Techno economic model to analyze the prospects of hydrogen production in Colombia

Abstract

The production of green hydrogen is a key factor for decarbonization, and increasing its production is a strategy of great importance to diversify the electricity sector and solve the problems of meeting the demand for electricity caused by the constant growth of the world's population. However, hydrogen production has not been actively pursued due to the high capital investment required. To ensure the economic sustainability of green hydrogen production, in addition to finding the optimal combination of renewable energy sources, geographical location, suitable climatic conditions and water electrolysis technologies, it is necessary to find the right financing structure and fiscal policy. In this study, combinations of three types of renewable energy sources, such as offshore wind, onshore wind, and solar photovoltaic, in conjunction with PEMWE and AWE have been thoroughly investigated to determine the technical and economic feasibility of green hydrogen production. In this study, realistic calculations have been made using meteorological information from databases such as NASA and IDEAM, with measurements in a one-year time window, and based on this, the estimated electrical energy produced is calculated using a mathematical model. With this result, hydrogen production is determined, which, integrated with the financial variables, determines the economic viability. In addition, a sensitivity analysis was performed to evaluate the impact of each component on the LCOH price. As a result of the calculations, the onshore wind AWE case has the lowest LCOH at 7 USD/kg, while the offshore wind PEMWE case has the highest LCOH at 9.69 USD/kg. On the other hand, at 12 USD/kg, the payback period is lowest for onshore wind AWE at around 7 years, and for offshore wind AWE and PEMWE at more than 25 years. The sensitivity analysis shows that the renewable energy capacity factor is the most influential aspect on the LCOH, followed by the CAPEX, the OPEX and financing rate. This study lays the foundation for the development of a methodology to identify the most efficient system for green hydrogen production through water electrolysis, prioritizing the use of renewable energy sources and promoting decarbonization. In turn, the development of green hydrogen projects in Colombia accelerates compliance and the entry of multi-Latin companies focused on the ESG index.