Harnessing hydrogen: Economic production of e-fuels

In recent years, significant emphasis has been given to the energy transition required to mitigate climate change and restrict temperature rise below 2 degrees Celsius. Policies, regulations and initiatives have been put in place to provide encouragement and impetus to make the energy transition a reality. At the same time, technology innovators have developed various state-of-the-art solutions to address challenges across all stages of the energy transition value chain.

The path to net zero involves a combination of short-term and long-term initiatives, such as improving energy efficiency; adopting renewable energy sources; and electrification, among others. One of the most impactful initiatives to date is the shift toward sustainable or renewable fuels.

Hydrogen opportunity

Hydrogen, being a carbon neutral molecule, produces zero emissions when burned or used as fuel. When produced using fossil fuel free process, green hydrogen, a compelling option in the push to achieve net-zero emissions. 
The direct use of hydrogen has matured in some sectors while several other sectors are still under development.

Currently, these sectors are considered challenging for decarbonisation through direct use of hydrogen due to various operational and safety aspects. Hard-to-abate sectors, such as the maritime sector, can achieve decarbonisation through hydrogen derivatives such as ammonia or methanol, while the aviation sector can benefit from sustainable aviation fuels (SAF) for its decarbonisation efforts. However, due to hydrogen’s extremely low molecular weight, handling it safely can be challenging – especially in terms of transportation and storage.  

The industry has explored several options for low-risk transport, with converting the gas into a liquid found to improve its ability to be transported, especially across border or over long distances. Cryogenic liquefaction, carriers such as ammonia, or utilisation of liquid organic hydrogen carriers (LOHCs), are proving attractive. Carriers are then converted back into hydrogen for direct use through specific technologies. However, significant energy is lost during this conversion process from hydrogen carriers back to hydrogen, negatively impacting the economics.

Economics

The production of hydrogen and its derivatives is facing significant economic challenges, and as the economic viability of producing hydrogen derivatives depends on the cost-effective production of hydrogen, derivative production facilities are complex and capex intensive. Overall facility optimisation is crucial for economical production alongside other key drivers, such as supply chain optimisation.

A typical hydrogen and derivatives production plant is shown in Figure-1. 

Production challenges

The following challenges and constraints should be addressed when harnessing renewable power through electrolysis technology to produce green hydrogen and its derivatives:

• Identifying the optimum capacity utilisation factor (CUF) and addressing the intermittency of renewable power.
• The CUF for solar or wind is fixed for a given location. However, for a combined solar and wind facility, achieving a satisfactory CUF requires identifying the optimal mix. It is important to note that these facilities are highly capex intensive.
• Energy storage is essential to address the renewable energy production intermittency, therefore identifying optimal capacity is crucial. The storage requirement is often large and represents another capex intensive element. While costs have reduced significantly in recent years, energy storage still contributes heavily to overall capex and production costs.
• Identifying the optimum CUF of the electrolyser. The CUF of the electrolyser depends on the upstream and downstream facilities, as well as the overall economics of the integrated facility. Therefore, identification of CUF is complex and requires thorough investigation. 
• Identifying the optimum capacity of a hydrogen derivative production plant. Although hydrogen derivative production facilities are not capital intensive, overcapacity in such facilities directly leads to overcapacity in front-end systems, such as electrolysers, power and hydrogen storage, and other feedstock units such as nitrogen or carbon-dioxide (CO2) capture plants, and balance of plant (BOP) systems. This in turn, significantly increases the overall capex meaning identifying the optimum CUF of hydrogen derivative plants is crucial.
• Optimisation and integration of BOP systems. The BOP system contributes significantly to the overall capex, therefore optimisation and further enhancements through integration become crucial for reducing capex and improving production economics.

All the above factors influence the economics of production greatly. Additionally, other technical challenges also persist which further impact the overall production economics:

• Integration strategy of electron-to-molecule production facilities.
• Managing the intermittency of renewable power across the entire facility.
• Managing the capability boundaries and limitations of each unit, such as the electrolyser, hydrogen storage, hydrogen derivative plant, nitrogen generation plant or CO2 capture plant, and BOP systems.
• The dynamic capability of technologies and their susceptibility to fatigue, meaning design and integration of the system respecting fatigue cycle is crucial for optimisation. This aspect may vary from one technology licensor to another.

Balancing the production eco system

The operational strategy of an integrated process facility – starting from the electron and progressing to the molecule – will facilitate optimisation. The concept of plant design, integration and optimisation should be practicable and implementable to ensure this reflects how the overall plant is designed to be operated and controlled, with each unit of the integrated complex having its own operating boundaries. The integration of every unit must respect the individual capabilities and limitations.

There is an opportunity to incorporate innovation into optimisation to make the business case more attractive and economically favourable. An integrated dynamic model with sufficient capability and flexibility can effectively facilitate various optimisation strategies for the integrated plant, from the electron to the molecule.

Typically, derivative production plants are a catalytic conversion process. The processes involved in molecule production normally operate under high temperature and high-pressure conditions. The overall technology is built on multiple units of operations and processes with limited operational flexibility, particularly when addressing intermittency. Therefore, understanding their capabilities and limitations is essential for effective integration with upstream processes. Expanding these capability boundaries through innovation presents the most sensible approach to achieving further optimisation.

Configuring the process: integrated dynamic model

Typically, the following key units are involved in a hydrogen derivative production plant. An ammonia production facility is considered here as an example, however the same principles can be applied to e-methanol, liquid organic hydrogen carriers (LOHCs) or sustainable aviation fuel (SAF) plants as well.

Typical key units

•    Renewable facility 
•    Energy storage system
•    Hydrogen production using electrolysis technology
•    Hydrogen storage and compressor
•    Ammonia production facility (ammonia loop)
•    Nitrogen generation unit to supply ammonia production

Worked example: ammonia

The operations of these units can be envisioned under various options for the following operating modes, as detailed in table 1:

A visual representation of the above combinations is presented in Figure 2, below:

Multiple combinations of integrated operating scenarios are possible; three straight options are shown in the table, which are:

• Option 1: Complete dynamic operations of all the units, which facilitates minimal storage requirements
• Option 2: Complete stable operations of all the units, except renewable power, this scenario requires maximum storage capacity
• Option 3: Staged operation of major units, except renewable power and hydrogen storage

Combining these options across all the units results in numerous possible scenarios. An integrated approach along with insights of all units across the value chain will identify the most practical solution. Some combinations can be eliminated qualitatively, after which quantitative evaluations are necessary to determine the optimal solution.

Optimisation objective

A particular project may encompass various optimisation objectives, such as:

1. Best combination of solar and wind energy generation
2. Targeted production of hydrogen or its derivatives
3. Minimum hydrogen storage
4. Minimum power/energy storage
5. Minimum Capex of the overall facility
6. Minimum levelised cost of energy/hydrogen/hydrogen derivatives

One targeted objective should be prioritised to obtain a unique solution from all possible scenarios. However, a quantitative analysis can be carried out which combines multiple objectives and illustrates the optimal solution. 

For instance, objective (b) can be grouped together with (a), (c), and (d), with  one objective fixed and the other elements treated as variables. To understand the sensitivity of each objective, separate scenarios should be modelled with comparisons drawn that identify the optimal approach.

Modelling approach

In the integrated dynamic model, the typical key units (as listed above) are included due to their significant economic contribution to the overall capex and, consequently, the production cost.

The aim is to develop a solution for an integrated production facility that accounts for all the challenges and constraints, such as technology, the capability boundaries of each unit, capital costs, product capacity and desired product specifications.

The integrated dynamic model has the capability to review production scenarios, perform sensitivity analysis, and help in identifying optimal solutions that can be practically implemented.  

Insights that deliver confidence

The valuable exercise of integrated dynamic modelling is performed to identify the unique and implementable solution while satisfying the optimisation objective. The output of the model will identify the following:

• Configuration of the integrated facility,
• High-level operation and control strategy of the integrated facility,
• Possible innovation opportunities in the process configuration and integration
• Optimum capacity of units within the integrated facility,
• The final output of objective functions, such as levelised cost, and Capex
• Understanding the sensitivity of each major unit in relation to the objective function.

Support for developers

Our bespoke integrated dynamic modelling tool provides insight to the best-fit solutions for hydrogen and e-fuel developers. With decades of experience in solving fuel development challenges and process implementation, organisations can benefit from reliable calculations and guidance from our team of technical experts.