Potential of Hydrogen Production with Off-Shore Wind in Sweden and Finland

Sammanfattning

Finland has set itself the goal of becoming carbon neutral by 2035, while Sweden wants to achieve net-zero greenhouse gas emissions by 2045. To achieve these goals, fossil fuels must be replaced with renewable energy sources that can be intermittent. Hydrogen is seen as a promising solution enabling surplus electricity to be stored as hydrogen and later converted back into electricity during periods of low wind availability or when the grid is overloaded, while also serving as a valuable chemical precursor. One option for powering hydrogen production is with off-shore wind which present more constant and stronger wind streams than on-shore. Hydrogen production with off-shore wind energy can be an opportunity for both countries to take a leading role and secure a strong global position in the energy transition. To assess whether hydrogen production coupled with off-shore wind is profitable, this thesisconducts a techno-economic assessment of an off-shore wind farm (1 500 MW) powering an on-shore electrolyzer (500 MW) using cost- and flexibility models. All of the available electricity isdirected toward the electrolyzer. If needed, additional electricity is bought from the grid to supportthe hydrogen production, or surplus electricity from the wind farm is sold to the grid. To avoid high electricity price, the models considers the break-even point, meaning that if the price at which it makes more economic sense to sell electricity than to produce hydrogen, the electricity generated is fed into the grid. As a result, the production of one kilogram of hydrogen costs 8.89 EUR in Finland and 8.57 EUR/kg H2 in Sweden. Increasing the electrolyzer size and the full load hours of the electrolysis results in lower LCOH in both countries. Ultimately, increasing both factors leads to an increased share of grid electricity and a reduction in overall LCOH. Furthermore, increasing the size and operating hours decreases the share of capital cost at the overall LCOH since it is distributed over a higher amount of produced hydrogen. The most profitable set-up is advantageous from an economic perspective, but with increased use of grid electricity, it will be more difficult to achieve RFNBO certification, which is an essential part of clean hydrogen and the overall decarbonization goal. To reach a complete picture of this scenario, future work could focus on additional capital and operating costs for transmitting electricity from off- to on-shore, comparing hydrogen produced with wind power to solar power or include social and environmental aspects.