Hydrogen production on offshore platforms. A techno-economic analysis.

Abstract

It is essential for the world to reassess its energy production technologies, because of the ever-growing energy demand and the developing climate awareness. One of the energy production technologies that is reaching the end of its lifetime is the oil and gas production on the Dutch Continental Shelf (DCS). As of 2019, around 150 installations are operative in this DCS. In the coming ten years, 100 of the 150 installations will be decommissioned. Approximately 10% of these 150 platforms can be re-used for future activities such as carbon capture and storage and hydrogen production. Hydrogen can play an important role in the energy transition. Green hydrogen, produced using renewable energy sources, is seen as a promising technology that might enable an energy system using renewable energy on a large scale. Advantages of green hydrogen are its ability of decoupling supply and demand for energy due to its storage capacity and its ability to be transported and stored in large quantities. This research presents a techno-economic analysis of the costs of producing hydrogen on decommissioned offshore platforms using offshore renewable energy sources. Aim of this analysis is to compare these production costs with projected costs of producing green hydrogen using other renewable and conventional energy sources. The analysis resulted in a levelized cost of hydrogen ranging from 4.90 €/kg in the most positive scenario, where electrolyzer costs are low and hydrogen is transported to shore using existing pipelines, to 10.81 €/kg in the high cost scenarios. This is significantly higher than expected production costs of 3 €/kg of green hydrogen in 2030 as presented in existing literature. Based on the outcomes of the analysis, and using the assumptions made in this research, a competitive price cannot be reached. Future research must show whether a combination of a decreasing electricity price and an increase in capacity factor can improve the economic feasibility of offshore hydrogen production. Due to the decommissioning of offshore infrastructure and the increasing urge to find energy storage options for the growing share of intermittent renewable energy in the energy mix, offshore hydrogen production is seen as a concept with potential. This research shows however, that significant cost reduction is necessary to make offshore hydrogen production on existing platforms economically viable.