Sep-2024

Optimising electrolytic hydrogen production

Power and process simulation and modelling can optimise the design and operations of electrolytic hydrogen projects.

Dharmendra Umarnani
Schneider Electric

Article Summary

Electrolytic hydrogen is forecasted to play a key role in building a more sustainable, decarbonised future. Low-carbon hydrogen does not produce greenhouse gases and has the potential to aid the decarbonisation of hard-to-abate industries where direct electrification or other forms of renewable energy are not feasible. Here, electrolytic hydrogen can complement the phase-out of high-carbon fuels, especially in applications such as high-temperature heating. It may also be important for fuels of the future, such as sustainable aviation fuel (SAF).

Clean hydrogen is garnering global support from governments and industries worldwide. For example, the Renewable Energy Directive (RED II and RED III) in Europe set targets to increase electrolytic hydrogen use. This directive includes a requirement for electrolytic hydrogen projects to include additional renewable electricity capacity to assure users that the hydrogen is generated from renewable electricity (green hydrogen). In the US, the 2021 Inflation Reduction Act (IRA) is incentivising clean hydrogen production based on a carbon intensity that must be equal to or less than 2kg CO2eq/kg H2. Many countries, including some in Europe, have already started investing in multibillion initiatives such as the European Hydrogen Backbone (EHB) pipeline. With this worldwide interest in increasing hydrogen use, it is not unexpected that the green hydrogen industry, which was more than $1.7 billion in 2022, is expected to grow by >300% in the next decade (ResearchNester, 2023).

However, while green hydrogen has the potential to be a pillar of decarbonisation, there are still questions about its viability as a widespread green fuel solution. Global hydrogen production must be scaled up to meet demand. This requires green hydrogen producers to address issues, such as the challenges of intermittency and availability of renewable power, levelised cost of hydrogen (LCOH), and supply optimisation and production forecast.

This article examines how end-to-end modelling and simulation at early stages of the project, as well as different operating scenarios, can impact the cost, design optimisation, and reliability of a green hydrogen project.

Green hydrogen is key to decarbonising specific applications
From balancing the decarbonised energy system to fuelling cleaner aviation, green hydrogen has a number of significant potential applications in the coming years and decades. To meet net zero objectives by 2050, the energy system needs to switch from high-carbon to low-carbon fuels twice as quickly as it is currently, and doing so will require a lot more green hydrogen. Increased demand for decarbonising energy-intensive sectors, such as steel manufacturing and heating, will likely provide a much-needed impetus to accelerate its production.

Energy efficiency, renewable power, and direct electrification reduce emissions from electricity production and some transportation. However, almost 30% of the economy, comprising aviation, shipping, long-distance trucking and concrete and steel manufacturing, is difficult to decarbonise because these sectors require high energy density fuel or intense heat.

Green hydrogen could meet these needs. It can be used either where it is produced or transported elsewhere. Unlike batteries, which are unable to store large quantities of electricity for extended periods hydrogen can be produced from excess renewable energy and stored in large amounts for a long time. Pound for pound, hydrogen contains almost three times as much energy as fossil fuels. A particular advantage of green hydrogen is that it can be produced wherever there is water and low-carbon electricity to generate more electricity or heat.

The key building blocks for green hydrogen are renewable generation, energy storage, electrolysis, hydrogen storage, and transport. These blocks play a vital role in determining the Capex/Opex and operational design constraints. It is vital to size these building blocks at an early phase of the project so it is techno-commercially feasible.

Green hydrogen must overcome significant barriers to be widely produced and adopted
While there are several barriers to green hydrogen production and adoption, the key challenges are:
- Intermittency and availability of renewable power: Green hydrogen production is complex, in part, because of renewable power’s intermittency. It does not offer a similar inertia to the grid as conventional generation. Intermittent renewables disrupt conventional methods for planning the electric grid’s daily operations. Renewables’ power fluctuates over multiple time horizons. This fluctuation sometimes forces the grid operator or project developer to adjust their day ahead, hour ahead, and real-time operating procedures. This is why simulating power generation coupled with hydrogen processes is an important step.

- Levelised cost of hydrogen: Despite widespread enthusiasm for green hydrogen, adoption still does not make good financial sense in many cases, mainly because of the high cost of supplying renewable electricity and the cost of capital. There are consistently high wholesale market power prices across Europe, and an expectation that these high prices will continue for most of the decade. Higher capital costs are not only impacting the financing of electrolysers and the power infrastructure itself, but also the cost of supplying off-grid renewable power as an alternative to the high wholesale market power prices. These factors have led many projects to now forecast an LCOH that may not support a positive business case.

- Supply optimisation and production forecast: The combination of renewable intermittency challenges and the pressure to reduce the LCOH may lead project developers to adopt different operating strategies and hybrid business cases, which can introduce substantial green hydrogen forecasting challenges. In addition, hydrogen transportation requires hydrogen to be coupled with a carrier, such as green ammonia or methanol. This process is complex and requires a constant flow of hydrogen and a reliable forecast so that the process can be controlled. With so many variables, intermittency, and multiple operating strategies, the project developer needs to implement integrated operating and financial models.

Power and processes simulations and control strategies help overcome these challenges
It is vital to have an integrated simulation, control architecture, and pre-defined control strategy. They must optimise the design and operating costs while also supporting safe and reliable operations.

- Modelling saves time and money by optimising design: An integrated and unified power and process simulation model simplifies plant design and improves operations. Integrated power, process, and economic modelling allow a project developer to visualise the key design risks at the early stages of the project. This involves multiple steps, including creating a base model, testing scenarios, and creating an optimised model. Integrated modelling not only helps ensure a fully optimised design but also provides a substantial improvement in Capex/Opex.

The tools selected for modelling must be scalable and convertible from a low-fidelity model at the early stages of the project to a high-fidelity model at FEL-2 (scope development and conceptual engineering)/FEL-3 (front-end engineering designt, FEED). The model should converge into both a detailed control strategy and a detailed control architecture. This approach allows project developers to retain the original models, on an original basis, from Day 0 of the project until the end of operations.

- Techno-commercial modelling helps determine if a project is financially feasible: A number of economic parameters – the levelised cost of electricity (LCOE), LCOH, levelised cost of ammonia (LCOA), and internal rate of return (IRR) – are key to securing the final investment decision (FID) for a green hydrogen project. The economic parameters are directly linked to the technical design and multiple operating scenarios.