Can the Middle East open the door to affordable clean hydrogen?

Image: Ghadir Shaar

A report by the International Renewable Energy Agency (IRENA) has suggested affordable green hydrogen could already be obtainable, based on the record-breaking low prices for solar negotiated in the Middle East.

Solar electricity tariffs of $0.0157, $0.0135 and $0.0104 per kilowatt-hour agreed in Qatar, the United Arab Emirates and Saudi Arabia, respectively, in the last 18 months, would enable renewables-powered hydrogen to be produced for as little as $1.62 per kilogram, according to IRENA's Renewable Power Generation Costs in 2020 report.

The Abu Dhabi-based international body made its calculations – all of which are in U.S. dollars – based on the $0.0104 solar power tariff agreed in Saudi Arabia in April, with green hydrogen generation being modeled at the Dumat al Jandal site in the kingdom which boasts strong solar and wind power resources. With the site already hosting a wind farm, IRENA modeled a hydrogen plant which would also harness solar and be connected to the grid. The report suggested lack of a grid connection would raise the renewable hydrogen cost to $1.74/kg, which still compares favorably to the current $1.45-2.40/kg price of hydrogen production powered by natural gas and equipped with carbon capture and storage (CCS) tech.

Further extrapolating the costs, the study estimated a fall in hydrogen electrolyzer costs, from $750 per kilowatt of capacity to $350, would enable renewable hydrogen production for $1.16/kg. Raising electrolyzer efficiency to 72.5% and extending stack lifetime from 15 to 17.5 on top of that, IRENA said, could take green hydrogen below the prized $1/kg point.

With this year's renewables price report explaining how the three tariffs secured in the Middle East since January 2020 can be regarded as viable without any hidden caveats or subsidy, the authors of the study stated: “low-cost renewable hydrogen may already be in reach.”

The document fleshed out how up to 800 GW of coal-fired power generation capacity worldwide could already be replaced by newly-built renewable energy facilities as solar and wind prices have dipped under the cost of running legacy fossil fuel plants in many markets. That estimate included a $5/MWh cost of integrating renewables into the electric grid and IRENA said, with around 40% of that overpriced capacity – and 37% of actual generation – based in Bulgaria, Germany, India and the United States, decommissioning could save around $32 billion per year in energy costs. Making the switch would also eliminate three gigatons of carbon emissions – 20% of what IRENA estimates is needed to keep global heating to a maximum 1.5 degrees Celsius this century.

The data

The latest edition of the report is based on data from around 20,000 renewables generation facilities worldwide which account for 1.9 TW of generation capacity, and on clean energy auction prices and power purchase agreements which add up to 582 GW of capacity. All the figures in the study exclude any form of subsidy and the authors point out, adding CCS to the world's overpriced coal plants would merely drive up their costs further.

IRENA has estimated all of Bulgaria and Germany‘s coal plants will this year cost electricity bill payers more than new renewables facilities would, based on a European carbon emissions price of €50 per ton. Even without an emissions trading scheme in the U.S. and India, the picture is similar, with 77-91% of American coal plants and 87-91% of Indian facilities also overpriced.

That conclusion is based on an estimated levelized cost of energy (LCOE) for solar power in India this year of $0.033/kWh, down from $0.038 last year; and of $0.031 in the States this year, although the report's authors note the solar module price has picked up between 1% and 9% in the first quarter of this year, thanks to shortages of raw materials such as polysilicon.

With the global LCOE of solar having fallen 7% from 2019 to last year, from $0.061 to $0.057/kWh, India led the world for low-price PV last year, with an average LCOE of $0.038/kWh for utility scale generation, ahead of China, with $0.044, and Spain, with $0.046. The authors noted Turkey also rapidly reduced average solar tariffs, to $0.052 last year, and Australia posted an average $0.057.

That translated into average solar project development costs of $596 per kilowatt installed in India, the world's lowest figure and down 8% from Indian costs in 2019. Solar projects in Vietnam came in to $949/kW and were only $796/kW in Spain last year, the report added. At the other end of the scale, projects in Russia cost $1,889/kW and, in Japan, $1,832, with those two countries exceptional among the 19 markets studied as the cost differences between areas from Canada (at $1,275/kW) down to India, were more evenly distributed.

Auction results posted last year, for projects expected to be commissioned this year and next, prompted IRENA to estimate the global average solar power price will fall to $0.039/kWh this year before rising slightly to $0.04 next year, which would still be a 30% fall on this year's figure and 27% less than the LCOE to be expected from new-build coal plants. With the predictions based on 18.8 GW of renewables capacity expected this year and 26.7 GW due in 2022, the study estimated 74% of the clean energy facilities expected this year and next will be cheaper than new fossil fuel generation sites.

Cheaper

Renewables are already making real headway, of course, with IRENA calculating 45.5 GW of the solar added last year was among the 62% of the 162 GW of clean energy facilities which were installed more cheaply than new-build coal plants.

Digging into the solar statistics, the report said mainstream solar panel costs in December ranged from $0.19 to $0.40 per Watt, for an average price of $0.27, with thin-film products averaging $0.28/W.

Operations and maintenance costs came in at an average of $17.80/kW last year in OECD countries and $9 elsewhere, in a year which also saw non-panel, balance-of-system equipment costs account for 65% of total project expense.

For residential solar arrays, average system prices in the 19 markets studied by IRENA ranged from $658/kW in India to $4,236 in California, for LCOE figures from $0.055/kWh in India to $0.236 in the U.K. For commercial systems, India was again the cheapest place to invest last year, at an average $651/kW, but a business in California would have to find $2,974/kW. Those system costs translated into LCOE numbers ranging between $0.055 in India and $0.19 in Massachusetts.

This article originally appeared on pv-magazine-usa.com, and has been republished with permission by pv magazine (www.pv-magazine.com and www.pv-magazine-usa.com).

A rendering of the project to produce green hydrogen that Gransolar is planning for the Port of Almería.

Image: Gransolar

A company spokesperson told pv magazine that the plant will produce hydrogen from seawater and will be powered by a 30 MW solar plant and a 20 MWh storage system with an autonomy of 4 hours.

The facility will be based on double-reverse osmosis treatment with energy recovery followed by electrolysis of deionized water through proton exchange membrane (PEM). Furthermore, secondary electrolysis of concentrated brine will be implemented by cell membrane electrolysis.

The main electrolyzer at the facility will have an installed capacity of 20 MW and an estimated production of 1,000 tons per year. The produced fuel will be then stored in trucks for pressurized gas at 400 bar pressure.

Hydrogen will be used as fuel for public transport at the port and urban cleaning vehicles in the city of Almería. It will also be utilized to feed the port's unloading machinery, the national and international transport of goods, and part of the energy demand of local manufacturing industries.

The project has a required investment of €80.5 million euros and is scheduled to be built by the end of 2024. Gransolar confirms that it has the interest and commitment of the Almería City Council, as well as multiple companies from different professional sectors, without providing further details.

Almería will not be the only Andalusian port with plans to produce hydrogen. The Port of Malaga is also expected to host green hydrogen production through a project that also contemplates the use of artificial intelligence.

This article originally appeared on pv-magazine-usa.com, and has been republished with permission by pv magazine (www.pv-magazine.com and www.pv-magazine-usa.com)

A hydrogen bus developed by Poland-based Solaris Bus & Coach.

Image: Solaris Bus & Coach

U.S. trading company Tramo, Vienna-based Austria Energy Group and Austrian renewable energy developer Oekowind have signed a memorandum of understanding for the production of a hydrogen/green ammonia plant to be developed in Chile with an estimated annual production capacity of 1 million tons of green ammonia. This project, in Chile, will be one of the first to commercialize green ammonia. It will be based on a 2 GW wind farm.

A team of researchers at the Research Center for Energy Networks and Energy Storage (FENES) of the East Bavarian Technical University (OTH) Regensburg, led by Professor Michael Sterner, is developing a hydrogen atlas for Germany. The interactive, continuously updated database will show which power-to-X plants are installed, indicating also related regional value chains. The project will be built gradually. The final version should be available in 2023. “The hydrogen atlas offers users the opportunity to assess potential, consumption, costs and emission reductions on a regional level,” Sterner explains. “This provides them with a comprehensive tool that facilitates entry into concrete technical planning.”

Canadian integrated energy company Suncor and Canadian holding company ATCO are looking into a potential “world scale clean hydrogen project” in Alberta. The decision follows support messages from the government of Canada and the government of Alberta, both in favor of emission-reduction projects. “Approximately 20% of the produced clean hydrogen could be used in the Alberta natural gas grid to further reduce emissions,” read a note released on Tuesday, adding that the majority would be used in refining processes and co-generation of steam and electricity at the Suncor Edmonton Refinery. The project should produce more than 300,000 tonnes per year of clean hydrogen.

Japanese petroleum company Eneos and Japanese multinational automotive manufacturer Toyota Motor are exploring hydrogen applications at Woven City, a prototype city in Susono City, Shizuoka prefecture. Eneos should establish a hydrogen refueling station and produce green hydrogen. The two companies are also interested in conducting joint advanced research on hydrogen supply. “At Woven City, they intend to promote carbon neutrality in everyday mobility, people's lives, and within the infrastructure of the city itself,” read a statement released on Monday.

Japanese transport company Mitsui O.S.K. Lines (MOL) and Mitsui E&S Machinery are carrying out a joint study to introduce hydrogen fuel port cargo handling machinery. As part of the agreement, MOL signed a “contract for a new, near-zero emission, rubber-tired gantry container yard crane, and decided to introduce it at the MOL-operated Kobe International Container Terminal.”

Professor Kondo-Francois Aguey-Zinsou, who leads the Hydrogen Energy Research Centre (HERC) at the University of New South Wales (UNSW), said that Australia is at the cutting edge of the hydrogen revolution and will increasingly collaborate with other countries. The comment came at the launch of a new hydrogen advisory firm called H2Potential, which will act as an incubator and an accelerator of hydrogen businesses. In collaboration with LAVO, Aguey-Zinsou helped produce the world’s first residential/commercial hydrogen battery, which stores 40 kWh of energy. That’s almost three times the capacity of a Tesla Powerwall 2, which offers 13.5 kWh.

An international alliance of 45 companies, knowledge institutes and port authorities, headed by the Port of Rotterdam Authority, has been awarded nearly €25 million in EU funding, wrote the Port of Rotterdam on Tuesday. “The consortium will be using this grant to execute ten pilot projects and demonstration projects that focus on sustainable and smart logistics in port operations,” read the note, adding that many details are not yet clear. Anyhow, the Port of Rotterdam explicitly mentioned green hydrogen among the potential renewable fuels and energy carriers.

Germany confirmed its interest in funding hydrogen, with both Länder and the federal state looking into projects that could allow the country to become a “global technology supplier.” An example is the hydrogen hub planned in Huntorf by Oldenburg-based energy, telecommunications and information technology company EWE and Dusseldorf-headquartered energy company Uniper. “Green hydrogen is an indispensable building block for the energy transition. That's why we are funding five innovative research projects across Lower Saxony with a total of €6 million. Here in Huntorf, the DLR Institute for Networked Energy Systems and Clausthal University of Technology are now using the compressed air storage power plant to investigate the potential of using green hydrogen in thermal processes,” Lower Saxony's minister for science and culture, Björn Thümler, commented in a note released on Monday.

Poland-based Solaris Bus & Coach has sold 13 hydrogen vehicles to Frankfurt. The buses are to be deployed on target routes in 2022. “The technology used in the Urbino hydrogen [bus] makes for absolutely environmentally friendly transport, thanks to the use of energy supplied by a fuel cell (of 70 kW),” read a note released last week. Earlier this year, the company signed deals for hydrogen buses with companies based in Germany, Italy, Austria and the Netherlands.

This article originally appeared on pv-magazine-usa.com, and has been republished with permission by pv magazine (www.pv-magazine.com and www.pv-magazine-usa.com).

First Solar

First Solar and Nel Hydrogen Electrolyser, a division of Nel ASA, a supplier of hydrogen technology, said they will develop integrated photovoltaic/hydrogen power plants.

First Solar and Nel will initially collaborate to develop an integrated power plant control and Supervisory Control and Data Acquisition (SCADA) system. The development of this network architecture is critical to enable optimisation of PV-electrolyser hybrid projects, resulting in low total cost of hydrogen and electricity. After that, the two will explore  ways of optimising and integrating technology throughout the solar and hydrogen production plant.

In statements, both companies stressed their desire to deliver the lowest total cost of solar to hydrogen possible. Both also noted that First Solar’s low-carbon production of its cadmium-telluride modules was significant for keeping emissions low.

Because the partnership is so recent in nature, no project timelines have been released as of yet.

This article originally appeared on pv-magazine-usa.com, and has been republished with permission by pv magazine (www.pv-magazine.com and www.pv-magazine-usa.com).

The site where the new salt cavern is being built.

Image: EWE

German energy provider EWE has started the construction of a cavern for hydrogen storage in Rüdersdorf, near Berlin.

The cavern storage facility will have a capacity of 500 cubic meters, which corresponds to the volume of a single-family house. The company is working with the German Aerospace Center (DLR) on this project.

The DLR Institute for Networked Energy Systems will examine, among other things, the quality of the hydrogen during storage and after it has been extracted from the cavern.

In the first stage of the project, EWE will build a derrick on an existing borehole and this work is expected to take a week. The utility will then install and cement a steel pipe from the surface to a depth of 1,000 meters by the beginning of April. This will connect the pilot cavern with the earth's surface.  

“In the context of the research project, we particularly hope to gain knowledge of the degree of purity of the hydrogen after it has been withdrawn from the cavern,” said EWE project manager Hayo Seeba. This factor is crucial for the use of hydrogen in the mobility sector.

The knowledge that the small pilot cavern will provide should be easily transferable to caverns with a volume that is 1,000 times higher, the company went on to say. The aim is to use caverns with a volume of 500,000 cubic meters for large scale hydrogen storage in the future.

EWE owns 37 salt caverns that represent 15% of all German cavern storage facilities that could be suitable for storing hydrogen in the future. “This would mean that large quantities of green hydrogen generated from renewable energies could be stored and used as required and would become an indispensable component in order to achieve set climate targets,” Seeba added. 

Scientists at Germany’s Jülich Institute for Energy and Climate Research (IEK-3) recently revealed that Europe has the potential to inject hydrogen in bedded salt deposits and salt domes with a total energy storage capacity of 84.8 PWh. Most of these salt caverns are concentrated in northern Europe, at offshore and onshore locations. Germany accounts for the largest share, followed by the Netherlands, the United Kingdom, Norway, Denmark, and Poland. Other potential sites are in Romania, France, Spain, and Portugal.

“Germany has the highest storage potential in both onshore and offshore contexts,” the group said.

This article originally appeared on pv-magazine-usa.com, and has been republished with permission by pv magazine (www.pv-magazine.com and www.pv-magazine-usa.com)

The world already has a nascent hydrogen economy, according to IEEFA.

Image: Roy Luck/Flickr

The Institute for Energy Economics and Financial Analysis (IEEFA) estimates there are 50 green hydrogen projects under development worldwide. Those projects, have a planned annual production capacity of 4 million tons of hydrogen and a total renewable power capacity of 50 GW, according to the Ohio-based thinktank, with their combined capital cost estimated at $75 billion.

In its Asia, Australia and Europe Leading Emerging Green Hydrogen Economy, but Project Delays Likely study, IEEFA said the projects announced represent an embryonic global green hydrogen economy.

“Most of these 50 projects are at an early stage, with just 14 having started construction and 34 at a study or memorandum-of-understanding stage,” the report noted. “However, many of the 50 newly-announced green hydrogen projects could face delays due to uncertain financing, cumbersome joint venture structures and unfavorable seaborne-trade economics.”

The study stated the majority of the projects announced will begin commercial operation in the middle of the decade, with large scale facilities starting up in 2022-23 and 2025-26.

The report’s authors said the hydrogen strategies of China, Japan and South Korea appear to prioritize hydrogen generated using natural gas – designated grey hydrogen, or blue if facilities are intended to feature carbon capture technology – rather than ‘green’ hydrogen generated using renewable energy. IEEFA described the €430 billion ($507 billion) hydrogen strategy of the European Union as the the most ambitious and purposeful energy transition policy to date.

“The EU’s hydrogen capex [capital expenditure] commitment far outweighs the commitment from Korea and Japan, reflecting the EU’s ambition to remodel its energy system and vertically integrate the hydrogen value chain with wind and solar power, electrolysis, distribution and applications,” stated the report.

Annual green hydrogen demand could reach 8.7 million tonnes by 2030, according to the IEEFA study, prompting a big supply shortfall given the current capacity of the project pipeline.

The report lists all publicized projects, including five facilities announced in the last two months – an 85 MW Nikola Motor Company plant in the U.S.; a 4 GW facility in Saudi Arabia planned by Air Products, Acwa Power and Neom; a 20 MW electrolyser being developed by U.S. energy company NextEra; a 100 MW solar park, storage facility and hydrogen production site in Puertollano, central Spain, by Iberdrola; and a 30 MW electrolyzer project by German consortium WestKüste100.

“There remains ample room for more hydrogen projects to meet global demand and further policy support will be necessary to grow this nascent industry,” added the report’s authors.

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