4.2 The Review of Hydrogen Production Processes
37
decrease of hydrogen production costs (Jacobs 2016; van Leeuwen and Mulder
2018).
The second parameter is the cost of fossil fuel feedstocks. The higher the
natural gas to crude oil prices ratio is, the quicker the price parity is reached.
In case of Japan, a 3% to 8% increase should be added to the ratio to consider
the cost of regasification of the liquified natural gas (Fasihi and Breyer 2019).
The expected increase of the cost of the methane feedstock will contribute to
the increase of the cost of hydrogen produced via SMR. From a base price of
e1,23 kg −1 in 2014, the price of hydrogen produced from SMR will increase to
e1,54 kg −1 in 2024 and then to e1,84 kg −1 in 2034. However, a high natural
gas price will contribute to a higher cost of hydrogen produced by SMR. But the
higher natural gas price will also contribute to a higher system marginal costs of
the electricity market. This means that a scenario with low electricity price along
with a high hydrogen price is unlikely (van Leeuwen and Mulder 2018).
The third parameter is the cost of the CO 2 emissions. CO 2 emissions cost of
e150 ton −1 would make renewable hydrogen generation cost competitive over
SMR at any natural gas to crude oil price ratio (Fasihi and Breyer 2019).
This leads to the fourth parameter which is the cost of CO 2 capture. In a
scenario where the cost of CO 2 emissions would increase, SMR operators would
be required to capture the CO 2 . This would create an extra cost estimated to be
of e0,32–1 kg −1 H 2 (van Leeuwen and Mulder 2018).
A fifth parameter is the CAPEX of electrolysers. The learning curve of the
AEC and PEMEC technologies is expected to lead to a significant CAPEX decrease over the coming years, towards a range of e500–600 kW el
−1 (Glenk and
Reichelstein 2019).
The technology efficiency improvement is the sixth parameter. A higher HHV
of up to 75% should be achieved by ongoing research and development of the
electrolytic hydrogen production technologies (Jacobs 2016; van Leeuwen and
Mulder 2018). However, its impact is limited compared to the CAPEX parameter.
A seventh parameter is the annual operating hours of the power-to-gas installation. The intensive use of the power-to-gas plant is required to cover the high
electrolyser CAPEX expenditure (Glenk and Reichelstein 2019). A power-to-gas
installation should run at least 2550 hours year −1 to be competitive in a 2030
projected European market conditions (van Leeuwen and Mulder 2018).
Finally, the eight parameter is the revenues from hydrogen. The production
from renewable electricity could justify the payment of a bonus compared to
fossil fuel-based hydrogen (van Leeuwen and Mulder 2018).
All these parameters can be influenced by policy instruments.
37
decrease of hydrogen production costs (Jacobs 2016; van Leeuwen and Mulder
2018).
The second parameter is the cost of fossil fuel feedstocks. The higher the
natural gas to crude oil prices ratio is, the quicker the price parity is reached.
In case of Japan, a 3% to 8% increase should be added to the ratio to consider
the cost of regasification of the liquified natural gas (Fasihi and Breyer 2019).
The expected increase of the cost of the methane feedstock will contribute to
the increase of the cost of hydrogen produced via SMR. From a base price of
e1,23 kg −1 in 2014, the price of hydrogen produced from SMR will increase to
e1,54 kg −1 in 2024 and then to e1,84 kg −1 in 2034. However, a high natural
gas price will contribute to a higher cost of hydrogen produced by SMR. But the
higher natural gas price will also contribute to a higher system marginal costs of
the electricity market. This means that a scenario with low electricity price along
with a high hydrogen price is unlikely (van Leeuwen and Mulder 2018).
The third parameter is the cost of the CO 2 emissions. CO 2 emissions cost of
e150 ton −1 would make renewable hydrogen generation cost competitive over
SMR at any natural gas to crude oil price ratio (Fasihi and Breyer 2019).
This leads to the fourth parameter which is the cost of CO 2 capture. In a
scenario where the cost of CO 2 emissions would increase, SMR operators would
be required to capture the CO 2 . This would create an extra cost estimated to be
of e0,32–1 kg −1 H 2 (van Leeuwen and Mulder 2018).
A fifth parameter is the CAPEX of electrolysers. The learning curve of the
AEC and PEMEC technologies is expected to lead to a significant CAPEX decrease over the coming years, towards a range of e500–600 kW el
−1 (Glenk and
Reichelstein 2019).
The technology efficiency improvement is the sixth parameter. A higher HHV
of up to 75% should be achieved by ongoing research and development of the
electrolytic hydrogen production technologies (Jacobs 2016; van Leeuwen and
Mulder 2018). However, its impact is limited compared to the CAPEX parameter.
A seventh parameter is the annual operating hours of the power-to-gas installation. The intensive use of the power-to-gas plant is required to cover the high
electrolyser CAPEX expenditure (Glenk and Reichelstein 2019). A power-to-gas
installation should run at least 2550 hours year −1 to be competitive in a 2030
projected European market conditions (van Leeuwen and Mulder 2018).
Finally, the eight parameter is the revenues from hydrogen. The production
from renewable electricity could justify the payment of a bonus compared to
fossil fuel-based hydrogen (van Leeuwen and Mulder 2018).
All these parameters can be influenced by policy instruments.