The goal in Europe and the U.S. to begin a significant, historic switch from carbon-intensive fossil-based fuels to green hydrogen made from water and renewable energy will happen sooner than most believe, said three experts working to make it happen: as early as 2025.
That is when they believe green hydrogen producers equipped with the right technology should be able to offer the carbon-free gas at prices as low as $1.50/kg, five years before the Biden administration’s slightly lower goal of $1/kg by the end of this decade.
The right technology would be state-of-the art polymer electrolyte membrane (PEM) electrolyzers, using dedicated renewable power produced at $20/MWh and operating only when the sun or wind is available — not relying on costly battery storage to back up the system, nor interacting with a local grid system. In most cases, battery backup would add more costs than could be recouped, at least at this point.
“It’s going to enable green hydrogen to compete effectively in the marketplace by taking advantage of low-cost solar and wind” and declining costs of PEM electrolyzers, Stephen Szymanski, U.S. marketing representative for Nel Hydrogen of Norway, explained during a webinar Tuesday.
Nel is a major global producer of hydrogen and manufactures both PEM electrolyzers and solid oxide electrolyzers. Szymanski said PEM electrolyzers are more tolerant of variable power, which is why they would work better in the scenarios under consideration.
Szymanski has been working with Mahesh Morjaria, an engineer with California-headquartered Terabase Energy, a maker of sophisticated software and other control systems for solar plants; and Parikhit Sinha, a scientist with Arizona-based First Solar, which makes ultra-efficient PV panels.
The three appeared in a webinar produced by pv magazine to explain the sophisticated modeling they developed to take into account the amount and cost of solar-produced electricity available at any particular location; the cost of PEM electrolyzers; the cost of grid power and whether it is green enough to consider using; and the cost of in-house battery storage for locations where grid power is too carbon-intensive or where there is no grid power available.
Utility-scale solar projects are already offering extremely competitive power prices, Szymanski said, low enough to make hydrogen in electrolyzers that is competitive with hydrogen made through steam reforming, which today produces 99% of the 70 million tons of hydrogen used every year by U.S. industry. Steam reforming also produces carbon dioxide when the methane (CH4) molecule is cracked, and currently that CO2 is usually allowed to escape into the atmosphere.
“When you look at some of the commitments that have been already made for developing electrolysis plants around the world, even if only about 50% of the market share went to electrolyzers, each of these sectors could contribute more than 2,000 GW of potential” power for electrolyzers, Szymanski said.
“The thing that is really driving the commercial viability of green hydrogen is the cost of wind and solar dropping significantly. Roughly 70 to 80% of the production costs of hydrogen through electrolysis is the cost of the electricity feedstock,” he explained.
Sinha said the modeling looked at a number of scenarios in an effort to figure out whether combining battery storage, stored hydrogen or relying on net-metered grid power to create a hybrid around-the-clock production plant would be more cost effective than operating an electrolyzer system with only intermittent solar and wind power.
“You need the technical components that you’re combining to be flexible in order to integrate them, and fortunately, in the case of solar, you have a great deal of scalability; whether you want a very small to very large system, you can just add more components, and similarly with PEM electrolysis, you can add more stacks and get the size you want. You can pretty much determine whatever scale of hydrogen production you want,” he said.
The ultimate objective of the modeling system is to figure out the “levelized cost” of the hydrogen production system under consideration, explained Morjaria.
“How do you configure an [electrolyzer] plant in a manner that you can get the most optimal levelized cost of hydrogen? The size of the PV plant [and] the size of the [electrolyzer] plant have to be determined based upon the electricity that will be generated from the solar PV plant, as well as whether this is an off-grid system or a grid-connected system,” he said.
“If it’s off-grid, then essentially the solar PV is going to provide most of the energy that is being utilized by the electrolyzers, whereas if it’s grid-connected, then there is a [different] potential” and the potential to make the hydrogen less green.
“But the bottom line is that when you model, you can actually figure out an optimal point. Because there are tradeoffs between the capacity of the electrolyzers versus the capacity of the PV plant and the cost associated with individual components. Typically, the electrolyzer has a fixed cost, which is as we add capacity of the electrolyzers, it increases. [But] it also results in decreasing energy costs because now we are basically using the PV plant more effectively, and you will see some examples of that as well. So, we developed this real-time simulator.
“The important point that I want to emphasize is that to make it competitive, green hydrogen does not necessarily mean that you must run the electrolyzers 100% of the time. In fact, if the electricity costs and especially with PEM electrolyzers, which are flexible, it may even pencil in even when they are not completely 100% utilized.”
As if that were not complicated enough, the trio are also developing scenarios that take into account the shifting amount of solar energy at different locations where PV solar and PEM electrolyzers might be paired to produce green hydrogen.