Techno-economic analysis for local hydrogen production for energy storage and services

The energy industry is quickly changing, with more renewable energy technologies emerging and sustainable sources growing in their capacities, which is slowly reducing the need for fossil fuel sourced energy supply. But with it come challenges, with energy storage becoming increasingly more important to help balance the gap between the energy supply and demand. The interest in hydrogen has accelerated in recent years as it can be used for several end uses, for example power-to-power, power-to-gas and power-to-fuel. It could therefore potentially decarbonise several industries, not just the energy sector. For hydrogen produced by renewables through water electrolysis to become competitive, the issues of low roundtrip efficiencies, high costs and the need of scaling up a new infrastructure needs to be addressed. This research project is a collaboration between University of Edinburgh and Bright Green Hydrogen (BGH). BGH is a non-for-profit company that created and launched the Levenmouth Community Energy Project (LCEP) in 2014 (operational from 2017) to explore electrolytic hydrogen’s ability to decarbonise energy supplies. The LCEP consists of: 750 kW wind turbine, 48 kW roof PV, 112 kW ground PV, 250 kW PEM electrolyser, 100 kW PEM fuel cell, two 60 kW hydrogen refuellers and a total of 17 hydrogen vehicles of three different models. This project used the data, information and observations from the LCEP to build an energy system model that included hydrogen with real-world aspects. The model was used to explore different ways that the economics and self-reliance for energy of small-scale hydrogen systems can be improved by conducting a techno-economic analysis on a number of alterations. The electrolyser control system was improved to help the electrolyser behave more energy efficiently, components were changed in sizing and a Lithium-ion battery was added into the model to help optimising the main electrolyser’s performance. The first novelty of this work was a new electrolyser model that was developed specifically to account for energy consumption and hydrogen production at low load, which appeared frequent and significant in this type of system. The model was found to represent the plant data better than existing ones. One general conclusion from this work was the impact of operation at low load, which is difficult to avoid at all times and yet should be minimised for good technical and economic performance. The second contribution to knowledge in this work is the methods and findings of the technoeconomic assessment. Several possible improvements were explored to find a balance in techno-economic performance of the small-scale hydrogen production facility. It was found that a control system that made adequate use of forecast weather and energy supply data was critical for effective and efficient use of the electrolyser, without excessive shutdown time and parasitic loss at times of low energy supply. In addition, changes in the respective capacities of the components (electrolyser, storage, solar energy supply) for the same demand could result in significant improvements in economic performance, and so could the incorporation of batteries within the system in support of the electrolyser. Batteries helped both electrolyser standby load (to help with grid independence) and hydrogen production (to improve electrolyser’s output). However, there is a balance between battery storage size and system benefits. In the particular case of the LCEP as built, the system struggled to perform well while it had two end uses (energy storage for buildings and fuel for vehicles) without more energy and hydrogen supply. Also, the main electrolyser was oversized for its needs, resulting in poor capacity utilization and high parasitic load. But a significantly smaller electrolyser with sufficient storage had a notable technical benefit to the system. Finally, there were several adjustments that could lead to a technically well-performing smallscale hydrogen system, but none that made it economically feasible. Capital costs, operating costs, maintenance costs, major replacement costs and durability of components are still major factors that need to be addressed for hydrogen at this scale to be feasible. However, this work clearly identified required areas of progress to achieve economic viability without subsidies, in particular, improving the longevity of the electrolyser and fuel cell stacks would alone enable a positive Net Present Value. In addition, recent and ambitious policy decisions and more widely deployed demonstration projects can stimulate volumes of productions of these components, and the significant cost reductions that these would allow