Analysis of the levelized cost of green hydrogen production for very heavy vehicles in New Zealand

Abstract

<p>This study examined the feasibility of green hydrogen as a transport fuel for the very heavy vehicle (VHV) fleet in New Zealand. Green hydrogen is assumed to be produced through water electrolysis using purely renewable energy (RE) as an electricity source. This study chose very heavy vehicles as a potential market for green hydrogen, because it is considered “low- hanging fruit” for hydrogen fuel in a sector where battery electrification is less feasible. The study assumed a large-scale, decentralized, embedded (dedicated) grid-connected hydrogen system of production using polymer electrolytic membrane (PEM) electrolysers. The analysis comprised three steps. First, the hydrogen demand was calculated. Second, the additional RE requirement was determined and compared with consented, but unbuilt, capacity. Finally, the hydrogen production cost was calculated using the concept of levelized cost. A sensitivity analysis, cost reduction scenarios, and the implications for truck ownership costs were also undertaken. The results indicate an overall green hydrogen demand for VHVs of 71 million kg, or 8.5 PJ, per year, compared to the 14.7 PJ of diesel fuel demand for the same VHV travelled kilometres. The results also indicate that the estimated 9,824 GWh of RE electricity from consented, yet unbuilt, RE projects is greater than the electricity demand for green hydrogen production, which was calculated to be 4,492 GWh. The calculated levelized hydrogen cost is NZ$ 8.42/kg. Electricity cost was found to be the most significant cost parameter for green hydrogen production. A combined annual cost reduction rate of 3% for CAPEX and 4% for electricity translates to a hydrogen cost reduction of 30% in 10 years and more than 50% in 20 years.</p>

Transitioning to a Hydrogen Future: Analyzing Demand and Supply Dynamics in New Zealand's Transportation Sector

“…Polymer electrolyte membrane (PEM) electrolyzers, which address these issues, are anticipated to grow in prominence (Bermudez & Hannula, 2021). Both the type of electrolyzer and renewable electricity sources influence the energy needed for hydrogen production (Perez, 2020). Water electrolysis, which divides water into hydrogen and oxygen using electricity, yields no carbon emissions.…”

“…The weight and charging restrictions of BEVs curtail their freight capabilities (Concept Consulting, 2019). Furthermore, FCEVs' refueling infrastructure mirrors that of conventional fuel systems (Perez, 2020), offering familiarity and ease. Despite the initial high costs, the practical benefits of FCEVs suggest a promising return on investment.…”

“…These figures do not account for market fluctuations or potential subsidies. Refueling times for both hydrogen and diesel trucks are roughly 7 min, with hydrogen trucks having a range of 400 km per 30 kg tank without significantly affecting weight (Perez, 2020).…”

“…In essence, a relatively small increase in hydrogen market share could lead to meaningful emissions reductions, negating the need for a vast portion of the production mix to come from low-carbon methods. Closer to home, a NZ study by Perez (2020) zeroed in on hydrogen demand for VHVs, those weighing over 30 tons. Using data from MBIE reports, the study projected an annual green hydrogen demand of 71 million kg for VHVs.…”

“…Therefore, the overall demand was projected to remain very low in scenario 1 and quickly rose during scenario 2 and reached the highest level in scenario 3 (see Figure 6). Liu et al (2012) and Perez (2020) differ in their approach to hydrogen demand. Perez evaluates the potential of hydrogen as an alternative to diesel, whereas Liu assesses the shift to hydrogen FCVs based on yearly new vehicle sales.…”