Techno-economic study of a power-to-hydrogen system in offshore wind energy

The increased demand for carbon neutral energy provision has led to a rise in installed renewable energy, especially offshore wind capacity is increasing for countries adjacent to the North Sea. An energy hub has been proposed and elaborated by the North Sea Wind Power Hub consortium. This study determines the business case for offshore hydrogen production on an energy hub. The main components taken into account are the island, wind farms, electrolyzer system, electricity submission by cables and gas transport by pipelines. To determine the business case for this entire system, the Wind Hydrogen Simulation (WHS) model is created to size the system and to determine the total costs for each component for installed wind capacities of 12 and 20 GW. One of the operation modes tested is the market optimized mode, loading the electrolyzer if the electricity is cheap and thus the smoothed EPEX spot price is low (see Figure 1). This operation mode is tested for different wind and stack capacities, sizing the systems cable and pipeline capacity. The results are displayed by calculating the levelized cost of energy of the system (LCOE), the net present value (NPV) and the system pay-back period (PBP). Main findings are that the addition of hydrogen conversion increases the LCOE because the investment costs (CAPEX) are higher and due to energy losses in the electrolyzer less energy is delivered to shore. Nevertheless it can improve the NPV and PBP of an offshore wind system. Furthermore, opportunities for reducing the total system costs have been proposed and further research topics are suggested which could possibly enhance the profitability of hydrogen production on an island in the North Sea.