optimizing overall system configurations including capacity utilization4,5,6.
Currently renewable energy generation costs, particularly of wind and solar, continue to fall with technical progress and achievement of economies of scale, leading them to already becoming the lowest cost sources of new electricity provision in many locations7,8.
Similarly, electrolyzers despite still being in their earlier stages of commerical deployment, are also undergoing a rapid cost reduction with technology development and manufacturing scale-up, with further reductions expected as the green hydrogen sector grows9,10.
Combined both these factors are expected to drastically reduce the cost of generating green H2, and some predictions have it reaching the same costs as fossil fuel-sourced H2 by as early as 2030, especially in regions with abundant high-quality renewables and favourable financing environments10,11.
In the meantime, generally, while the cost of technology remain high, any viable investment into renewables-driven green hydrogen production will require supportive policies, premium pricing and, also, the most efficient utilization of low-cost renewables and what are still capital-intensive electrolyzers.
One key challenge for an efficient and direct integration of electrolyzer and low-cost renewable power generation through solar PV and wind, is their highly variable and somewhat unpredictable nature which restricts the electrolyzer operation to follow the local wind and/or solar power generation patterns12.
Enforcing an economic penalty associated with leaving these capital-intensive electrolyzers sitting idle or operating at limited power for large portions of the year when renewable energy resources are scarce, resulting in lower capacity factors, limited capital efficiency and higher Levelized Costs of Hydrogen (LCH2).
In addition to the economic advantage, high-capacity factor operation of the electrolyzers is also important for the utilization of H2, especially for conversion into ammonia or methanol etc. as these conversion processes are currently designed for fairly steady state operation and thus require a stable supply of H213,14.
Integrating them with highly variable electrolyzer operation would then require the inclusion of high volumes of intermediate H2 storage, which is generally costly to build and suffers from safety concerns15. Therefore, the optimization of electrolyzer capacity factors is a key research and industry challenge for improving green hydrogen economics.
Yet, the advantages of high electrolyzer capacity factor operation must, however, be weighed against the costs of the renewable generation it draws up. This aspect becomes more prominent and critical when considering actual project design as several configurations of electrolyzer and powerplants can be realized each with its own advantages and disadvantages.
Several studies have explored the use of local and wind profiles to simulate H2 generation and optimise the capacity factor of the powerplants16,17, which suggest oversizing the solar/wind powerplants to the capacity of the electrolyzer, inclusion of hybrid designs with combined solar and wind powerplants18,19,20, intermediate storage through Battery Energy Storage Systems (BESS)21 or Pumped Hydro Energy Storage (PHES) to achieve higher capacity factor operations.
However, these studies reveal a trade-off between the high upfront capital investment required to develop these configurations and the ultimate benefit of the increased capacity factor.
Therefore, currently, developing stand-alone projects is the most prominent industrial strategy as it allows the electrolyzer to be integrated to dedicated solar/wind farms in regions of excellent wind and/or solar resources (specially sized for optimized capacity factors), water availability, low-cost natural hydrogen storage (e.g. salt caverns) and high land availability, as well as other relevant infrastructure including ports for export, natural gas pipelines for hydrogen injection or local hydrogen demand, e.g., for ammonia generation or decarbonization of local industries (e.g. clean electricity generation, for mobility (fuel cell vehicles) and green steel making etc.).
Alternatively, complex project designs involve isolated systems with fully dispatchable generation, where low cost but variable renewable power is supplemented with multiple energy sources or generally high cost yet more reliable power sources (particularly from fossil fuels) to achieve higher capacity factors while trading-off electricity costs to avoid high LCH216.
One such strategy involves contracting electrolyzers with one or more renewable projects through Power Purchase Agreements (PPAs), while such contracts vary markedly by jurisdiction and involve complexities around regional pricing differences, they typically provide a measure of electricity price assurance if electrolyzer operation is matched to the aggregated contracted renewable generation.
Therefore, electrolyzers can operate through time-matched consumption with available renewable generation contacted through PPAs and thus represent the ‘best case’ assured green electricity supply at low cost.
Our previous work has studied this in detail and shows that an efficiently volumed electricity supply through a renewable PPA can lead to very high-capacity factors at lower LCH2s16.
Moreover, there is no obligation that the contracted PPA capacity matches the electrolyzer capacity, thus if their supply exceeds the electrolyzer rating at times and the excess electricity can be sold on to the grid for additional income22, or potentially stored e.g., via onsite battery storage to further enhance their capacity factors21, or to operate downstream systems (compressors, etc.).
Alternatively, such PPAs can be negotiated to use excess otherwise curtailed renewable generation through the grid, effectively offering zero cost energy supply, but this could still lead to low capacity factors as curtailed energy volumes are also variable and time restricted12,23.
Therefore a fossil fuel-complemented grid connection could be preferred as it would permit electrolyzer operation to leverage a stable energy supply above the varying level of contracted renewables.
While this would increase electrolyzer operational capacity factor, additional costs of grid connection along with potential issues of network constraints and risk of variable spot pricing as well as environmental concerns of relying on fossil-fuel generation (associated emissions with green H2) would have to be considered.
Collectively, these prior studies provide valuable strategies to improve capital utilization and reduce the costs of renewable-driven electrolysis. However, the applicability of these strategies is highly context specific due to varying local renewable energy potential, available resources (especially water), and infrastructure (end users and transmission/transport networks).
Moreover, in practice as suggested above, there is a wide set of options available to project proponents for integrating renewable supply with an electrolyzer through possible mixes of renewable generation (i.e., battery storage (BESS) inclusion, grid connection or a hybrid combination of solar and wind) and oversizing these with respect to electrolyzer capacity.
Thus, there is a clear need for an overarching framework, which provides a systematic approach to evaluate underlying factors that affect the suitability of a given location for developing green electrolyzer projects, and the range of configuration options available.
To the best of our knowledge a number of tools including the H2A analysis tools developed by the US Department of Energy24,25, the AusH2/Hydrogen Economic Fairways Tool (HEFT) developed by the Australian Government26, the Global H2 Cost Tool developed by the University of Cologne27 and others28, are available that intend to assist developers in assessing potential H2 generation projects.
Each with its own functions and competencies, but a critical overview reveals that these have widely differing scopes, open-source capabilities, and underlying assumptions (refer to Supplementary Note 1 and Supplementary Data 1), which leads to inconsistencies for their application.
To address these limitations, we propose a framework that builds upon the existing strategies and tools, implemented via integrated open-source tools that has been designed for a comprehensive spatial and temporal technoeconomic analysis of renewable-powered electrolysis opportunities.
The framework has the following competencies: (i) zoning filters that provide guidance for selecting potential project sites, (ii) a Multi Criteria Analysis (MCA) for a comparative and competitive analysis of each sites to shortlist the sites based on their suitability to host H2 generation hub, (iii) an open source cost tool that assesses project economic viability by (iv) modelling local H2 generation potential (over various time resolutions) based on the solar and wind traces in any given location over a year or more, (v) allowing the user to explore a wide variety of renewables—electrolyzer configurations (standalone or grid connected, either solar or wind powered or hybrid combinations with different levels of oversizing and with optional inclusion of BESS storage), while (vi) providing complete control to the user to define/explore various costs (including capital cost of equipment and installation/land, influence of economies of scale, etc. and operating parameters including electrolyzer load ranges, efficiency variations vs load, degradation, etc.), as well as (vii) a python code based algorithm that evaluates benchmark value capacity mixes and cost parameters needed to achieve low LCH2 or high capacity factor operation.
In this manner, our framework is designed to provide a user an integrated ‘first pass’ for a convenient and comprehensive assessment of different renewable-powered H2 generation opportunities.
Herein, we apply the framework to Australia, which is one of the world’s fastest-growing renewable energy markets and a key early player in green H2 progress.
A potential that is already globally acknowledged29, and certainly recognized by the Australian Government, which has set a stretch target to bring the cost of generating hydrogen below A$2 kg−1 (US$1.4 kg−1)30 and is actively advancing policy, building trade relations and providing, and attracting investment into green H2 projects31.
These projects are intended to serve the emerging hydrogen markets in the Asia Pacific region and beyond, especially Germany, Japan and Korea which are exploring opportunities to import Australian-generated H232,33,34,35. Given this, achieving economic viability for green hydrogen projects in Australia could play a key role in the development of a global H2 supply chain.
Therefore, Australia provides an ideal case study to demonstrate our framework, as we compare 41 potential hydrogen production sites across Australia, evaluate their costs and benchmark them against the Australian target of A$2 kg−1 (US$1.4 kg−1).
An integrated framework of open-source tools for designing and evaluating green hydrogen production opportunities, December 6, 2022
