Inexperienced hydrogen initiatives might be worthwhile in “broad swaths” of the USA, supported by new federal tax credit for clear hydrogen, in response to a monetary modeling evaluation of the consultancy. within the Power Innovation coverage.
From pv journal USA
Just some months after the passing of federal Inflation Discount Act (IRA), energy plant owner-operator AES Company and industrial gases firm Air Merchandise introduced a $4 billion three way partnership to construct, personal and function a inexperienced hydrogen manufacturing facility Texas with 1.4 GW of photo voltaic and wind capability, which is able to qualify for clear hydrogen manufacturing tax credit score below part 45V of the IRA.
The undertaking, to provide 200 metric tons of inexperienced hydrogen per day, is “financially viable” even with out grid connection, coverage consultancy Power Innovation stated in a report.
To determine different areas the place inexperienced hydrogen manufacturing might be worthwhile, Power Innovation modeled the economics of the undertaking and located that in areas with “sturdy” wind assets and “first rate” wind assets photo voltaic, these initiatives are “financially possible from the start.”
The report’s broader focus is an argument for “good design” of the part 45V manufacturing tax credit score for clear hydrogen, to make sure that it promotes each low emissions and clear progress. hydrogen business.
The report mentions three forms of clear hydrogen undertaking design that the authors suggest to qualify for the tax credit score, by matching the renewable era each hour to the electrical energy consumption of the electrolyzers.
Electrolyzers use electrical energy to separate water molecules into hydrogen and oxygen. The US Treasury is at present formulating rules to specify the necessities to qualify for the part 45V tax credit score.
The only undertaking design mentioned within the report will solely use on-site renewable energy, as proven on the left within the close by picture. The report additionally describes “export-only” initiatives that may promote extra renewable energy to the grid and, in instances of excessive market electrical energy costs, flip off the electrolyzer plant and promote all of the grid energy. The third configuration of the undertaking, “indifferent,” will use grid energy and may match its hourly electrical energy use to hourly accounting for the emission fee from grid energy.
For its monetary evaluation, Power Innovation fashions export-only initiatives with “massive” wind and photo voltaic capability relative to the capability of the electrolyzer plant. Oversizing the renewable era will improve the usage of the electrolyzer plant, as proven within the close by picture. The determine additionally exhibits the gross sales of exported electrical energy in instances of extra era and when market costs for electrical energy are at a “premium.”
“Broad elements of the US” can help worthwhile inexperienced hydrogen manufacturing, the report says, the place the price of energy from new wind and photo voltaic capability averages under $25/MWh, as proven on the close by map.
Power Innovation map of hydrogen manufacturing in the USA.
For the three areas proven with stars on the map, Power Innovation fashions undertaking funds for an export-only inexperienced hydrogen plant. Most worthwhile is the West Texas location, which achieves a revenue of $143 per kW of electrolyzer capability per 12 months, by working a 1 MW electrolyzer plant with 3 MW of photo voltaic and a pair of MW of wind. The subsequent most worthwhile is a location close to Houston, with revenues of $85 per kW/12 months utilizing larger ranges of photo voltaic and wind capability, adopted by a southwest Minnesota location with revenues of $61 per kW/12 months. 12 months utilizing 2 MW of photo voltaic and 4 MW of wind.
Power Innovation estimates the electrolyzer capital price at $1,400 per kW. Revenues will embody hydrogen income of $1/kg, along with IRA tax credit score manufacturing and electrical energy gross sales. The price of water was not an element within the evaluation. At every location, about half of the electrical energy generated shall be bought to the grid. The necessity for an export-only hydrogen plant to connect with the ability grid, the report says, is a “course of that will contain excessive prices, delays, and basic uncertainty.”
As electrolyzer capital prices proceed to say no, inexperienced hydrogen initiatives will develop into economical in lots of areas over time, the report stated. If prices drop to the purpose that electrolyzers must run solely 20% to 30% of the time to make a revenue, “solar-only initiatives shall be viable.” The report says that “this can be a fascinating long-term outcome,” as a result of electrolyzers that solely run at “very low-cost hours will assist combine a better share of renewable power into the grid .”
To make use of hydrogen for seasonal storage of renewable energy, Mitsubishi Energy Americas and Magnum Growth LLC are including 300 GWh of hydrogen storage capability in salt domes close to the Intermountain Energy Challenge in Utah, which sells electrical energy to the Los Angeles municipal utility.
Present industrial makes use of of hydrogen embody ammonia manufacturing, largely for fertilizer, and oil refining. Ammonia will also be used as a delivery gasoline. The Inexperienced Hydrogen Coalition says inexperienced hydrogen also can decarbonize metal and cement manufacturing.
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