Quantifying key economic uncertainties in the cost of trading green hydrogen
Summary: In a fully decarbonized global energy system, hydrogen is likely to be one of few energy vectors that can facilitate long-distance export of renewable energy. However, because of divergent literature findings, consensus is yet to be reached on the total supply chain costs of shipping hydrog...
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Elsevier
2025-05-01
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| author | Cameron Aldren Nilay Shah Adam Hawkes |
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| description | Summary: In a fully decarbonized global energy system, hydrogen is likely to be one of few energy vectors that can facilitate long-distance export of renewable energy. However, because of divergent literature findings, consensus is yet to be reached on the total supply chain costs of shipping hydrogen either as a cryogenic liquid or ammonia. To this end, this article presents a detailed process systems-based economic analysis of a typical hydrogen value chain in 2050, employing the method of elementary effects to quantify the effect of uncertainties. With expected landed costs for liquid hydrogen of $4.60 kg−1(H2) and ammonia of $3.30 kg−1(H2), the importance of uncertainty quantification is demonstrated, given that specific parametric combinations can yield landed costs below $2.50 kg−1(H2). Given our delivered hydrogen cost of $4.70 kg−1(H2), these results demonstrate the stark difference between the aspirations of decarbonization policy (with some countries aiming for prices below $1 kg−1 by 2050) and the present techno-economic reality. Science for society: Given disparities in renewable energy potentials across different geographies, there is increasing motivation to export energy from areas of low-cost production to those where costs are high, thereby facilitating economical decarbonization at a global scale. While the hydrogen economy promises an ability to transport renewable energy, it is currently falling short of cost targets set by policymakers, due to technological costs and inefficiencies. To transport hydrogen, there are two leading choices: physical and chemical conversion of the low-density molecule. These choices have been found to expose the value chains to distinct sources of uncertainty between equipment cost (physical as liquid hydrogen) and energy efficiency (chemical as ammonia). Ammonia was found to be more cost effective if it can be used directly (rather than being converted back to hydrogen), but there is no clear optimal choice when the ammonia is converted back to hydrogen. This serves to promote ammonia, as our research finds it to always be either cheaper or equally as expensive as liquid hydrogen. While this research projects to a net-zero 2050 scenario, there is potential for cost reductions and efficiency improvements beyond that of what is predicted by this research. Given the maturity of ammonia production technology, there are limited strides to be made in improving the efficiency of its production process. However, hydrogen liquefaction is in its infancy, and given the unprecedented cost reductions seen in adjacent low-carbon technologies, such as wind turbines and electrolyzers, the capital cost for liquefaction technology could follow a similar trend. Combined with the capital sensitivity of the liquid hydrogen value chain, there is potential to exploit this trend to see a massive reduction in cost. Large cost reductions are necessary for the hydrogen economy to see deployment, so liquid hydrogen could be better poised to realize these reductions in the future. |
| format | Article |
| id | doaj-art-c37f4b5a84014ea1950fe36d1024c649 |
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| language | English |
| publishDate | 2025-05-01 |
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| series | Cell Reports Sustainability |
| spelling | doaj-art-c37f4b5a84014ea1950fe36d1024c6492025-08-20T02:29:43ZengElsevierCell Reports Sustainability2949-79062025-05-012510034210.1016/j.crsus.2025.100342Quantifying key economic uncertainties in the cost of trading green hydrogenCameron Aldren0Nilay Shah1Adam Hawkes2Department of Chemical Engineering, Imperial College London, London SW7 2AZ, UK; Corresponding authorDepartment of Chemical Engineering, Imperial College London, London SW7 2AZ, UKDepartment of Chemical Engineering, Imperial College London, London SW7 2AZ, UKSummary: In a fully decarbonized global energy system, hydrogen is likely to be one of few energy vectors that can facilitate long-distance export of renewable energy. However, because of divergent literature findings, consensus is yet to be reached on the total supply chain costs of shipping hydrogen either as a cryogenic liquid or ammonia. To this end, this article presents a detailed process systems-based economic analysis of a typical hydrogen value chain in 2050, employing the method of elementary effects to quantify the effect of uncertainties. With expected landed costs for liquid hydrogen of $4.60 kg−1(H2) and ammonia of $3.30 kg−1(H2), the importance of uncertainty quantification is demonstrated, given that specific parametric combinations can yield landed costs below $2.50 kg−1(H2). Given our delivered hydrogen cost of $4.70 kg−1(H2), these results demonstrate the stark difference between the aspirations of decarbonization policy (with some countries aiming for prices below $1 kg−1 by 2050) and the present techno-economic reality. Science for society: Given disparities in renewable energy potentials across different geographies, there is increasing motivation to export energy from areas of low-cost production to those where costs are high, thereby facilitating economical decarbonization at a global scale. While the hydrogen economy promises an ability to transport renewable energy, it is currently falling short of cost targets set by policymakers, due to technological costs and inefficiencies. To transport hydrogen, there are two leading choices: physical and chemical conversion of the low-density molecule. These choices have been found to expose the value chains to distinct sources of uncertainty between equipment cost (physical as liquid hydrogen) and energy efficiency (chemical as ammonia). Ammonia was found to be more cost effective if it can be used directly (rather than being converted back to hydrogen), but there is no clear optimal choice when the ammonia is converted back to hydrogen. This serves to promote ammonia, as our research finds it to always be either cheaper or equally as expensive as liquid hydrogen. While this research projects to a net-zero 2050 scenario, there is potential for cost reductions and efficiency improvements beyond that of what is predicted by this research. Given the maturity of ammonia production technology, there are limited strides to be made in improving the efficiency of its production process. However, hydrogen liquefaction is in its infancy, and given the unprecedented cost reductions seen in adjacent low-carbon technologies, such as wind turbines and electrolyzers, the capital cost for liquefaction technology could follow a similar trend. Combined with the capital sensitivity of the liquid hydrogen value chain, there is potential to exploit this trend to see a massive reduction in cost. Large cost reductions are necessary for the hydrogen economy to see deployment, so liquid hydrogen could be better poised to realize these reductions in the future.http://www.sciencedirect.com/science/article/pii/S2949790625000382hydrogenliquid hydrogenammoniashippingsupply chain optimizationglobal sensitivity studies |
| spellingShingle | Cameron Aldren Nilay Shah Adam Hawkes Quantifying key economic uncertainties in the cost of trading green hydrogen Cell Reports Sustainability hydrogen liquid hydrogen ammonia shipping supply chain optimization global sensitivity studies |
| title | Quantifying key economic uncertainties in the cost of trading green hydrogen |
| title_full | Quantifying key economic uncertainties in the cost of trading green hydrogen |
| title_fullStr | Quantifying key economic uncertainties in the cost of trading green hydrogen |
| title_full_unstemmed | Quantifying key economic uncertainties in the cost of trading green hydrogen |
| title_short | Quantifying key economic uncertainties in the cost of trading green hydrogen |
| title_sort | quantifying key economic uncertainties in the cost of trading green hydrogen |
| topic | hydrogen liquid hydrogen ammonia shipping supply chain optimization global sensitivity studies |
| url | http://www.sciencedirect.com/science/article/pii/S2949790625000382 |
| work_keys_str_mv | AT cameronaldren quantifyingkeyeconomicuncertaintiesinthecostoftradinggreenhydrogen AT nilayshah quantifyingkeyeconomicuncertaintiesinthecostoftradinggreenhydrogen AT adamhawkes quantifyingkeyeconomicuncertaintiesinthecostoftradinggreenhydrogen |