SMR Versus Electrolyzer Cost

In this webpage I address the issue of Green versus Grey or Blue Hydrogen. The process of making hydrogen using electricity with water does not produce any carbon. Alternatively, the process of using a Steam Methane Reactor and making hydrogen from natural gas — CH4 — will produce carbon when the Hydrogen is extracted. Most of the writing on hydrogen presumes that the cost of hydrogen from an SMR has a much lower cost than from an electrolyzer because of the direct use of natural gas. This page investigates how you can compute the cost of an SMR with alternative natural gas prices and compares the cost of the SMR with the cost of an electrolyzer that may take advantage of very low cost electricity when the prices are very low or produce hydrogen in proximity of a solar and/or a wind project.

In this page I illustrate how I use exercise files that I have created for various different issues. I demonstrate that the crucial issue in working through hydrogen is evaluating the efficiency and the fuel costs. As the fuel cost rather than the capital cost is the driver of hydrogen cost, alternative strategies that only produce hydrogen from an electrolyzer are demonstrated. For example, an electrolyzer may run at a low capacity factor to only use very cheap solar power. The cost of this strategy is affected by the fact that the stack of an electrolyzer is driven by the hours of use rather than by a simple chronogical measure of time.

The file attached to the button below includes some excel exercises that work through different strategies.

Excel File with Analysis of Electrolyzer (Green) Hydrogen compared to SMR (Hydrogen from Natural Gas)

My comments on hydrogen are in the power point slides below. I update this some time and you can fine the updated version on the google drive.

Power Point Slides with Discussion of Levelised Cost, Characteristics and Financial Analysis of Hydrogen Projects