By: @Tom Thunell | Date: December 13, 2022
One of the big winners of the Inflation Reduction Act is the hydrogen industry. Under the new legislation, green hydrogen (or hydrogen produced from clean energy sources) is eligible for a $3/kg production tax credit. This tax credit is expected to make green hydrogen production competitive with gray hydrogen (or hydrogen produced from natural gas).
For renewable developers, supplying energy for hydrogen production presents a major new offtake opportunity. In this blog post, we explore how renewable developers can leverage Tyba’s modeling software to design clean energy systems that supply hydrogen production facilities.
An industrial company is exploring whether to add green hydrogen production (electrolyzer + on site clean energy) to their existing facilities in central New York, North Carolina, and east Texas. Each facility has space to site solar and batteries behind the utility meter. The operator has shared that they need to hit a minimum of 55% load factor (or 5.5 MW of power injected) per hour on the electrolyzer over the course of the year to meet their hydrogen demand. They are soliciting bids from renewable developers to design renewable systems that meet their production requirements but at the lowest cost possible.
Setup & run the models
Based on the details provided, we are going to model a range of solar only and hybrid solar + storage designs that toggle across the following options for each site.
This is a screenshot from Tyba’s web application. With the Scenario Analysis feature, you are able to quickly setup a simulation that scans across various commercial and technical design options for multiple locations.
How far can solar get us?
Now that we’ve run the simulations, we want to first see how far a solar-only design can get us.
| Solar Capacity (MWdc) | NY Site Load Factor | NC Site Load Factor | TX Site Load Factor |
|---|---|---|---|
| 10 | 18% | 21% | 21% |
| 15 | 25% | 29% | 29% |
| 20 | 29% | 32% | 33% |
| 30 | 33% | 36% | 37% |
| 40 | 35% | 38% | 39% |
As expected, even with a significantly oversized solar facility, we are well below the 55% target. Likewise, there are significantly diminishing returns on incremental solar capacity as you move above to the 15-20 MWdc.