New Analysis: Technoeconomics (TECH) – Blue Hydrogen
For achieving “net-zero” emissions by 2050 for constraining global temperature rise to 1.5 to 2.0 degrees Celsius (°C), negligible or minimal (low) carbon hydrogen is receiving much attention. Different types of hydrogen are based on a color palette defined by environmental footprint and impact include grey, blue, green, brown, and others. For blue hydrogen, the specific objectives of this TECH Report are to:
Increase awareness and disseminate information
Review viable pathways, evaluate status of commercially advanced technologies and processes, key methodologies for determining costs and tech-economics, and high-level market roadmap with review of main market drivers
Review and evaluate case studies based on existing projects and proposed projects
Commercial Technologies
Steam methane reforming (SMR) is the predominant commercial process technology followed by autothermal reforming (ATR) for large-scale blue hydrogen production and CO₂ capture is essential. Natural gas continues to be dominant feedstock for both processes. Key take-aways from technology providers and process licensors’ options and configurations indicates good potential for high percentage of CO₂ capture via specific combinations of; 1) pressure swing absorption (PSA), 2) syngas wash process, and 3) flue gas wash process. A detailed review and evaluation are provided for blue hydrogen with respect to CO2 and GHG emissions, overall GHG footprint, and sensitivities with respect to CO₂ emissions and fugitive methane emissions.
Process Economics
Based on technology advances and cost reductions, blue hydrogen projects are cost-effective, especially integrated with CO₂ capture and sequestration (CCS), or where national and state level subsidies or incentives are utilized. However, blue hydrogen projects bring new challenges to costs and techno-economic analysis. Projects can potentially deliver a range of end-use applications that may not always be easy to quantify, or even possible to value and monetize. CO₂ capture percentage is viewed as a techno-economic optimization and not a technical challenge. Key take-away is that for optimum balancing of CO₂ capture from a blue hydrogen plant, not only direct CO₂ emissions but also indirect emissions must be considered. NexantECA’s cost of production (COP) estimates for U.S. Gulf Coast (USGC), Western Europe, and China indicate COP for syngas production USGC has lowest COP due to the region’s low natural gas prices. COPs for CO (and CO₂)/hydrogen production indicate USGC has lowest COP due to the region’s low syngas/natural gas costs and utilities cost. Comparative techno-economics for grey, blue, green hydrogen projects is shown in the figure below. Led by SMR and ATR processes, the levelized cost of hydrogen (LCOH) price difference between grey and blue hydrogen is predicted to narrow with lower cost natural gas prices and decline in cost of CO₂ capture. Also, the LCOH varies in different geographies as a function of natural gas price, electricity costs, renewable power resources, and infrastructure.
NexantECA Comparative Techno-Economics for Projects
Commercial Overview
A high-level market roadmap with key drivers and trends indicates a combined blue and green hydrogen decarbonization scenario can potentially achieve lower average LCOH than either blue-only or green-only scenarios. Combined scenario potentially results in a LCOH less than $2.0 per kg which is lower than either of the green-only or blue-only scenarios. A combined blue and green hydrogen scenario also make it potentially easier to develop a “hydrogen economy”.