Techno-economics of offshore wind-based dynamic hydrogen production

Given the urgent need to accelerate all renewable energy capacities for hydrogen production, this study undertakes a techno-economic analysis of dynamic hydrogen production using offshore wind energy under “slow progress” and “fast progress” scenarios. To ensure a reliable wind power generation profile and to avoid overestimating output power, the study takes into account significant impacts of air density and wind plant-level losses, including wake effect and turbine performance losses. The economic modelling incorporates costs associated with wind turbines, foundations, submarine connections, offshore substations, and installations. For modelling the system of electrolysis, a dynamic power-dependent efficiency representing PEM technology is employed. To reflect the influences of a realistic project on the estimation of the levelised cost of hydrogen (LCOH), economies of scale and learning rate models are incorporated. Australian offshore wind locations are selected as a case study for implementing the model because of the enormous available wind resource. The findings indicate that the variable nature of input power has a meaningful impact on the yearly average energy consumption of the electrolysis system. Comparing the scenarios, it becomes evident that rapid scaling up is required to achieve a cost-competitive LCOH in the coming decades. Should interest rates and thus costs of capital return to the levels closer to pre-pandemic levels, the LCOH level of below AUD3/kg (USD2/kg) can be achieved under the “fast progress” scenario in two Australian offshore wind locations by around 2040.