Techno-economic feasibility of green hydrogen in different sectors of the mexican industry

Abstract

Hydrogen produced from carbon free sources, or green hydrogen, has been identified as an important tool for the decarbonization of various industries. The aim of this study is, first, to understand the different methods of hydrogen production as well as its conventional and non-conventional uses. Then, the allowable costs of hydrogen for various industries in Mexico were determined. The allowable cost was defined as the cost at which using the green hydrogen process was equal to the cost of the conventional process for each industry. A model for calculating the levelized cost of hydrogen (LCOH) as a function of operating hours was proposed and combined with the information of the allowable costs estimated in order to evaluate if, after a certain number of operating hours, hydrogen could be produced given current techno-economic conditions in Mexico at a price equal or below its allowable cost. Alkaline electrolyzers producing hydrogen for more than 4,500 operating hours per year with electricity prices of 20 USD/MWh could reach the allowable cost for ammonia, refining and methanol industries at 2.2 USD/kgH2. Hydrogen as fuel for fuel cell vehicles can be produced below its allowable cost and be competitive against gasoline combustion engines, however hydrogen fuel cell vehicles are several times more expensive than conventional ICE cars and the cost of the fuel is not enough to compensate for the higher cost of the vehicles. Additionally, a multi-MW project for the exportation of green hydrogen produced from solar PV electricity in the state of Sonora, Mexico to California, U.S and Salina Cruz, Oaxaca was proposed in order to investigate the full supply chain of hydrogen under country-specific conditions. Several cases were studied and the levelized cost of each pathway was calculated. The model compares alkaline and PEM electrolysis, levelized costs of electricity and PPA costs estimations given the regulated tariffs of the National Electric System, and liquid hydrogen and ammonia as hydrogen carriers for transport. It was found that the least expensive pathways for hydrogen exportation was by ship using ammonia as an hydrogen carrier and produced from alkaline electrolyzers powered by on-site solar PV electricity at a final cost of 5.33 and 5.43 USD/kgH2 to California and Salina Cruz, respectively. Finally, it was evaluated if using curtailed electricity from renewable sources at a cost of 10 USD/MWh could improve the economics of such project. It was found that for every 5% of total energy consumption coming from curtailed electricity, the final cost of hydrogen only decreased by around 1%. In the future, costs reduction of electrolyzers and improved capacities of ships will be crucial for the reduction of final costs of green hydrogen.