Large-scale solar plants and offshore wind farms : an economic comparison including the potential for hydrogen production and CO2-emission effects

Fossil fuels are becoming increasingly undesirable and humanity is searching for green, sustainable, and reliable energy sources to satisfy the worlds energy consumption and preserve the earth for the future generations. Global research communities are working intensively to develop and implement the best technologies and solutions, and solar- and wind power are the most promising green energy solutions for the transition to a more sustainable energy future. This thesis investigates the economic feasibility and environmental impact of hydrogen storage used in tandem with a wind farm off the coast of Norway and a solar plant located in Algeria. An optimization model developed by SINTEF called HyOpt, determined an optimal investment strategy based on production data and market prices. Five cases are analyzed using price- and production data from 2019: (i) a wind farm delivering electricity to the market, (ii) a solar plant delivering electricity to the market, (iii) a wind farm with a hydrogen production unit selling hydrogen to the market, (iv) a wind farm which delivers electricity to the Ekofisk oil field, and hydrogen to the market, and (v) a solar farm delivering electricity to a local processing plant and hydrogen to the market. The HyOpt model uncovered that case (i), the wind farm solely selling electricity to the German market based on hourly spot-prices in 2019 would operate with a negative net present value of -16.9 bn NOK while cutting CO2 emissions by 1,3Mtons annually. Case (ii), the solar plant only selling electricity to the French market had a similar net present value of -16.4 bn NOK while also cutting the annual CO2-emissions by 1,4Mtons per year. It is important to notice, that both projects turned positive if the price level from 2021 is assumed to be representative for the future. The last three cases represent net profitable investments, based on the assumptions made. The wind farm selling hydrogen to the market (case (iii)) achieved a positive net present value of 1.3 bn NOK, meaning that the project is expected to be profitable while also having a positive impact on the environment by substituting approximately 1,2Mtons of CO2. However, the biggest setbacks of these energy solutions are their production reliability. This thesis introduces the solution of hydrogen storage, whereby electricity produced is used to produce hydrogen from electrolysis which is compressed and stored, before being converted back to electricity using a fuel cell. In case (iv), the project where the wind farm hourly delivered 110 MW electricity through the use of hydrogen storage to the Ekofisk oil field and sold the surplus hydrogen in the market, a positive net present value of 4.7 bn NOK was achieved, while simultaneously cutting the CO2 emissions by 1,5Mtons annually. The solar counterpart with electricity supply to a local processing plant as well as selling the surplus hydrogen in the market, case (v), achieved a net present value of 3.4 bn NOK while substituting approximately 0,7Mtons of CO2 in addition to the emissions that the local processing plant might reduce switching to green energy. The findings indicate that hydrogen has a positive effect on both the economic feasibility and the environmental impact in the studied energy projects. All cases and conclusions are indicative. Large-scale solar and offshore wind farms installations in the GW range hardly exist yet, making all the cost estimates quite uncertain. However, common for all cases, are the potential to reduce CO2 emissions significantly, and contribute to zero emission energy for our common future, thereby being economically sustainable