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Levelized Cost of Green E-Fuels

Hydrogen is a versatile energy carrier with a wide range of uses and unique attributes, especially for energy sectors that are hard to electrify with renewable resources but can be made greener through sector coupling. If Green Hydrogen is technically a key enabler of decarbonization, then the next step or barrier to break is economics. This translates to: how much does Green Hydrogen and Derivative E-Fuels cost to produce and how to calculate that as well as analyze pathways of cost reduction? A financial model toolkit for analyzing levelized cost of Green Hydrogen & derivatives becomes necessary. This article sheds light on the updated estimated cost of green e-fuels in 2030, covering e-Ammonia, e-Methanol and e-Kerosene (e-SAF).

Dii developed six versions/models to analyze levelized cost of green hydrogen and derivatives:

  • LCOH Financial Model Toolkit V5A – Green H2 Production
  • LCOH Financial Model Toolkit V5.2 – Global Green H2 Cost Optimization VOT-BFT Model™
  • LCOH Financial Model Toolkit V6A – Green H2 Production & Delivery Infra Pathways
  • LCOA Financial Model Toolkit V7B – Green NH3 Production & Storage
  • LCOM Financial Model Toolkit V8A – Green e-Methanol Production & Storage
  • LCOK Financial Model Toolkit V9A -Green e-Kerosene Production & Storage

The six versions modular approach is intended to:

  • Verify costs at each stage of the process
  • Piecemeal manageable iterative approach
  • Identify cost optimization priorities & opportunities
The models come packed with unique features:
  • Get exclusive market analysis & benchmarking data for Levelized Cost of Green Hydrogen / Green Ammonia / Green e-Methanol Green e-Kerosene
  • Obtain the best of all worlds assembled from over 50 best in class models for LCOH/LCOA/LCOM/LCOK in the market.
  • A quick yet very effective holistic approach methodology to determine levelized costs of green molecules.
  • Capture all life cycle costs and assess project feasibility.
  • A detailed analytical dive into optimizing costs as well as performance parameters.
  • Utilize powerful and comprehensive sensitivity analysis scenarios.
  • User-friendly design with guideline, rich visuals & charts, printable 17-page report.
  • Toolkits are available on a Software as a Service (SaaS) basis.
  • Native model toolkits files (xls) are available as commercial product.
  • Download sample pdf reports at: download link provided upon request
For estimating the levelized cost of green e-fuels in 2030, the models utilized the following key assumptions:
  • Plant Lifecyle: 20 years
  • Plant Economies of Scale: 1 GWe Electrolyzer
  • WACC: 6.4%
  • Renewables Electricity Cost: USD 2.5 cent/kWh
  • Electrolyzer Capacity Factor: 70%
  • PtL Synthesis Process
    • E-Ammonia: Haber Bosch
    • E-Methanol: Direct H2+CO2 Synthesis
    • E-Kerosene: Fischer Tropsch
  • Costs Reference Year: 2030
  • ALK Electrolyzer Cost (Stack+BoP): $560/kWe
  • Plant Total Installed Cost (Electrolysis + Synthesis)
    • E-Ammonia: $1.61B
    • E-Methanol: $1.40B
    • E-Kerosene: $1.48B
  • CO2 Source: Biogenic / Industrial CCS
  • CO2 Cost: $120/t
  • ALK Electrolyzer Stack Replacement: 10 years
  • Water Cost: 3.5 $/m3
Based on these assumptions, Dii ran the models, and the following is a summary of results for e-Ammonia, e-Methanol and e-Kerosene (e-SAF).

Green E-Ammonia LCOA Model

Green E-Methanol LCOM Model

Green E-Kerosene (e-SAF) LCOK Model

Takeaways

  • Green E-Fuels are vital for NetZero 2050
  • Challenges that are critical for bankable projects development:
    • Create foreseeable demand via a combination of policy and economic tools
    • Establish risk-balanced long-term offtake agreements
    • Bridge the green e-fuel price gap against grey fuel by pricing GHG at true cost of damage potential
    • Institute clear long-term guarantees of origin / standards / policy / regulatory environments
    • Form harmonized overall plant performance guarantees
    • Enhance e-fuels synthesis processes operational flexibility to better couple with renewables generation
  • Global warming and climate change are real. The true cost of GHG is steadily rising via “new normal” extreme weather events. GHGs need to be priced based on their irreversible damage potential and threat to humanity well being

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