Levelized Cost of Hydrogen and Biomass

This page includes an analysis of the levelized cost of hydrogen (LCOH) from transport use. Computing the unit cost of hydrogen is more complex than computing the levelized cost of electricity as electricity typically only has a couple of inputs (except in the case where batteries are used). The LCOH depends on the cost of electrolyzers that use electricity and convert the electricity into hydrogen. But you are not finished after computing the cost of the hydrogen (expressed in per kg and not kWh). The analysis should also cover the cost of compression, storage and dispensing. Finally, in order to make the analysis relevant, the costs of the transportation equipment and the difference in the efficiency of the transport equipment must be accounted for. I have tried to demonstrate the levelized cost with a diagram and some spinner boxes and dropdown boxes. I harp on the point that for the LCOH analysis to be useful, you must be very transparent with the inputs and the formulas. The screenshot below is from the model that I made.

The file with the levelized cost of hydrogen analysis is attached to the button below. In this file you can create your own technology alternatives and/or change the cost and efficiency inputs for different alternatives. As you can see from the screenshot above, the key for me is to see the percent increase or decrease in cost relative to operation with diesel. You can also click on the check boxes to include or not include the cost of hydrogen trucks relative to diesel trucks. I explain how I have created the database below.

Excel File with Analysis of The Levelized Cost of Hydrogen Including Databases with Alternative Technology Estimates

I have made a similar file for using biomass to compute methane and then use the methane as fuel for trucks. This case is a representative case of using palm oil fruit bunches an putting them in a lagoon. The lagoon produces biogass which can be refined in an upgrader and converted to methane. Finally the methane must be dispensed to be used as replacement for diesel fuel. Both of these cases have a lot of conversions and as I am a bit slow and not an engineer, I insist on being very explicit about how the conversions are made.

Excel File with Analysis of The Costs and Benefits of Converting Biogas from Palm Oil Into Methane For Use in Trucks

I have also used the file to compute a financial model that evaluates the required subsidy that is necessary to attract investment. This file is computed on a monthly basis rather than an annual basis. The file also contains trucks that are not assumed to be built at the same time. With this file you can compute the required subsidy if there are different costs of electricity, sizes of the electrolyzer, capital costs and many other variables. This file is attached to the button below.

 Excel File with Financial Model of Hydrogen Project Using Inputs from the Hydrogen LCOH Analysis and Databases

Database for LCOH Analysis

In the above files, I have tried to make it easy to change inputs and compare inputs for the various technologies with other estimates. I used to make databases for wind and solar before the costs became pretty public and easy to find. So I used some costs that I received from a friend along with more difficult to find data on the capacity and the cost of storage, compression and dispensers. In order to compare the costs I put a dropdown box for different data sources and then allow you to select individual characteristics by copying the dropdown box. In addition, I add reset buttons so that you can go back to your starting point. These methods can be applied to any scenario and are explained in the videos near the bottom of the page. The screenshot below illustrates the

For the biomass case I just use spinner buttons that are attached to the inputs. (In the hydrogen case the inputs are collected from the index column of the database). The screenshot below illustrates how this process works. For both projects it is in my opinion essential to keep the different parts of the process separate. In both cases you must make sure that the amount of production can meet the required truck demand and that the equipment is not over- or under-sized. This is analogous to the capacity factor analysis when evaluating LCOE.

LCOH Model

The model for the LCOH case involves a lot of conversions. You have to convert the amount of electricity to the kg using an efficiency ratio. You have to convert the km of the trucks to the amount of hydrogen and the amount of diesel. You have to convert the amount of hydrogen required per day into the amount of dispenser capacity measured in therms of minutes. The manner by which I try to be explicit about this stuff is illustrated in the screenshot below.

Video Discussing Levelised Cost of Hydrogen