01 POWER ISLAND / 02 H2+NH3 / Royal Swiss 2024 Techno-Economic Analysis of Wind Power-to-Hydrogen

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diagram can serve as reference point when selecting appropriate electrolyzer capacities, which is explained in section 3.3.2.

The wind park’s total investment cost is projected to be similar to Lillgrund’s capital cost, given it is an installation of a similar size. Therefore, the construction cost, including installation and components, is estimated to be 0.18 billion euros [64]. To cover both fixed and variable costs, the wind park will rely on its sources of income, which will be generated from one of the two possible alternatives. The fixed and variable costs are listed in Table 12.

Table 12. Fixed and variable cost of the offshore wind [64][65].

3.3 Development of Power-to-X Park

3.3.1 Hydrogen Production Facility

A hypothetical large-scale hydrogen production facility will be connected to the offshore wind farm via electric cables and an AC/DC converter. In contrast to the wind farm, the hydrogen facility will be installed onshore at the Gävle harbor industrial port. The facility’s configuration includes among other things, auxiliary and main components, such as, PEM electrolyzer, compressor, and storage. Compared to the main components, the influence of auxiliary parts on achieving profitability is significantly smaller. Therefore, the auxiliary components will henceforth be collectively denoted as Balance of Plant (BoP), while the main ones will be discussed individually. Furthermore, the cost of all equipment, both variable and fixed, are expected to be covered by the hydrogen sales. This report will solely focus on sales of electricity (€/MWh) and hydrogen (€/kg), although it would be possible to generate income from selling the byproducts like heat as well under certain circumstances.

The hydrogen prices are based on the transport sector, where diesel is recognized as the competitive fuel. Based on research conducted by SWECO about hydrogen fuel to become competitive to diesel in terms of heavy trucks, the cost of green hydrogen should not exceed

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≤ 0.56 €/km. This is due to the research has estimated that heavy trucks consume approximately 0.08 kg H2/km. At a price of 0.56 €/km and a fuel consumption of 0.08 kg H2/km, hydrogen’s price is calculated to be 7 €/kg. Since SWECO has stated that the hydrogen price should not exceed 0.56 €/km in order for hydrogen to compete to diesel thesis [66], the hydrogen price will maximum cost 7 €/kg in this. Furthermore, the hydrogen price will start off at 3 €/kg for the purpose of investigate whether green hydrogen can become profitable at low prices. Thus, the price of the hydrogen in this report will be set to range 3–7 €/kg. The purpose is to analyze at which hydrogen price the facility becomes economic profitable, while also staying competitive to diesel. Lastly, the cost of realizing the PtH project is an estimation based on the costs of commercially available H2 components, real offshore wind farm, and literature.

3.3.2 Modelling A Power-to-Hydrogen Plant

Developing a hydrogen production facility that is connected to a wind farm, while also aiming to obtain a technical and financial optimized connection, is a challenging task to accomplish. This is due to limited access to the individual equipment’s operational data and the overall data performance of operating a wind power-to-hydrogen park. Technical parameters such as the electrolyzer’s real electricity use and the operational performance (e.g., operating temperature, thermal inertia etc.) of respective equipment at different conditions, must be taken into account, while simultaneously considering the investment and operational costs. Moreover, the spot prices’ volatility further complicates the process of forecasting the hydrogen production, which in turn makes it difficult to estimate in advance how much income is expected to be generated. Therefore, implementation of advanced mathematical models in an appropriate programming language, are necessary in order to accurately forecast the facility’s performance [81].

In this report, the performance of a general designed PtH plant will be evaluated based on data generated from MATLAB and Python codes. MATLAB will be used to generate the wind park’s operational data (power output), while Python will be used to compute the corresponding hydrogen production. On both occasions, nominal operation conditions are assumed. Thus, the obtained data performance of the PtH plant should be considered as an approximation.

The initial step of developing a Power-to-Hydrogen plant involves the coupling between the wind farm and electrolyzer. This makes the properties of electrolyzer a crucial factor to consider in order to make this coupling become dynamic compatible [67]. Therefore, selection of the electrolyzer’s capacity and technology, will be based on the following two factors: the wind farm’s power output (durability diagrams) and its dynamic electricity production profile (Figure 18), respectively. Based on the latter factor, the desired characteristic of an electrolyzer, is to have a flexible operation due to the wind farm’s fluctuating electricity production. In the former factor, the capacity of the electrolyzer, should be able to absorb the power production of the wind turbines. Furthermore, establishing a compatible coupling will not only yield in obtaining a working dynamic between these two components, but will also optimize the investment costs through selecting a suitable size for the electrolyzer. By selecting a suitable size for the electrolyzer, one can avoid choosing unsuitable dimensioning of the facility’s other main components, which sizes are derived from the electrolyzer’s capacity. Unsuitable dimensions mean that the facility’s main equipment are either overor under-dimensioned. This becomes an issue if the sizes of the equipment do not match the quantity of hydrogen produced. One example is when small hydrogen quantities are produced, and the facility’s equipment are over-dimensioned. This means that the size of these equipment are too large, thus becoming not cost-effective due to not being used to its full capacity. A contrary example would when large quantities of hydrogen are produced but the equipment’s capacities are too small (under-dimensioned). As a result, hydrogen becomes wasted.

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In this research, an optimal electrolyzer capacity [MW] (denoted as variable y) is a function of the wind farm’s power output [MW] (variable x) expressed as y(x)=x [67]. This is because the mission is to select a capacity [MW] for the electrolyzer which the wind farm is capable to produce. In this way, one can avoid choosing an electrolys capacity that is too large for the wind farm and instead select an electrolyzer capacity that is compatible with the power output of the wind farm. Therefore, durability diagrams (Fig. 19 21) of the wind farm’s power production for all target years were produced and used to select suitable electrolyzer capacity. These diagrams will not only provide information about the wind farm’s power outputs, but also show the duration of each power output. The duration of respective power output can then be used to estimate the number of operational hours that the electrolyze will have based on the selected capacity. This can be seen in in Figure 22, where the durability diagram of year 2021 (Fig. 21) is used as an example.

Figure 22. The process of selecting capacities (20 MW, 10 MW and 5 MW) for electrolyzer and obtaining the corresponding operational hours using durability diagram of the wind farm.

As seen in Figures 19 21 and 22, the durability curve decreases when going from low to high power outputs. This means that large power outputs (e.g., 20 MW) have lower durability compared to smaller power outputs (e.g., 5 MW). In this report, the durability is assumed to be equivalent to the number of annual operation hours an electrolyzer will have. This means that an electrolyzer with large capacities will have fewer annual operation hours, while electrolyzer with small capacities will have more annual operation hours, which is also seen in Figure 22. In this report, three different electrolyzer capacities (5 MW, 10 MW, and 20 MW) have been selected and are described in section 3.3.2.1. These three capacities were selected because a suitable electrolyzer size should be at or less than 20% of the wind park’s total capacity, where factors such as commercial availability and sufficient operation hours, are also considered. According to the durability diagrams in Figure 19–21, the annual operation hours of 5 MW is approximately <5500 h, <4600 h for 10 MW, and <3400 h for 20 MW, for all three target years. The process of obtaining these hours is also specified in Figure 22. However, these operation hours only serve as a starting point to estimate how many operation hours per year the respective capacity will have. It should be noted that these hours are not necessarily profitable hours to produce hydrogen, since external factors, such as spot prices, are not considered here. Moreover, in this report, hydrogen production will only take place when the power output of the wind farm is at least 100% of the electrolyzers’ nominal power. This means that the electrolyzers will only produce hydrogen when operating at full capacity, regardless of technically having a dynamic operation ranging at 20– 100% of its capacity [67].

Moreover, these capacities will be set to operate as independent cases; thus, three different hydrogen production facility sizes will be produced. The purpose is to compare the operational performance (volume of hydrogen produced) of these three selected capacities, and relate it to the investment cost, respectively. The objective is to identify and analyze the correlation between facility’s size and the capability of becoming profitable. The technical and economic differences of these hydrogen facilities are presented and discussed in section 3.3.2.5.

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3.3.2.1 Technical and Economic Description of Electrolyzer

All sizes of PEM electrolyzer are assumed to operate under similar conditions and will thus have similar water and power consumption, stack replacement hours, and lifespan [68]. The capital expenditure (CAPEX) is estimated to be 1.4 m€/MW [42]. The maintenance & operational cost (O&M) and stack replacement cost are approximately 3% and 30 50% of CAPEX, respectively [52]. This means that the O&M will cost 0.042 m€/MW per year and the stack replacement will cost between 0.42 0.7 m€/MW for every 9 years. Further, BoP (piping, electrical equipment, purification process, etc.) is evaluated to cost 50 [€/kW] and will be added to the CAPEX [42]. Moreover, the energy tax of the electrolyzer is reduced from 36 [€/MWh] to 0 [€/MWh] with the motivation that its utilization promotes sustainability [69]. Technical and economic parameters for each unit size are displayed in Table 13 and 14, respectively.

Table 13. Technical parameters for all PEM electrolyzers [68].

Table 14. Investment and BoP costs for all PEM electrolyzers [42].

3.3.2.2 Technical and Economic Description of Compressor

To ensure proper storage of hydrogen gas, it needs to be pre-compressed to a specific pressure level before it can be injected into an on-site storage system via a gathering pipeline. Therefore, the outlet pressure of the electrolyzer must equal the inlet pressure of the compressor. However, the outlet pressure of the compressor is dependent on the type of storage system employed [52]. In this study, a Type I vessel with an operational pressure of 200 bar is selected as the on-site storage system and is described in section 3.3.2.3. Thus, the outlet pressure of the compressor will be 200 bar. Moreover, the investment cost (CAPEX) for all compressor sizes can be calculated in relation to the applied shaft power, P [kW]. The Shaft power can be defined as the power needed to compress a certain amount of hydrogen to a specific pressure level. Therefore, shaft power can be calculated according to equation (12) [42].

Where Q is the hydrogen flow rate (kg/day), and the factor (24∙36001 ) convert days into seconds.

The compressor’s inlet and outlet pressure are denoted as Pin and Pout, respectively. In practice, the pressure is not constant but will vary. The inlet temperature (T) is 310.95 K, as only nominal condition is considered. Number of compressor stages (N) is assumed to be two, the ratio of specific heats is γ = 1.4, and η = 75% is the compressor efficiency (isentropic efficiency).

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The hydrogen compressibility factor is Z = 1.03198 and the molecular mass is MH2 = 2.016 g/mol. R is the universal constant of ideal gas, valued to be 8.314 J/molK. The compressor is assumed to operate with a 95% overall motor efficiency. Lastly, the National Research Council’s method is applied to compute the investment cost as it relates the calculated electrical load in equation (12) to CAPEX [m€] according to the equation (13) [42][47].

The specific technical parameters (regardless of compressor capacity) and capital cost for all compressor sizes are listed in Table 15 and 16. Moreover, the energy tax for electricity to the compressor is reduced from 36 [€/MWh] to 6 [€/MWh] as the compressor, similarly to the electrolyzer, contributes to promoting sustainability [69].

Table 15. Technical parameters for all compressor units [42][69].

Table 16. Investment cost for all compressor units for the year 2020 [69].

3.3.2.3 Technical and Economic Description of On-Site Storage

To select an appropriate storage tank, two important factors were considered: a minimum lifespan of 15 years and stationary application. Based on these two factors, both Type I and Type II tanks are suggested to be suitable. The Type II compared to Type I, is more expensive and has a longer life expectancy (25 years) [70] due to e.g., its physical properties being strengthened by outer wrapping [71]. However, the average lifespan of above-ground storage tanks is approximately 20 years [72], making Type I sufficient to implement. Additionally, storage of gaseous hydrogen is

one of most expensive components of a H2 production plant [73], giving an additional reason to select Type I over II. The technical and economic parameters for storage Type I, are listed in Table 17. Furthermore, the operational pressure is 200 bar [49], making it a suitable hydrogen reservoir to the HRS located in Gävle harbor, where the operating vehicles can refuel.

Next, the dimensioning of storage was based on two factors: average daily hydrogen production and the intermittent nature of wind energy. The average daily hydrogen produced from the facilities were calculated from the annual hydrogen production of respective facility at a target year. Thereafter, based on the average daily hydrogen production, the storage size was overdimensioned to be capable of storing a hydrogen production equivalent to seven days. The purpose was to compensate for hours of little to no hydrogen production.

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There are two primary reasons for limiting the capital cost to the previous mentioned components. Firstly, these components have a significantly higher capital cost that directly impact the facility's potential of becoming profitable. Therefore, the relatively lower CAPEX of other minor components becomes insignificant compared to the investment cost of the main components. Secondly, the lack of a well-established hydrogen infrastructure creates challenges in identifying and accurately estimating the costs of all components.

Table 19 presents the total capital cost of a hydrogen facility that includes a 5 MW electrolyzer. According to Table 40 42 in Appendix B, a 5 MW facility can annually produce between 420200 548700 kg H2, depending on the following factors: target year, spotand hydrogen prices. To select a suitable compressor capacity for such annual production, figures from Table 16, which includes a corresponding investment cost, were used. Based on Table 16, a compressor with a capacity ranging between 420200 710800 kg H2 is estimated to cost between 0.5 and 0.83 m€. Furthermore, the capacity and cost of HRS is determined using a similar approach in Table 18. The daily hydrogen production of the 5 MW facility is approximately between 1150 and 1502 kg. Thus, the HRS is estimated to cost between 2.5 and 4.73 m€. Moreover, the estimated storage cost is 500 €/kg, which applies to all three facility sizes.

Table 19. Total investment cost for PtH plant including 5 MW electrolyzer.

The calculation of capital cost for the 10 MW and 20 MW facilities in Table 20 21, follow the same approach as the calculation of 5 MW facility’s capital cost. According to the Table 43 45 and Table 46 48, the annual hydrogen production for the 10 MW facility ranges between 690000 and 916600 kg, while for the 20 MW facility, it is between 1020400 and 1347200 kg. This corresponds to an approximate daily hydrogen production of 1890–2513 kg and 2797 3688 kg, respectively. This data was then used to estimate the investment costs of the compressor, storage, and HRS.

Table 20. Total Investment Cost for PtH Plant Including 10 MW Electrolyzer.

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Table 23. Energy fee based on target year, average spot price, loss coefficient and risk factor [33][34].

Table 24. Electricity certificate for different years [74].

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