It is vital to size these building blocks at an early phase of the project so it is techno-commercially feasible. Green hydrogen must overcome significant barriers to be widely produced and adopted While there are several barriers to green hydrogen production and adoption, the key challenges are: Intermittency and availability of renewable power : Green hydrogen production is complex, in part, because of renewable power’s intermittency. It does not offer a similar inertia to the grid as conventional generation. Intermittent renewables disrupt conventional methods for planning the electric grid’s daily operations. Renewables’ power fluctuates over multiple time horizons. This fluctuation sometimes forces the grid operator or project developer to adjust their day ahead, hour ahead, and real-time operating procedures. This is why simulating power generation coupled with hydrogen processes is an important step. Levelised cost of hydrogen: Despite widespread enthusiasm for green hydrogen, adoption still does not make good financial sense in many cases, mainly because of the high cost of supplying renewable electricity and the cost of capital. There are consistently high wholesale market power prices across Europe, and an expectation that these high prices will continue for most of the decade. Higher capital costs are not only impacting the financing of electrolysers and the power infrastructure itself, but also the cost of supplying off-grid renewable power as an alternative to the high wholesale market power prices. These factors have led many projects to now forecast an LCOH that may not support a positive business case. Supply optimisation and production forecast: The combination of renewable intermittency challenges and the pressure to reduce the LCOH may lead project developers to adopt different operating strategies and hybrid business cases, which can introduce substantial green hydrogen forecasting challenges. In addition, hydrogen transportation requires hydrogen to be coupled with a carrier, such as green ammonia or methanol. This process is complex and requires a constant flow of
hydrogen and a reliable forecast so that the process can be controlled. With so many variables, intermittency, and multiple operating strategies, the project developer needs to implement integrated operating and financial models. Power and processes simulations and control strategies help overcome these challenges It is vital to have an integrated simulation, control architecture, and pre-defined control strategy. They must optimise the design and operating costs while also supporting safe and reliable operations. Modelling saves time and money by optimising design: An integrated and unified power and process simulation model simplifies plant design and improves operations. Integrated power, process, and economic modelling allow a project developer to visualise the key design risks at the early stages of the project. This involves multiple steps, including creating a base model, testing scenarios, and creating an optimised model. Integrated modelling not only helps ensure a fully optimised design but also provides a substantial improvement in Capex/Opex. The tools selected for modelling must be scalable and convertible from a low-fidelity model at the early stages of the project to a high-fidelity model at FEL-2 (scope development and conceptual engineering)/ FEL-3 (front-end engineering designt, FEED). The model should converge into both a detailed control strategy and a detailed control architecture. This approach allows project developers to retain the original models, on an original basis, from Day 0 of the project until the end of operations. Techno-commercial modelling helps determine if a project is financially feasible: A number of economic parameters – the levelised cost of electricity (LCOE), LCOH, levelised cost of ammonia (LCOA), and internal rate of return (IRR) – are key to securing the final investment decision (FID) for a green hydrogen project. The economic parameters are directly linked to the technical design and multiple operating scenarios. Without having a high-fidelity model, calculating the accurate Capex and Opex
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