The economic potential of hydrogen as energy buffer for fluctuations in the production of wind and solar energy

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The economic potential of hydrogen as energy buffer

for fluctuations in the production of wind and solar

energy

Bachelor Thesis - Future Planet Studies

Figure 0: Hydrogen storage

Author:

Marieke Hooimeijer

Supervisors:

Prof. dr. Gert Jan Kramer

Dhr. dr. A.C. (Harry) Seijmonsbergen

Mr J. (Jim) Groot MSc

Date:

30/05/2021

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Abstract

The transition from fossil fuels to renewable energy in the coming decades must lead to an energy system that will be clean, affordable and reliable. This clean energy mostly comes from wind and solar energy which have been steadily increasing in the Netherlands. We must however take into account that wind and solar energy is intermittent and will not always be able to meet our fluctuating energy demand. An energy buffer is required in order to store excess capacity, for example hydrogen gas. In order for hydrogen to be a viable buffer, large quantities of solar and wind capacity are needed. Building excess capacity in the Netherlands is however very costly due to reduced land availability and relatively low solar irradiation. Morocco, like other North African countries, has a significant renewable energy potential in the form of wind and solar. In this research, the economic potential of importing hydrogen from Morocco to the Netherlands as seasonal storage for both wind and solar energy is assessed. A Hydrogen-to-power model is used to calculate how much hydrogen can be produced with Morocco’s planned capacity power of wind turbines and solar panels in 2030, based on electrolyser scenarios and their return on investment.

This study found 3.9% as highest return on investment based on a CAPEX of 1000$/kW installed electrolyser capacity, and therefore does not show a good economic viability although economic benefits should not be the only factor in deciding climate change mitigation measures. H2P production in Morocco could however become

economically viable at a CAPEX of 630$/kW. If the cost drops even further, then more and more capacity can be built economically. Of the scenarios considered in this thesis, the scenario with the largest installed capacity requires a cost per 1000kW of 309$/kW to make this an attractive investment case.

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Introduction

The transition from fossil fuels to renewable energy in the coming decades is of utmost importance for the reduction of greenhouse gas (GHG) emissions (Child et al., 2018). This transition must lead to an energy system that will be clean, affordable and reliable. This reliability of energy in the Netherlands is currently provided by fossil fuels, namely natural gas (CBS, 1). Natural gas accounts for a significant part of energy use with a 41.2% share in 2017 (Speirs et al., 2018). In recent years, the share of wind and solar energy has been steadily increasing in the Netherlands, and there are plans to expand these forms of

energies much further before 2030 (Statista, 2019; CBS, 2; Rijksoverheid). Although growing, the share of solar and wind energy are still small, encompassing only 2.8% of total end use in 2019 (CBS, 2). Furthermore, as a densely populated country, the Netherlands is held back by its lack of space and high land prices as well as its relatively low solar irradiation

(Levkovich et al., 2018; Moraitis et al., 2018).

We must also take into account that wind and solar energy is intermittent and will not always be able to meet our fluctuating energy demand. Clean ways of providing energy storage as a buffer must be introduced in order to bridge the gap between energy

production and demand. Currently, the role of energy buffer is played by fossil fuels, yet in order for the Netherlands to reach their climate goals of a low-carbon economy, GHG emissions will have to be reduced by 49% in 2030 compared to 1990 and by 95% in 2050 (EZ, 2016).

Morocco, as other North African countries, has an important renewable energy potential in the form of wind and solar. Firstly, Morocco has a high number of sunshine hours, estimated between 2700 and 3500 annually. Solar irradiation is also relatively high, with 5.3 kWh/m2/day (Azouzoute et al., 2020). Secondly, Morocco has a long coastline of 3500 km with a high average wind speed of 10 m/s (Allouhi et al., 2017; Hajjaj et al., 2018). Thirdly, as opposed to the Netherlands, Morocco has a lot of unused space where the costs of land area are lower than in Europe (Bisaro et al., 2019). After all, the Netherlands only encompasses an area of 41,543 km² compared to the 446,550 km² of Morocco, although the Dutch electricity consumption in 2019 was 116.9 TWh compared to Morocco’s 34.6 TWh in 2019 (IEA,1). This makes the import of energy from Morocco to the Netherlands a promising option for both countries.

In what form could we import this energy? The most common method of storing energy (especially with solar energy) is currently the battery. Since the first modern battery was invented by Volta in 1800, many technological advancements were made that have increased its efficiency to create the commonly used lead-acid and lithium-ion batteries. However, batteries have a short life cycle and have negative impacts on the environment during production and disposal such as heavy metal pollution (Wang et al., 2018). The high costs and self-discharge of batteries also makes them unsuitable for long-term seasonal storage (Puranen & Ahola, 2021; Casals et al., 2019).

A more sustainable method of storing green energy produced by wind and solar could be realized by hydrogen. The use of renewable electricity to produce hydrogen by water splitting through electrolysis may provide an alternative to batteries as storage (Awan et al., 2019). However, hydrogen is disadvantaged by its low round-trip efficiency of around 30-35% and its wide range of flammability of hydrogen-air mixtures (Pellow et al., 2015;

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5 Lewis & Von Elbe, 2012). Furthermore, hydrogen may not be cost effective currently

(Hychain, 2018), although we will explore this further in this thesis.

In this research, the economic potential of hydrogen production from solar and wind energy in Morocco is assessed. In order to properly assess this, a hydrogen production model developed by prof. dr. Gert Jan Kramer and dr. Vinzenz Koning from the Copernicus Institute of Sustainable Development at Utrecht University is utilized coupled with a review of hydrogen transport via natural gas pipelines from Morocco to the Netherlands. This review is based on a share of 10%volH2 blend with natural gas that can be added with minor

changes in infrastructure and negligible safety risks (Timmerberg & Kaltschmitt, 2019). Dr. Kramer’s Hydrogen-to-power model will be used to calculate how much hydrogen can be produced with Morocco’s planned capacity power of wind turbines and solar panels in 2030, as well as various electrolyser scenarios and the return on investment (ROI). ArcGIS is used to visualize the transport of hydrogen from Morocco to the Netherlands.

The main research question of this project is:

What is the economic viability of the production of green hydrogen in Morocco in 2030 for use as an energy buffer in the Netherlands?

In order to answer this question, multiple sub-questions are presented:

1. What is the power generation capacity for solar and wind energy in Morocco in 2030?

2. What is the excess capacity that can be used to generate hydrogen?

3. What are the current economic parameters around hydrogen electrolysers? 4. What future cost reduction needs to be achieved in order to make hydrogen

production a viable investment?

5. What existing infrastructure can be used to transport hydrogen from Morocco to the Netherlands?

First, the methods will be presented including data collection and analysis for the H2P model. Then the results will be presented, with a thorough interpretation of these results and its limitations in Discussion. Finally, a brief conclusion will be given based on the results and discussion.

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Methods and data

In this research, the potential of hydrogen as a buffer to bridge the gap between high and low production of both wind and solar energy is assessed. Furthermore, hydrogen transport via natural gas pipelines is reviewed.

Excel and ArcGIS Pro are used to investigate the research question. Excel is used to find the potential of hydrogen as buffer based on Morocco’s goals for power production in 2030. The economic potential of hydrogen as a buffer option will be based on the return on investment (ROI) and on various electrolyser capacity scenarios. In this section, an overview of the methods will be given.

Power generation capacity for solar and wind energy in Morocco in 2030

In this research, data from a Photovoltaic Geographical Information System (PVGIS) using a PV performance tool by the EU science hub was used. The specifications are below in Table 1.

Specification Input Reasoning

Type of data Hourly solar in W

Hourly wind at 10m height in m/s Hourly data is needed as input for the model.

Area Rabat, Morocco This is a typical area in

Morocco with wind turbines as well as solar panels.

Database PVGIS-ERA5 ERA5 has been shown to

be the most reliable form of satellite data (Huld et al., 2017).

Slope 33.952° Aimed towards south.

Azimuth 0 Will be explained in

Choice of azimuth. Type of solar panel Crystalline silicon type solar panel Most widely used solar

panels in Morocco. Installed peak PV power 1 kWp As a base of comparison.

Standard system loss 14% Standard system loss of

the crystalline silicon solar panel.

Table 1: Specifications on data collection for hourly wind and solar potential.

As can be seen in Table 1, the installed peak PV power is set to 1 kWp. This serves as a base of comparison since solar panels are generally compared by their kWp capacity. It is also important to note here that the solar and wind data is taken from 2016, so potential

changes in wind speed and solar irradiation in the coming decade is not taken into account. However, it is expected that these variables will not be subjected to significant changes in such a short timespan (de Jong et al., 2019).

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7 Choice of azimuth

The azimuth, which is the direction that the front of the solar panel is facing, was determined by visualising the different solar capacities throughout the day. The optimal azimuth was defined for Rabat here since it could strongly impact the power that a solar panel can generate (Ma et al., 2011). In figure 1 below, 5 different azimuth values are visualized.

Figure 1: The range of azimuth for Rabat, Morocco spread including azimuth of -90, -45, 0, 45 and 90.

It is the goal to increase the spread of power generation throughout the day because this correlates to power generation capacity. As can be seen in Figure 1, an azimuth of 0 is most preferable for Morocco as this allows for the maximum energy generation capacity on a given day (which is equal to the area underneath the line in the graph).

Wind speed

After obtaining the hourly wind speed in Morocco, it is converted to power capacity per wind turbine, using Formula 1 as according to MacKay (2008).

𝜂 ∗ 1

2∗ 𝜌 ∗ 𝑣 ∗ 𝜋 4∗ 𝑑

Formula 1: Calculation of power capacity of a wind turbine based on wind speed.

With 𝜂 as the efficiency factor (50%), ρ as the density of air (1.3 kg/m3_{), 𝑣 as wind speed}

(m/s) and 𝑑 as blade diameter, using 130m according to the most commonly used wind turbines in Morocco (Siemens Gamesa, 2019). This results in the power capacity of a wind turbine in W.

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8 Wind capacity cap

In the initial wind data, there are multiple times during which the wind energy spikes. This is due to higher wind speeds. Turbines have limited energy generation capacity, which means it cannot convert all of the wind energy during the high-wind peaks into electricity.

Therefore, a cap was implemented to eliminate unnaturally large spikes in electricity production. Below, a cap of 4 MW is implemented for wind energy according to the power rating of a typical wind turbine (Siemens Gamesa, 2019).

Figure 2: The power capacity of a single wind turbine throughout the year before and after the cap at 4 MW, used as a base unit for Wind Power.

Total power capacity

To allow an easy calculation of solar and wind energy mix, a typical yield of a 1 kWp is used as a base unit for solar, and a typical Wind Turbine as a base unit for wind (see Figure 2). Now we have base numbers, we can scale up depending on the power capacity goals, in terms of the number of solar panels with 1 kWp and wind turbines needed.

Firstly, the average of both the solar and wind data in a year is taken. Then, knowing that Morocco’s goals for 2030 are 4,560 MW for solar and 4,000 MW for wind, we can divide the goals by the average. This gives us a multiplication number expressed in the number of 1kWp solar panels and the number of wind turbines needed to reach the goals of 2030, as seen in Formula 2 below.

,

( )

=

1 kWp solar panels needed ,

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9 Formula 2: The number of 1 kWp solar panels and wind turbines needed based on the power capacity goals of Morocco in 2030.

These numbers can respectively be multiplied by each dataset for unit-intermittent energy production, thus leading to the total capacity per hour. When converting this to GW, and adding the two energy sources, we can plot the power capacity throughout the year on an hourly basis1_{(see Figure 3).}

Figure 3. The combined power capacity of solar and wind throughout the year in GW. When normalizing this data (i.e. ensuring the average of the data set is equal to 1) and ranking from highest to lowest, we can get a power duration curve as shown in Figure 4 below. Important to note here is that the normalized demand is set at 1 GW, which in the normalized state is the average of all hourly data. The electricity demand in 2018 was 141 PJ, which translates to 4.47 GW (IEA, 2018). Since the average of all hourly data of energy and solar wind generation is 8.55 GW, we assume that the demand increases from 4.47 GW in 2018 to 8.55 GW in 2030.

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10 Figure 4: Power duration curve normalized.

Excess capacity to be used to generate hydrogen

H2P Model

Dr. Kramer’s energy mix model was developed to evaluate the required size of an energy buffer to reliably supply the energy demand, given an available intermittent capacity of solar and wind at a certain geographical area. These energy buffers may be hydrogen, fossil, nuclear or a mix of these. In this study, we will only consider hydrogen.

The purpose of Dr. Kramer’s hydrogen model is to evaluate the role of hydrogen in a decarbonizing power system. It does this by using a cycle of converting power-to-hydrogen-to-power, abbreviated as H2P. It essentially takes hourly data of solar PV capacity and wind capacity during a year for a country and uses this to calculate the extent to which hydrogen can be produced.

Calculation excess power production

The excess power production can be calculated as below in Formula 3. 𝕀_↓(1, 𝑟) = 1 − 𝑟. 𝑝̅(𝜏) ∙ 𝜃 1 − 𝑟. 𝑝̅(𝜏) ∙ 𝑑𝜏

Formula 3: Calculation of the excess power in a power duration curve.

Once the excess power is calculated, it can then be converted to H2P. In the process of converting electricity to hydrogen and hydrogen back to electricity, we lose energy due to the conversion efficiency. The conversion from power to hydrogen using an electrolyser has

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11 an efficiency of 𝜂 (=70%). The conversion from hydrogen to electricity has an efficiency of 𝜂 (=50%). This gives us a cycle efficiency of 35% 𝜂 as calculated in Formula 4 below. 𝜂 = 𝜂 ∙ 𝜂 = 35%

Formula 4: Calculating the cycle efficiency from the electrolyser efficiency and the hydrogen to power efficiency.

The H2P production can then be calculated as in Formula 5. H2P(𝑒, 𝑟) = 𝜂 ∙ [𝕀↑(1, 𝑟)−𝕀↑(1 + 𝑒, 𝑟)]

Formula 5: Calculation of the H2P production based on electrolyser capacity and the cycle efficiency 𝜂 .

This formula calculates the area between demand and electrolyser capacity which is equivalent to the amount of power that can be used as an energy buffer. As previously mentioned, demand will be set at 1 GW in normalized state. The electrolyser capacity will be looked at in 8 different scenarios, ranging from 0.25 GW to 2 GW, as visualised in Figure 5.

Figure 5: A visual representation of the normalized power duration curve with Demand set at 1 GW, including 8 scenarios as mentioned in Table 2. The amount of energy buffer potential for scenario 1 is shown as the diagonally striped area enclosed by the Demand, the Power Curve and the upper capacity of scenario 1.

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12 Electrolyser capacity

scenario Electrolyser capacity normalized (GW) Electrolyser capacity (GW)

Scenario 1 0.25 2.14 Scenario 2 0.5 4.27 Scenario 3 0.75 6.41 Scenario 4 1 8.55 Scenario 5 1.25 10.68 Scenario 6 1.5 12.82 Scenario 7 1.75 14.96 Scenario 8 2 17.10

Table 2: 8 scenarios along with the corresponding electrolyser capacity in GW.

For each scenario, Formula 5 was applied, with the electrolyser capacity e as variable between 0.25 and 2. When the excess power generation is multiplied by the normalization number 8.55, we receive the total H2P production for each scenario.

The current economic parameters around hydrogen electrolysers

CAPEX and OPEX

In this section, we calculate the costs of capital expenditures (CAPEX) as well as the annual operational expenditures (OPEX). Currently the CAPEX (installation cost) of electrolysers is in excess of 1000$/kW, although these costs are expected to come down with future

estimated costs, ranging from 397$/kW to 955 $/kW (Saba et al., 2018). Other studies estimate low CAPEX values of 490$/kW when it is scaled up to at least 100 MW (Brynolf et al., 2018; Proost, 2019). In this H2P model, we assume a CAPEX of 1000$/kW electrolyser capacity. Furthermore, OPEX costs are taken as 3% of CAPEX (Matute et al., 2019).

The CAPEX is applied to the electrolyser scenarios on the basis of the installed quantity of electrolysers. The final profit will be calculated by subtracting the OPEX from the revenue, as shown in Formula 6. The revenue is calculated based on the cost of electricity which ranges from 50-70$/MWh in the EU (Heck et al., 2016). In this research, we use 60$/MWh.

𝑃𝑟𝑜𝑓𝑖𝑡 = 𝑅𝑒𝑣𝑒𝑛𝑢𝑒 − 𝑂𝑃𝐸𝑋

Formula 6: Calculating the profit (109_$).

Finally, the return on investment (ROI) will be used to assess whether the different scenarios are economically viable. A business venture is considered economically viable if the ROI is at least 8%. The return on investment is calculated as follows in Formula 7. 𝑅𝑂𝐼 = 𝑃𝑟𝑜𝑓𝑖𝑡

𝐶𝐴𝑃𝐸𝑋∗ 100%

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13 In this research, we ignore time value of money, as well as transportation costs. The costs of extraction of hydrogen from the natural gas blend is also outside of the scope of this

research.

Future cost reduction that needs to be achieved in order to make hydrogen production a viable investment

Since there is a lot of speculation in different studies about the CAPEX costs (Proost, 2019; Jovan et al., 2021), the CAPEX can also be calculated when combining the previous

equations. Since electrolyser installation costs are currently quite high, it is useful to find out at which CAPEX cost the investment will become economically viable. This ideal CAPEX can be derived from the previous equations as following:

𝑅 = 𝑌 − 𝑂 𝐶 = 𝑌 − 𝑎𝐶 𝐶 𝐶 = 𝑌 − 𝑎𝐶 𝑅 = 𝑌 𝑅− 𝑎𝐶 𝑅 𝐶 + 𝑎𝐶 𝑅 = 𝑌 𝑅 𝐶 1 + 𝑎 𝑅 = 𝑌 𝑅 𝐶 = 𝑌 𝑅 ∗ 1 +_𝑅𝑎 𝐶 = 𝑌 𝑅 + 𝑎 Where

- R is Return on Investment (ROI) in fraction - Y is Yield or gross revenue in $

- O is Operational Expenditure (OPEX) in $ - C is Capital Expenditure (CAPEX) in $

- 𝑎 is a fraction of the cost of Capital Expenditure used to calculate O, where we assume 3%

Formula 8: Calculation of the ideal CAPEX

Figure 9 in the Results section based on Formula 8 gives an idea of the CAPEX range between the different electrolyser scenarios that would ensure hydrogen production in Morocco could be economically viable. This point will also be more closely examined in Discussion.

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The existing infrastructure that can be used to transport hydrogen from Morocco to the Netherlands

Review hydrogen transport via natural gas pipelines

There are three main ways to transport hydrogen from North Africa (Morocco) to Europe:

 Small-scale transport, meaning trucks or trains carrying hydrogen in compressed or liquified form.

 On a large scale through hydrogen pipelines. This infrastructure does not exist yet in Morocco, only in the US and Europe. This would mean high costs of adding in new pipelines.

 By blending in hydrogen with existing natural gas pipelines.

In this research, pipeline transport of a hydrogen-natural gas blend is considered. As mentioned before, 10vol%H2 is chosen in this research, although other studies investigated

ranges from 2-30% (Melaina et al. 2013; Tabkhi et al. 2008). Based on maps from

Timmerberg & Kaltschmitt (2019), Messaoudi et al. (2019) and Cherigui et al. (2009), the line tool in ArcGIS was used to visualize the shortest natural gas pipeline route from Morocco to the Netherlands, using existing infrastructure. This was chosen since in this research,

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Results

In this section, the graphs are shown according to the methodology. A brief explanation will be given, and conclusions will be drawn in Discussion.

Figure 6: Power duration curve normalized.

This is the power duration curve according to the goals set for Morocco in 2030, namely with 4,560 MW solar capacity and 4,000 MW wind capacity. As can be seen in the graph, in roughly 40% of the year there is an overproduction of renewable energy. The spike at the left side of the graph is due to high wind speeds. The demand is set at 1 GW normalized.

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Figure 7: Cumulative yearly H2P production for each scenario. Scenario H2P production (GW) CAPEX (in 109_$)

Scenario 1 2466 2.14 Scenario 2 4573 4.27 Scenario 3 6309 6.41 Scenario 4 7659 8.55 Scenario 5 8555 10.68 Scenario 6 9095 12.82 Scenario 7 9442 14.96 Scenario 8 9670 17.1

Table 4: H2P production in GW and CAPEX in 109_{$ for each electrolyser scenario.}

This graph shows the H2P production for each electrolyser scenario. In Table 4, these production numbers are given along with the CAPEX that corresponds to it. In the graph we can see that H2P production tapers off as each additional amount of capacity captures an ever smaller amount of excess capacity. This is examined more closely in Discussion.

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Figure 8: Return on investment for each scenario, based on the assumption of 1000$/kW cost of installing electrolyser capacity.

Figure 8 shows the return on investment for each scenario, showing a decline as electrolyser capacity increases. Keeping in mind that an 8% ROI is considered economically viable, these percentages are quite low. More on this in Discussion.

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Figure 9: The costs that installing electrolysers must have in order to achieve an ROI of 8%. Using the Formula 7, the CAPEX necessary for each scenario to obtain a return on

investment of 8% was calculated and is shown in Figure 9. These costs represent the cost price required for the H2P production to make the project economically viable.

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Figure 10: A visual representation of hydrogen transport via natural gas pipelines from Morocco to the Netherlands.

Figure 10 shows a possible transportation route for hydrogen. A key role is played by Maghreb pipeline that runs from Algeria through Morocco and over to Spain. This is a natural gas pipeline and not a dedicated hydrogen line. However, up to 10% of the volume can be mixed with natural gas. In northern France, pipelines specific for hydrogen begin. At this point a separation facility is required to extract the hydrogen from the natural gas.

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Discussion

A large part of this research was conducted through normalized numbers, which gives a better overview as well as easier comparisons between the different scenarios. A limitation of this research is that unlike the electricity production, the demand was not considered as a dynamic variable and was therefore stable at 1 GW in normalized situations. As mentioned before, the electricity demand of Morocco in 2018 was 141 PJ, which translates to 4.47 GW (IEA, 2018). In this research, demand was 8.55 GW, which would suggest nearly a doubling of electricity demand in Morocco. In the 12 years between 2006 and 2018, the electricity final consumption increased with 56% (IEA, 2018). Therefore, expecting a nearly 92% increase of electricity demand between 2018 and 2030 might not be entirely accurate.

Furthermore, since electricity demand fluctuates throughout the year, it reduces the accuracy of the amount of excess electricity available for hydrogen production. The model used does not take a variating demand into account, yet this could be implemented in future research.

With Morocco’s current plans for 2030, there will be an overproduction of solar and wind energy roughly 40% of the time, as could be seen in Figure 6 in Results. This means that there is a large potential for hydrogen production. As could be expected from Figure 5 in Methods and Data, the cumulative yearly H2P production (Figure 7 in Results) tapers off for each scenario. This is because each added electrolyser capacity scenario (with steps of 0.25 GW normalized) encompasses a smaller and smaller area of overproduction in the power duration curve. The means that each additional capacity is less economically viable.

As could be seen in Figure 8 in Results, the ROI for each scenario is quite low. Since typically a business venture is seen as a “good” investment once the ROI reaches 8%, a maximum ROI of 3.9% is not very promising. This is however not a big surprise, since a CAPEX of 1000$/kW together with an OPEX of 3% of CAPEX adds up to large sums of money, especially the scale at which this research operates. This is why this research has also investigated what the CAPEX must be in order to have a ROI of 8%. This graph was also shown in Figure 9 in Results. This showed that at 630$/kW, Scenario 1 could be economically viable for a business to invest in.

On the other hand, economics is not the only reason to invest in hydrogen. The benefits from reducing the impact of GHG on climate change could very well justify lower returns on investment, but if the project can be made more economically viable through the reduction of investment costs, that would be preferable.

As mentioned before, future estimated costs range from 397$/kW to 955 $/kW (Saba et al., 2018). Other studies estimate low CAPEX values of 490$/kW when it is scaled up to at least

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21 100 MW (Brynolf et al., 2018; Proost, 2019). Therefore, installation costs of 630$/kW are not unimaginable.

Besides these future costs, funding in the way of subsidies must also be considered, as well as the economic benefits to preventing environmental damage, although this could prove difficult to quantify (Marrero et al., 2018). Furthermore, this research only considered H2P production as a buffer for intermittency in electricity supply, yet hydrogen itself could be utilized which would mean that some conversion loss is avoided, which in turn leads to a higher yield and thus revenue. Future research could implement these variables into the model.

Based on projected cost reductions by 2030 by Saba et al., 2018, all scenarios considered would be economically viable at the lower end of the costs estimates.

Finally, transport costs of hydrogen from Morocco to the Netherlands was not taken into account since it was out of the scope for this research. The premise here was that existing natural gas pipelines would be used to transport hydrogen at 10vol%H2. Further research is

needed to find if this share is high enough to transport all hydrogen according to the

demand in the Netherlands, or if a new pipeline specifically for hydrogen is necessary. This is especially relevant if Morocco’s neighbouring countries also begin to produce hydrogen, and an increasing number of countries in Europe are in need of hydrogen.

Economic viability as priority?

Although this research focuses on the economic viability of H2P production, it is not the only factor that must be taken into account. As mentioned earlier, the Netherlands has to reduce GHG emissions by 49% in 2030 compared to 1990 and by 95% in 2050 in order to meet its climate goals (EZ, 2016). These goals could take priority over profit. Also, the need to switch to a different energy source now that natural gas from Groningen is being halted could work in favour of hydrogen.

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Conclusion

The main research question was:

What is the economic viability of the production of green hydrogen in Morocco in 2030? With current electrolyser investment costs (CAPEX) at 1000$/kW, this research has found a return on investment between 0.4% and 3.9%, which is not very attractive in economic terms although economic benefits should not be the only factor in deciding climate change mitigation measures. However, with future estimated costs ranging from 397$/kW to 955 $/kW in 2030, hydrogen production could become a viable investment. Installing a capacity of 2.14 GW for H2P production in Morocco could however already become economically viable at a CAPEX of 630$/kW. More excess power can be economically captured if prices drop even further. There is already an existing pipeline infrastructure that can be utilized, so that will enable deployment of this technology in the short term. In future, however,

dedicated pipeline infrastructure may be required, either by converting existing natural gas lines to dedicated hydrogen pipelines or by building new dedicated pipelines.

This research concludes that, as long as we realise the cost reductions that have been forecast, hydrogen generated in Morocco can become an economically viable energy buffer in 2030.

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Figures

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Acknowledgements

I wish to express my gratitude towards my supervisors. First and foremost, I would like to thank my main supervisor and expert on the subject dr. prof. Gert Jan Kramer for all his support and valuable critique of my work and inspiring me to pursue further education in Energy Science. I would also like to thank Dhr. dr. A.C. (Harry) Seijmonsbergen for his

intelligent comments and recommendations and allowing me to research a subject that I am truly passionate about. Furthermore, I want to thank Mr J. (Jim) Groot for his continuous support and for being available at any time to answer my questions. And finally, I would like to thank my parents for their understanding and support with special thanks to my father who always made time for me and helped me with matters big and small throughout the whole process.

The economic potential of hydrogen as energy buffer for fluctuations in the production of wind and solar energy