A Techno-Economic Study for Off-Grid Green Hydrogen Production Plants: The Case of Chile

• Published in: Energies (Basel) 2023-07, Vol.16 (14), p.5327
• Main Authors: León, Marcelo, Silva, Javier, Ortíz-Soto, Rodrigo, Carrasco, Samuel
• Format: Article
• Language: English
• Subjects: Air quality management; Alternative energy sources; Analysis; Capital costs; Capital expenditures; Carbon dioxide; Climate change; Cost analysis; Desalination; Economic indicators; Electricity generation; Electrolysis; Emissions; Emissions (Pollution); Energy industry; Energy resources; Financial analysis; Green hydrogen; Hydrogen; hydrogen economy; production cost; Production costs; Renewable resources; renewable sources; Solar energy; Sustainable development
• ISSN: 1996-1073; 1996-1073
• DOI: 10.3390/en16145327

In this study, we present a pre-feasibility analysis that examines the viability of implementing autonomous green hydrogen production plants in two strategic regions of Chile. With abundant renewable energy resources and growing interest in decarbonization in Chile, this study aims to provide a comprehensive financial analysis from the perspective of project initiators. The assessment includes determining the optimal sizing of an alkaline electrolyzer stack, seawater desalination system, and solar and wind renewable energy farms and the focus is on conducting a comprehensive financial analysis from the perspective of project initiators to assess project profitability using key economic indicators such as net present value (NPV). The analyses involve determining appropriate sizing of an alkaline electrolyzer stack, a seawater desalination system, and solar and wind renewable energy farms. Assuming a base case production of 1 kiloton per year of hydrogen, the capital expenditures (CAPEX) and operating expenses (OPEX) are determined. Then, the manufacturing and production costs per kilogram of green hydrogen are calculated, resulting in values of USD 3.53 kg−1 (utilizing wind energy) and USD 5.29 kg−1 (utilizing photovoltaic solar energy). Cash flows are established by adjusting the sale price of hydrogen to achieve a minimum expected return on investment of 4% per year, yielding minimum prices of USD 7.84 kg−1 (with wind energy) and USD 11.10 kg−1 (with photovoltaic solar energy). Additionally, a sensitivity analysis is conducted to assess the impact of variations in investment and operational costs. This research provides valuable insights into the financial feasibility of green hydrogen production in Chile, contributing to understanding renewable energy-based hydrogen projects and their potential economic benefits. These results can provide a reference for future investment decisions and the global development of green hydrogen production plants.