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TK RENEWABLES
WPT2
EIBHLIN MARSH
&
KIERAN MC LAUGHLIN
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2. TK RENEWABLES
GENCOMM MEETING
20TH/21ST MARCH 2018

3. DEVELOPMENT OF A HYDROGEN BASED ENERGY MODEL
TK RENEWABLE ROLE
DEVELOPMENT OF A HYDROGEN BASED ENERGY MODEL
(COMMERCIAL AND ECONOMIC ANALYSIS)

4. The main objective of WPT2 is as follows;
To develop a Financial Decision Making Model (FDMM) which will be used to project, evaluate and optimize the financial performance of a community-scale hydrogen-based energy matrix

5. The model will comprise the following elements:
A full analysis of the Hydrogen Market
CAPEX and OPEX figures identified for the investment projects
A full cost analysis for hydrogen production with an estimated cost per kg for hydrogen
An analysis of projected revenue streams
A presentation of the financial indicators

6. The data for the models will be derived from the outputs from the Investment Packages.
WPI1 Hydrogen to Heat and Power Pure Energy
Biogas CHP plant with hydrogen storage and methanation
WPI2 Hydrogen to Transportation Fuels IZES
Solar Powered Hydrogen Refuelling Station
WPI3 Hydrogen to Power VIRIDIAN
Wind Farm with hydrogen storage and products

7. This market analysis is now complete
PROGRESS TO DATE
DELIVERABLE 1.1 Market Analysis of Renewable Hydrogen
This market analysis is now complete

8. HYDROGEN ECONOMY REPORT STRUCTURE
The Properties of Hydrogen
The Production of Hydrogen and Associated Technologies
Hydrogen Storage and Transportation
The Technical and Affordability Issues for a Hydrogen Economy
The Environmental Issues
The Cost Factors associated with the Hydrogen Economy
Renewable Hydrogen Opportunities and Appropriate Production Strategies
The Future for Hydrogen on a Global Basis
Relevance for GenComm – Wind to H2, Solar to H2, Biomass to H2
The Commercial and Economic Modelling of the Hydrogen Technology
Final Conclusions

9. Hydrogen costs need to be as low as possible
The Properties of Hydrogen
Hydrogen costs need to be as low as possible
An additional issue is that a completely new distribution network is required for hydrogen.
The purpose of GenComm is to demonstrate that the hydrogen economy can be used to provide cheap alternative energy options for regions which are interested in exploring and utilising these alternatives
So for a hydrogen economy to be viable the energy consumed in the production, packaging, transport, storage and transfer of elemental hydrogen needs to be compared to the energy content of the delivered hydrogen.

10. 2. The Production of Hydrogen and Associated Technologies
The Production Processes of Hydrogen
Electrolysis
Reforming
From Fossil Fuels
From Nuclear Energy
From Renewable Energy Sources
An analysis of Production Costs from the various methods

11. At today’s energy prices, it is considerably more expensive to produce hydrogen by water electrolysis than by reforming of fossil fuels. According to many sources, it costs around €5.60 for every GJ of hydrogen energy produced from natural gas, €10.30 per GJ from coal, and €20.10 per GJ to produce hydrogen by electrolysis of water. Before taxes, gasoline costs about €3.00 per GJ.

12. It is very difficult to get a fully accurate feel for the cost of hydrogen production from wind as there are so many variables. It has been found for example that connecting wind/hydrogen systems with the electrical grid improves the economics of production.
In the USA, the NRC (National Research Council) estimates and projects hydrogen production costs from solar PV including estimates of
€28.19 per kg (€198.81/GJ) for current technology and stand-alone production,
€6.18 per kg (€43.58/GJ) for future technology and stand-alone production
Both agricultural residues and manure from livestock as well as specific energy crops can be used to produce hydrogen. These are very viable economically with costs of €2.65 per kg (€18.80 per GJ) for production from agricultural residue with €2.30 per kg (€16.32 per GJ) for production from manure

13. 3. Hydrogen Storage and Transportation
Hydrogen Packaging
The Compression Process
Hydrogen Liquefaction
The use of Hydrides
Delivering the Hydrogen
Delivery by Road
Delivery through a pipeline
Generation on-site
An analysis of the costs for delivering/transferring Hydrogen
In general, it was found that for the centralised options researched, the costs of hydrogen are lowest for liquid hydrogen distribution by tanker truck, followed by tube trailer delivery, followed by delivery by pipeline.

14. For small scale, distributed systemss (about 500 kg of hydrogen produced per day), estimated delivered costs of hydrogen are:
€4.40 per kg (€30.99/GJ) for natural gas SMR
€12.12 per kg (€85.35/GJ) for water electrolysis (using grid power at €0.07/kWh).
SOME INTERESTING INVESTMENT FIGURES
Distribution - New 230 bar tube trailer Capex £300k
New 500 bar tube trailer Capex £1 million
3 X 500 bar tube trailers with 1.1 ton capacity each could support 50 buses
Vehicles -1st Gen OEM FCEV £120k
-2nd Gen OEM FCEV £50k
Suggested pump sale price £9 - £12/kg

15. . Infrastructure Costs
Up front costs of local HRS between £0.5 to £1 million
HRS Capex £0.8 million 80kg/day
£1.4 million 500kg/day
£2.2 million 1000kg/day

16. 4. The Technical and Affordability Issues for the promotion of a Hydrogen Economy
Formidable technical and cost challenges will need to be overcome for hydrogen to be able to compete with, and eventually replace, existing energy technologies. The biggest advances are needed in transportation and storage of the fuel, as well as in fuel cells in vehicles.
Issues with Production, Distribution and Storage
Carbon Capture and Storage
Fuel Cells
However hydrogen is produced, its widespread use will require large-scale infrastructure to transport, distribute, store and dispense it as a fuel for vehicles or for stationary uses.

18. There is plenty of evidence that, with proper handling and controls, hydrogen can be as safe as the fuels in use today. Indeed, hydrogen has a long history of safe use in industry. But, for it to become widely accepted in other applications, it will become increasingly important to develop and implement internationally agreed rules, regulations, codes and standards covering the construction, maintenance and operation of hydrogen facilities and equipment safely.

19. The Environmental Issues
The Implications for the Environment of an increase in Hydrogen use.
The Implications for the Environment of Production Methods for Hydrogen
Replacing fossil fuels with hydrogen in providing energy services could bring major environmental benefits, on condition that hydrogen is used in non-polluting fuel cells and that the carbon dioxide and noxious gases emitted in the hydrogen-production process are reduced or eliminated.

20. The basic appeal of hydrogen – and the main driving force behind current research and development – is its environmental advantages over fossil fuels. But hydrogen is only as clean as the technologies used to produce and use it.

21. If nuclear or renewable energy sources, such as wind, solar and biomass are used to generate the hydrogen then it would be carbon free which is an advantage. However substantial reductions in the costs of renewables-based electricity and nuclear power are needed to allow them to compete with conventional sources of energy on a large scale

22. The Cost Factors associated with the Hydrogen Economy
Costs associated with developing a Hydrogen Infrastructure within the regions concerned
Government support required
Analysis and Projections of Hydrogen use

23. The main issue now and it is an important one that will be stressed throughout the lifetime of the GenComm project and that is because of the increased growth in installed capacity of renewable energy technologies and the decreased costs then data which is only one or two years old can result in significant overestimation of the costs of electricity from renewable technologies.

24. This is a key point for the Gencomm project as the key outputs are the development of tools that will look at all of the costs associated with Wind to Hydrogen, Solar to Hydrogen and Biomass to Hydrogen. The point has been made above that with the advances in technology data from development projects regarding CAPEX and OPEX costs can be obsolete within 1 or 2 years so it is difficult to plan accurately.

25. Renewable Hydrogen Opportunities and Appropriate Production Strategies
Regional strategies for hydrogen production need to take into account the regional renewable hydrogen potential along with production potential from other sources.
Success in lowering the costs of electrolyser-based hydrogen could therefore be important to complementing imports of hydrogen from other sources

26. The Future for Hydrogen on a Global Basis
The ultimate success of a hydrogen economy depends on how the market reacts: For example does emerging hydrogen technology provide more value than today’s fossil fuels?
Although the market will ultimately drive the hydrogen economy, government plays a key role in the move from fossil fuel to hydrogen technology.

27. 9. Relevance for GenComm – Wind to H2, Solar to H2, Biomass to H2
Each of the 3 main development work packages will be generating datasets which will feed into both the Technical Models and the Commercial Models and ultimately the Decision Support Tool.
The research which constitutes the Hydrogen Paper will be ongoing as further opportunities are identified in the regions.

28. The Commercial and Economic Modelling of the Hydrogen Technology
In this section there will be recommendations on what format the Modelling aspect of this work package will be. Again it will be driven by the outputs from the 3 Development Work Packages and the associated research.
As a starting point for the modelling process we will be reviewing a model which has been produced in the USA which comprises four different but relevant models which will be of use to us. From these investigations we can begin the process of developing our own commercial modelling tools.

29. These four H2A Excel-based models for hydrogen technology analysis are as follows.
• H2A Distributed Forecourt Production and Refuelling Model (50 kg/day to 6,000 kg/day production)
• H2A Central Production Model (≥ 50,000 kg/day production)
• H2A Delivery Components Model
• H2A Delivery Scenario Analysis Model (HDSAM)

30. Final Conclusions
Efficient and effective system design is key to profitability and those which demonstrate flexibility with a number of market application will be more profitable and will have a shorter payback period.
The use of electrolysers is key to the process and there is clear evidence that there is an increasing interest in further research in electrolyser technology.
The point has been made that with the advances in technology data from development projects regarding CAPEX and OPEX costs can be obsolete within 1 or 2 years so it is difficult to plan accurately
A critical market mass to be achieved for hydrogen to be considered as a viable energy option.
Curtailment is one of the most serious of the issues that has led to the development of the Gencomm project

31. QUESTIONS