Techno-economic Pricing model for Carbon Neutral Fuels as Seasonal Energy Storage

Abstract: Green hydrogen produced through electrolysis of excess renewable energy is a promising seasonal energy storage solution with the potential to decarbonize the energy sector. However, it has physical properties that make it difficult to store and transport on a large scale for grid scale storage applications. An alternative to storing excess renewable energy in hydrogen is converting the hydrogen to synthetic fuel that has an industrially mature production process and an established transportation, storage and distribution infrastructure. This study aims to conduct a feasibility analysis to compare the cost and compatibility of green hydrogen, ammonia, methane and methanol as seasonal energy storage. The production of each fuel and the barriers to their commercialization as energy vectors is discussed. The hydrogen storage technologies holding the most potential are identified as salt cavern and lined rock cavern storage however type I-IV pressure vessel storage is also included in the analysis due to its prevalence within the industry The outcome of the study is a conceptual model calculating the levelized cost of storage of each fuel considering the storage system size, compression energy required and annualized CAPEX and OPEX of compression and storage. Three cases are developed to analyse the storage system, A- seasonal discharging, B-weekly discharging and C- daily discharging. The results identify that the most feasible seasonal storage option for hydrogen is utilizing a salt cavern. If building a salt cavern is infeasible due to geographical constraints, a lined rock cavern is more cost-effective as compared to utilizing pressure vessel storage. For shorter storage periods or smaller scale applications it is more beneficial to employ low pressure (200-300 bar) pressure vessel storage since geological storage becomes expensive as compared to the seasonal case. Low pressure storage is better suited for smaller applications as compression costs account for a significant share of the total annual cost of each storage system in the weekly and daily cases. The most suitable hydrogen storage option is highly dependent on the end use application. Overall, methanol storage provided the lowest levelized cost of storage in all scenarios.