MEI Symposium 2018 The Future of Hydrogen in Australia ... · Closing thoughts . Australian energy...
Transcript of MEI Symposium 2018 The Future of Hydrogen in Australia ... · Closing thoughts . Australian energy...
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MEI Symposium 2018 The Future of Hydrogen in Australia: some thoughts Wednesday 12th December, 2018 Michael Brear Director Melbourne Energy Institute
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Outline
1. Preliminaries
2. Inputs and scenarios
3. Parametric dependence of the LCOH
4. Wind and solar farm dynamics
5. Integration of renewable electricity and hydrogen
6. Closing thoughts
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Australian energy vectors*
Electricity • Consumption = 250 TWh p.a. = 900 PJ p.a. • Typical wholesale price = 80 $/MWh
Coal • Consumption = 1900 PJ p.a.
Natural gas • Consumption = 1500 PJ p.a. • Typical wholesale price = 8 $/GJ = 29 $/MWh
Oil (which mainly becomes gasoline, diesel and kerosene) • Liquid fuel consumption = 2300 PJ p.a. • Typical (refined product) wholesale price = 1 $/lt = 30 $/GJ
• Remarkable that so much of the national debate is on electricity / coal given the scale of fossil fuel use!
*Australian Energy Update, 2018, Department of Environment and Energy
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Industrial electrolysis isn’t new – 135MW alkaline plant in 1940 Norway
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Alkaline electrolysis is relatively straightforward
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Inputs and scenarios
• The Levelised Cost of Hydrogen (LCOH): • Electrolyser inputs, unless specified otherwise:
‒ capital cost = 1 $/W ‒ cost of capital = 10% ‒ O&M = 4 $/MWh ‒ efficiency = 65%
• We define 2 renewable generation scenarios:
1. Current ‒ Solar: 25% capacity factor, 1.4 $/W ‒ Wind: 40% capacity factor, 1.6 $/W ‒ wind and solar = 65 $/MWh unsubsidised ‒ 10% cost of capital
2. Cheap renewables: a rough estimate of their unsubsidised cost in 2030 ‒ wind and solar = 35 $/MWh unsubsidised ‒ due to a combination of capital cost reductions and a 5% cost of capital
( ) ( ) ( )( )
capital costs + electricity costs + other operating costs$production of hydrogen
LCOHGJ
=
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Parametric dependence of the LCOH – capacity factor
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LCO
H ($
/GJ)
capacity factor
cheap renewables
• LCOH doesn’t reduce much further for capacity factors above about 50% – require operation
in this regime.
current renewables
gasoline
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Parametric dependence of the LCOH – capital cost
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LCO
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capital cost ($/W)
current renewables
• Alkaline electrolysis appears to have a significant advantage relative to PEM electrolysis.
gasoline
cheap renewables
alkaline PEM
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Wind and solar farm dynamics
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% p
.a. g
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ove
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frac
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fraction of capacity • This graph shows the proportion of the year that two operating farms generate above some
fraction of their full capacity.
wind
solar
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Capacity factor of a sub-scale electrolyser next to a renewable plant
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electrolyser capacity / renewable capacity • CF of sub-scale electrolyser relatively high due to renewable generation above its capacity. • CF of electrolyser tends to that of the renewables when their capacity becomes equal.
wind
solar
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Fraction of energy produced as hydrogen from a renewable plant
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electrolyser capacity / renewable capacity
wind
solar
• Small electrolysers don’t make much hydrogen, even with high CF! • Energy fraction tends to electrolyser efficiency when its capacity equals the renewable plant.
region of roughly equal hydrogen and electricity
production (MWh)
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LCOH from alkaline electrolysis next to a wind or solar farm
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LCO
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electrolyser capacity / renewable capacity
current renewables
• Small electrolysers cheaper because of their higher CF. • Opportunity to match and even beat gasoline on price – all about the electricity price!
gasoline
cheap renewables
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Cost of abatement of green hydrogen
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LCOH ($/GJ) • Costs of abatement gets large quickly – achieving close-to-parity with the fossil equivalent
unsubsidised is therefore essential, and a particular challenge for displacing natural gas.
relative to gasoline/diesel
relative to natural gas
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Closing thoughts
• The production of hydrogen from renewable energy has good prospects, particularly in
decarbonising transport:
1. LCOHs that are competitive with conventional liquid fuels appear achievable, even without subsidy, should renewable electricity prices continue to fall;
2. hydrogen production on an energy basis could be comparable to the remaining renewable electricity – important given the scale of the liquid fuel market;
3. hard to see how hydrogen will compete on price with natural gas, but this may change as policy and technology evolves.
• Alkaline electrolysis has significant capital cost advantages over PEM, and large scale (i.e. >100MW) alkaline electrolysis isn’t new.
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A proposition - is this a good investment right now?
• X GW (i.e. big) wind or solar farm with X/4 to X/2 GW alkaline electrolyser
‒ electrolyser on-site or elsewhere, depending on the economics: comparing cost of energy transmission via electricity and pipe/truck, effect of grid congestion, etc.
‒ electrolyser provides ancillary services to help firm the grid: additional revenue not modelled in today’s presentation;
‒ electrolyser maybe also sells oxygen: more revenue again;
• Hydrogen used to decarbonise land, sea and air transport, either domestically or internationally:
‒ full electrification unlikely for medium-to-heavy duty land, sea and air transport; ‒ if the economics work, clean H2 can be made into liquid fuels, such as dimethyl ether, methanol,
synthetic hydrocarbons and ammonia; ‒ direct use of hydrogen not essential: oil refineries are already big hydrogen consumers, for
hydrogenation and desulphurisation, and methanol is already blended with gasoline in many markets globally.
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Thankyou