Sustainability pathway to scale the hydrogen economy
By Ron Beck, Senior Director, Aspen Technology, Inc. Ron will be participating as a speaker at the Asian Refining Technology Conference (ARTC) which takes place at the Asian Downstream Summit (ADS) Event [25-26 Oct 2023 Sands Expo & Convention Centre] in a week’s time.
Sr. Industry Marketing Director, Aspen Technology, Inc.
During his 14 years at AspenTech, Ron Beck has held multiple marketing roles, including Industry Marketing, Product Marketing and Telesales Marketing. He is currently the lead for Global Energy Industry Marketing. He has over 30 years’ experience in providing software solutions to the process industries and 15 years’ experience in chemical engineering technology commercialization. Ron has authored papers on key industry topics and presented at several public industry events. He has a bachelor’s degree from Princeton University in New Jersey.
With an increasing demand for resources from a growing population with rising standards of living, the global community needs to address a more sustainable future. To achieve that, India and the world will see a steep increase in energy demand. In driving towards net-zero, much of that will be met with renewable electricity, but that is not a single solution. The hydrogen economy will play a key role, projected to satisfy around 20% of the globe’s energy needs by 2050. The opportunity areas in hydrogen include green and low-carbon hydrogen production; hydrogen storage and delivery to market; carrier fluids (today ammonia and methanol) and end users, such as fuel cells, hydrogen/natural gas mixtures and green ammonia for fertilizers. This will drive strong investment towards research and development; as well as commercial areas – an accelerating industry trend in both Asian and global capital project activity. However, there are hurdles to leap.
Bill Gates, in his recent book on climate solutions and breakthroughs, talks about the Green Premium, which means the world is facing the prospect of paying more for energy that is green and that extra cost must and can be eliminated. Gates argues that it will be through trillions of dollars of investment that the innovation and breakthroughs will accelerate, reducing and eliminating the Green Premium.
According to a recent report by McKinsey and Company, hydrogen is expected to account for 20% of the world’s carbon abatement by the year 2050. As of June 2023, the Global Energy Infrastructure database analysis by H2 Tech Magazine, there are 1,886 hydrogen projects globally, 47 of which are what the Hydrogen Council calls Giga-Scale projects. Today, the world production of hydrogen stands at approximately 100 million metric (MT) per year. Most of that is for captive use in refining and chemical processes. The World Bank projects the number will grow by more than 9% per year through 2030, with world production of hydrogen reaching 500-680 MT per year by 2050.
Speed of progress
It was the year 2003 when the US and Europe agreed to collaborate on accelerating the hydrogen economy. Now, it is finally becoming a reality with strong investments in many regions (the USA alone is putting US$1billion into electrolysis commercialization and US$8billion into 4 regional hydrogen hubs this year.) However, there are remaining hurdles to overcome, in order to scale the global hydrogen value chain and realize the projects, as identified by the World Bank, Hydrogen Council, International Energy Agency (IEA), McKinsey and others.
The biggest of these hurdles is the economics of hydrogen production, delivery and use. According to the International Renewable Energy Agency (IRENA), hydrogen energy is today two to three times more expensive than fossil energy, not counting the cost of carbon. Hydrogen pipelines are about 10 – 50% more expensive than natural gas and oil pipelines. Digital technology will level the playing field relatively quickly. As such, AspenTech has developed a sustainability pathway for the hydrogen economy that makes the key, leading edge, digital technologies easy to adopt for supporting innovation, execution and scaling of hydrogen projects across the value chain, from renewables to hydrogen production to storage and delivery of hydrogen to end use.
Adopting digital technology
There are six steps in making best use of digital technology in the hydrogen economy. First, it is necessary to have a systems-level analysis of a hydrogen project. Defining the best choices in the investment stage of hydrogen projects is complicated by many alternative pathways, technology choices, new technology risks and weather variability. Digital technology will have one of its biggest impacts here in making the right choices for each project in each location to balance scale, risk and innovation.
Second, digital twin modeling of hydrogen production will reduce capital costs by 75%. In the hydrogen economy, digital twins are an essential engineering, estimating and project tool that will enable the evaluation of thousands of alternative design choices; rapid evaluation of costs and economics; virtual mirroring and constant performance evaluation of new technologies; as well as ongoing feedback of early operating modules and improvement of follow-on modules.
For hydrogen, digital twin feedback will be crucial in the expected progressive implementation strategy. Air Products, a world-leading hydrogen supplier and ARAMCO’s partner in the NEOM project, published a case study describing the use of AspenTech digital twin models across their network of 20 hydrogen plants and connecting pipelines across the U.S. gulf coast. That case study documents more than USD 1M in annual cost reduction in operations, as measured in one of the 20 plants, managed with the help of these models.
Third, the optimization of renewable power, storage and electrolysis can increase hydrogen production load factor and reduce operating costs by 10%. There is a lot of focus on capital costs, associated with hydrogen electrolysis. However, reducing the operating costs for hydrogen production is also crucial.
Fourth, monitoring, measuring and modeling hydrogen storage and transport for safety can enable 100% availability. Dr. Robert Socolow, co-author of the 2003 Hydrogen Economy Blueprint, has continued to emphasize that safety is an important concern for rapid adoption of the hydrogen economy, both for hydrogen delivery and for hydrogen end use.
Fifth, it is necessary to optimize the hydrogen value chain. The overall economics of hydrogen will be dependent on a value chain that in most cases will cross multiple company boundaries. In conjunction with systems level modeling, hydrogen economy players can make the right decisions in investing across the hydrogen economy, both in selection of process technologies and in making decisions with respect to value chain paths.
Finally, improving and optimizing hydrogen end use for economics and safety can ensure market acceptance. The same rigorous and accurate models that are used for hydrogen electrolysis technology innovation also provide high value in the innovation and engineering stages for scaling the hydrogen fuel cell market. Doosan Fuel Cell is only one of more than 15 fuel cell and automotive companies that are using AspenTech process modeling in their fuel cell engineering activities. Digital twins will be crucial in accelerating the improvement of fuel cells from version to version, as usage increases.
Digital technology is a strategic element in reducing cost across the hydrogen value chain, accelerating scaling and speed of implementation, as well as ensuring the safety and reliability of hydrogen solutions.
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