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Impact of International Transportation Chains on Cost of Green E-hydrogen: Global Cost of Hydrogen and Consequences for Germany and Finland

Abstract

Widely available and low-cost solar photovoltaics and wind power can enable production of renewable electricity-based hydrogen at many locations throughout the world. Hydrogen is expected to emerge as an important energy carrier constituting some of the final energy demand; however, its most important role will be as feedstock for further processing to e-fuels, e-chemicals, and e-steel. Apart from meeting their own hydrogen demand, countries may have opportunities to export hydrogen to countries with area limitations or higher production costs. This paper assesses the feasibility of e-hydrogen imports to Germany and Finland from two case regions with a high availability of low-cost renewable electricity, Chile and Morocco, in comparison to domestic supply. Special attention is paid to the transport infrastructure, which has a crucial impact on the economic viability of imports via two routes, shipping and pipelines. This study has found that despite lower e-hydrogen production costs in Morocco and Chile compared to Germany and Finland, additional transportation costs make imports of e-hydrogen economically unattractive. In early 2020s, imported fuel costs are 39–79% and 34–100% higher than e-hydrogen produced in Germany and Finland, respectively. In 2050, imported e-hydrogen is projected to be 39–70% more expensive than locally produced e-hydrogen in Germany and 43–54% in the case of Finland. e-Hydrogen may become a fuel that is mostly produced domestically and may be feasible for imports only in specific locations. Local e-hydrogen production may also lower dependence on imports, enhance energy security, and add jobs.

Funding source: The authors gratefully acknowledge the public financing of Business Finland through the P2XENABLE Project under Grant 8588/31/2019 and the HYGCEL project, and the LUT University Research Platform “GreenRenew”, which funded this research. The partly co-funding by TransnetBW GmbH and related exchange with Shell Global Solutions International B.V. is acknowledged for this research.
Related subjects: Policy & Socio-Economics
Countries: Finland
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/content/journal4790
2023-06-18
2023-09-29
http://instance.metastore.ingenta.com/content/journal4790
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