Use of Hydrogen in Off-Grid Locations, a Techno-Economic Assessment

Abstract

Diesel generators are currently used as an off-grid solution for backup power, but this causes CO2 and GHG emissions, noise emissions, and the negative effects of the volatile diesel market influencing operating costs. Green hydrogen production, by means of water electrolysis, has been proposed as a feasible solution to fill the gaps between demand and production, the main handicaps of using exclusively renewable energy in isolated applications. This manuscript presents a business case of an off-grid hydrogen production by electrolysis applied to the electrification of isolated sites. This study is part of the European Ely4off project (n° 700359). Under certain techno-economic hypothesis, four different system configurations supplied exclusively by photovoltaic are compared to find the optimal Levelized Cost of Electricity (LCoE): photovoltaic-batteries, photovoltaic-hydrogen-batteries, photovoltaic-diesel generator, and diesel generator; the influence of the location and the impact of different consumptions profiles is explored. Several simulations developed through specific modeling software are carried out and discussed. The main finding is that diesel-based systems still allow lower costs than any other solution, although hydrogen-based solutions can compete with other technologies under certain conditions.