Techno-Economic Analysis of Clean Hydrogen Production Plants in Sicily: Comparison of Distributed and Centralized Production

Abstract

This paper presents an assessment of the levelized cost of clean hydrogen produced in Sicily, a region in Southern Italy particularly rich in renewable energy and where nearly 50% of Italy’s refineries are located, making a comparison between on-site production, that is, near the end users who will use the hydrogen, and centralized production, comparing the costs obtained by employing the two types of electrolyzers already commercially available. In the study for centralized production, the scale factor method was applied on the costs of electrolyzers, and the optimal transport modes were considered based on the distance and amount of hydrogen to be transported. The results obtained indicate higher prices for hydrogen produced locally (from about 7 €/kg to 10 €/kg) and lower prices (from 2.66 €/kg to 5.80 €/kg) for hydrogen produced in centralized plants due to economies of scale and higher conversion efficiencies. How-ever, meeting the demand for clean hydrogen at minimal cost requires hydrogen distribution pipelines to transport it from centralized production sites to users, which currently do not exist in Sicily, as well as a significant amount of renewable energy ranging from 1.4 to 1.7 TWh per year to cover only 16% of refineries’ hydrogen needs.

Keywords

• clean hydrogen
• levelized cost of hydrogen (LCOH)
• energy transition
• techno-economic analysis