Understanding the techno-economics of hydrogen energy

Future Fuels CRC CEO David Norman believes that the future holds a few keys to overcoming corrosion problems. Image supplied by Future Fuels CRC.

Research is creating the depth of new knowledge needed to take hydrogen fuel into the mainstream, according to Future Fuels CRC Chief Executive Officer David Norman.

Our recent research shows how the economics of producing and moving hydrogen are evolving, enabling projects to move towards wider commercialisation based on better economic knowledge.

Producing hydrogen

The Universities of Adelaide, Melbourne and Queensland have worked together on a detailed technical and economic assessment of hydrogen production processes.

They assessed 22 production methods from water electrolysis and biomass processing, to natural gas and coal with carbon capture and storage (CCS).

These included processes such as steam methane reforming, autothermal reforming and coal gasification all combined with CCS.

Two variations of methane pyrolysis were also examined, where importantly carbon is transformed into a solid byproduct, rather than gaseous carbon dioxide.

They looked at every opportunity for low emission hydrogen production, modelling how feedstocks, capital and operational costs could be combined into a quantitative economic comparison.

Over half of water electrolysis’s total costs are from the electricity used, so driving cost reductions there would create major improvements in overall cost.

For biomass processing, only electricity prices and the capital cost of the processing plants had a notable impact on the overall cost of hydrogen, which is where proponents need to focus their development work.

For natural gas the modelling showed that autothermal reforming with CCS offers the current lowest potential costs but was heavily reliant on the cost of the natural gas feedstock.

Production that uses fossil fuel feedstocks requires CCS to reduce emissions, for which energy penalties, capital and operating costs were included. For biomass pathways, the cost of adding CCS to yield negative emissions was also investigated as a significant potential extra benefit.

Purifying the final hydrogen fuel was an important cost across all technologies, indicating that end-uses with a tolerance for lower-purity hydrogen could access supplies at a lower cost.

The researchers considered hydrogen carriers including ammonia, methanol and liquid hydrogen, to search for the most economic pathways for future development.

The modelling found ammonia was the most cost-effective carrier on a mass basis. That cost doesn’t include conversion back to hydrogen later.

Hydrogen or electricity?

The widespread adoption of hydrogen produced from green electricity raises a fundamental question, is it more cost-effective to transport “green” hydrogen molecules, or transport “green” electricity around Australia?

The University of Melbourne has delivered  a first-of-its-kind mathematical framework for finding the optimal plan of electricity and hydrogen transmission and storage infrastructure.

The team of researchers have demonstrated the capabilities of this framework with two case studies; a single transmission corridor case study that assesses supply capacity, corridor length and storage requirements and then a larger, more complex proof-of-concept case study that considers all the renewable energy zones proposed in the Australian Energy Market Operator’s 2022 Integrated System Plan.

That case study also considers hydrogen export ports and how depleted gas fields for underground hydrogen storage (UHS) could play a crucial role in buffering the variability of renewable energy sources.

This modelling considers high voltage direct current (HVDC), high voltage alternating current, reactive power plants, battery energy storage systems (BESS), and hydrogen pipelines and compressors, but also incorporates all the essential nonlinearities that influence infrastructure decisions.

Their findings suggest for hydrogen volumes modelled at port locations:

For steady-state throughputs, hydrogen pipelines are more cost effective than their electricity counterparts.

In cases where more than two hours of storage duration are required, hydrogen pipelines are more cost effective than their electricity counterparts over most distances and capacities.

In cases where only one hour of storage is required, the optimal transmission and storage infrastructure is heavily influenced by the cost of BESS relative to the cost of electrolysers.

For export projects, linepack storage’s role is very important, as the RES supply is variable and the hydrogen export demand is constant.

Investing in UHS in the form of depleted gas fields in specific locations in Australia can significantly decrease the total investment costs of transport and storage infrastructure as the marginal cost of underground storage is much lower than that of a pipeline.

This research helps to lay the groundwork for Australia’s full-scale hydrogen industry, by understanding how to make the optimum infrastructure investment.

For more information, visit futurefuelscrc.com.

This article featured in the March edition of The Australian Pipeliner. 

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