IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v346y2023ics0306261923006542.html
   My bibliography  Save this article

Assessing the cost competitiveness of electrolytic hydrogen production from small modular nuclear reactor-based power plants: A price-following perspective

Author

Listed:
  • Okunlola, Ayodeji
  • Davis, Matthew
  • Kumar, Amit

Abstract

Small modular nuclear reactor power plants (SMNRPPs) for hydrogen cogeneration are in early development, and their cost competitiveness for low-temperature electrolysis has not been well-studied. This study combines a quadratically-constrained economic dispatch model and a levelized cost analysis model to evaluate hydrogen cogeneration from a 300 MW SMNRPP coupled with proton exchange membrane electrolyzers. The SMNRPP adjusts its power output based on fluctuating electricity market prices and a time-invariant conversion value for electricity pricing arbitrage. We evaluated the SMNRPP-electrolysis system for 20 years in two case study locations and found the hydrogen supply cost ranged from CAD$1.77–3.36/kg and CAD$2.11–2.77/kg in electricity markets with high and low fossil fuel-dependence, respectively. The SMNRPP-electrolysis system is more cost-effective than fossil fuel-based hydrogen production at CAD$1.54/kg if the SMNRPP capital cost decreases to CAD$4,700/kW. This is because the SMNRPP capital cost accounts for 75% of the hydrogen supply cost variance, while other techno-economic parameters account for less than 27% of the supply cost variance. The system can achieve the lowest cost hydrogen production in under 17 years if the global learning rate and installation growth rates for SMNRPPs exceed 10% and 15%, respectively, to reach a 4.96 GW global footprint. The study outcomes can help formulate policies for SMNRPPs adoption in the hydrogen economy.

Suggested Citation

  • Okunlola, Ayodeji & Davis, Matthew & Kumar, Amit, 2023. "Assessing the cost competitiveness of electrolytic hydrogen production from small modular nuclear reactor-based power plants: A price-following perspective," Applied Energy, Elsevier, vol. 346(C).
    • Handle: RePEc:eee:appene:v:346:y:2023:i:c:s0306261923006542
    DOI: 10.1016/j.apenergy.2023.121290
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261923006542
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2023.121290?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gunther Glenk & Stefan Reichelstein, 2019. "Publisher Correction: Economics of converting renewable power to hydrogen," Nature Energy, Nature, vol. 4(4), pages 347-347, April.
    2. Locatelli, Giorgio & Boarin, Sara & Pellegrino, Francesco & Ricotti, Marco E., 2015. "Load following with Small Modular Reactors (SMR): A real options analysis," Energy, Elsevier, vol. 80(C), pages 41-54.
    3. Olateju, Babatunde & Monds, Joshua & Kumar, Amit, 2014. "Large scale hydrogen production from wind energy for the upgrading of bitumen from oil sands," Applied Energy, Elsevier, vol. 118(C), pages 48-56.
    4. David E. H. J. Gernaat & Harmen Sytze Boer & Vassilis Daioglou & Seleshi G. Yalew & Christoph Müller & Detlef P. Vuuren, 2021. "Climate change impacts on renewable energy supply," Nature Climate Change, Nature, vol. 11(2), pages 119-125, February.
    5. Vujić, Jasmina & Bergmann, Ryan M. & Škoda, Radek & Miletić, Marija, 2012. "Small modular reactors: Simpler, safer, cheaper?," Energy, Elsevier, vol. 45(1), pages 288-295.
    6. Hossam A. Gabbar & Muhammad R. Abdussami & Md. Ibrahim Adham, 2020. "Techno-Economic Evaluation of Interconnected Nuclear-Renewable Micro Hybrid Energy Systems with Combined Heat and Power," Energies, MDPI, vol. 13(7), pages 1-29, April.
    7. Ethan S. Warner & Garvin A. Heath, 2012. "Life Cycle Greenhouse Gas Emissions of Nuclear Electricity Generation," Journal of Industrial Ecology, Yale University, vol. 16(s1), pages 73-92, April.
    8. Gunther Glenk & Stefan Reichelstein, 2022. "Reversible Power-to-Gas systems for energy conversion and storage," Nature Communications, Nature, vol. 13(1), pages 1-10, December.
    9. Botterud, Audun & Yildiz, Bilge & Conzelmann, Guenter & Petri, Mark C., 2008. "Nuclear hydrogen: An assessment of product flexibility and market viability," Energy Policy, Elsevier, vol. 36(10), pages 3961-3973, October.
    10. Gunther Glenk & Stefan Reichelstein, 2019. "Economics of converting renewable power to hydrogen," Nature Energy, Nature, vol. 4(3), pages 216-222, March.
    11. O. Schmidt & A. Hawkes & A. Gambhir & I. Staffell, 2017. "The future cost of electrical energy storage based on experience rates," Nature Energy, Nature, vol. 2(8), pages 1-8, August.
    12. McDonagh, Shane & Ahmed, Shorif & Desmond, Cian & Murphy, Jerry D, 2020. "Hydrogen from offshore wind: Investor perspective on the profitability of a hybrid system including for curtailment," Applied Energy, Elsevier, vol. 265(C).
    13. Pan & Lei Tao & Kang Sun & Levi M. Golston & David J. Miller & Tong Zhu & Yue Qin & Yan Zhang & Denise L. Mauzerall & Mark A. Zondlo, 2020. "Methane emissions from natural gas vehicles in China," Nature Communications, Nature, vol. 11(1), pages 1-10, December.
    14. Hanley, Emma S. & Deane, JP & Gallachóir, BP Ó, 2018. "The role of hydrogen in low carbon energy futures–A review of existing perspectives," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 3027-3045.
    15. Stewart, W.R. & Shirvan, K., 2022. "Capital cost estimation for advanced nuclear power plants," Renewable and Sustainable Energy Reviews, Elsevier, vol. 155(C).
    16. Nikolaidis, Pavlos & Poullikkas, Andreas, 2017. "A comparative overview of hydrogen production processes," Renewable and Sustainable Energy Reviews, Elsevier, vol. 67(C), pages 597-611.
    17. Olateju, Babatunde & Kumar, Amit, 2013. "Techno-economic assessment of hydrogen production from underground coal gasification (UCG) in Western Canada with carbon capture and sequestration (CCS) for upgrading bitumen from oil sands," Applied Energy, Elsevier, vol. 111(C), pages 428-440.
    18. Olateju, Babatunde & Kumar, Amit, 2016. "A techno-economic assessment of hydrogen production from hydropower in Western Canada for the upgrading of bitumen from oil sands," Energy, Elsevier, vol. 115(P1), pages 604-614.
    19. Locatelli, Giorgio & Mancini, Mauro, 2011. "Large and small baseload power plants: Drivers to define the optimal portfolios," Energy Policy, Elsevier, vol. 39(12), pages 7762-7775.
    20. Felipe P. L. Melo & Luke Parry & Pedro H. S. Brancalion & Severino R. R. Pinto & Joaquim Freitas & Adriana P. Manhães & Paula Meli & Gislene Ganade & Robin L. Chazdon, 2021. "Adding forests to the water–energy–food nexus," Nature Sustainability, Nature, vol. 4(2), pages 85-92, February.
    21. Locatelli, Giorgio & Boarin, Sara & Fiordaliso, Andrea & Ricotti, Marco E., 2018. "Load following of Small Modular Reactors (SMR) by cogeneration of hydrogen: A techno-economic analysis," Energy, Elsevier, vol. 148(C), pages 494-505.
    22. Mignacca, B. & Locatelli, G., 2020. "Economics and finance of Small Modular Reactors: A systematic review and research agenda," Renewable and Sustainable Energy Reviews, Elsevier, vol. 118(C).
    23. Eric Dahlgren & Caner Göçmen & Klaus Lackner & Garrett van Ryzin, 2013. "Small Modular Infrastructure," The Engineering Economist, Taylor & Francis Journals, vol. 58(4), pages 231-264.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Davis, M. & Okunlola, A. & Di Lullo, G. & Giwa, T. & Kumar, A., 2023. "Greenhouse gas reduction potential and cost-effectiveness of economy-wide hydrogen-natural gas blending for energy end uses," Renewable and Sustainable Energy Reviews, Elsevier, vol. 171(C).
    2. Stöckl, Fabian & Schill, Wolf-Peter & Zerrahn, Alexander, 2021. "Optimal supply chains and power sector benefits of green hydrogen," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 11.
    3. Abadie, Luis Mª & Chamorro, José M., 2023. "Investment in wind-based hydrogen production under economic and physical uncertainties," Applied Energy, Elsevier, vol. 337(C).
    4. Lim, Dongjun & Lee, Boreum & Lee, Hyunjun & Byun, Manhee & Lim, Hankwon, 2022. "Projected cost analysis of hybrid methanol production from tri-reforming of methane integrated with various water electrolysis systems: Technical and economic assessment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 155(C).
    5. Locatelli, Giorgio & Mancini, Mauro & Lotti, Giovanni, 2020. "A simple-to-implement real options method for the energy sector," Energy, Elsevier, vol. 197(C).
    6. Dingenen, Fons & Verbruggen, Sammy W., 2021. "Tapping hydrogen fuel from the ocean: A review on photocatalytic, photoelectrochemical and electrolytic splitting of seawater," Renewable and Sustainable Energy Reviews, Elsevier, vol. 142(C).
    7. Liu, Yanyan & Huang, Guohe & Chen, Jiapei & Zhang, Xiaoyue & Zheng, Xiaogui & Zhai, Mengyu, 2022. "Development of an optimization-aided small modular reactor siting model – A case study of Saskatchewan, Canada," Applied Energy, Elsevier, vol. 305(C).
    8. Eugene Yin Cheung Wong & Danny Chi Kuen Ho & Stuart So & Chi-Wing Tsang & Eve Man Hin Chan, 2021. "Life Cycle Assessment of Electric Vehicles and Hydrogen Fuel Cell Vehicles Using the GREET Model—A Comparative Study," Sustainability, MDPI, vol. 13(9), pages 1-14, April.
    9. Nian, Victor & Mignacca, Benito & Locatelli, Giorgio, 2022. "Policies toward net-zero: Benchmarking the economic competitiveness of nuclear against wind and solar energy," Applied Energy, Elsevier, vol. 320(C).
    10. Pablo Fernández-Arias & Diego Vergara & Álvaro Antón-Sancho, 2023. "Bibliometric Review and Technical Summary of PWR Small Modular Reactors," Energies, MDPI, vol. 16(13), pages 1-15, July.
    11. David Franzmann & Heidi Heinrichs & Felix Lippkau & Thushara Addanki & Christoph Winkler & Patrick Buchenberg & Thomas Hamacher & Markus Blesl & Jochen Lin{ss}en & Detlef Stolten, 2023. "Green Hydrogen Cost-Potentials for Global Trade," Papers 2303.00314, arXiv.org, revised May 2023.
    12. Superchi, Francesco & Mati, Alessandro & Carcasci, Carlo & Bianchini, Alessandro, 2023. "Techno-economic analysis of wind-powered green hydrogen production to facilitate the decarbonization of hard-to-abate sectors: A case study on steelmaking," Applied Energy, Elsevier, vol. 342(C).
    13. George, Jan Frederick & Müller, Viktor Paul & Winkler, Jenny & Ragwitz, Mario, 2022. "Is blue hydrogen a bridging technology? - The limits of a CO2 price and the role of state-induced price components for green hydrogen production in Germany," Energy Policy, Elsevier, vol. 167(C).
    14. Nian, Victor & Ghori, Amjad & Guerra, Eddie M. & Locatelli, Giorgio & Murphy, Paul, 2022. "Accelerating safe small modular reactor development in Southeast Asia," Utilities Policy, Elsevier, vol. 74(C).
    15. Blanco, Herib & Leaver, Jonathan & Dodds, Paul E. & Dickinson, Robert & García-Gusano, Diego & Iribarren, Diego & Lind, Arne & Wang, Changlong & Danebergs, Janis & Baumann, Martin, 2022. "A taxonomy of models for investigating hydrogen energy systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 167(C).
    16. Romero, Alberto & Millar, Dean & Carvalho, Monica & Abrahão, Raphael, 2020. "100% renewable fueled mine," Energy, Elsevier, vol. 205(C).
    17. Okunlola, Ayodeji & Davis, Matthew & Kumar, Amit, 2022. "The development of an assessment framework to determine the technical hydrogen production potential from wind and solar energy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 166(C).
    18. Gordon, Joel A. & Balta-Ozkan, Nazmiye & Nabavi, Seyed Ali, 2023. "Socio-technical barriers to domestic hydrogen futures: Repurposing pipelines, policies, and public perceptions," Applied Energy, Elsevier, vol. 336(C).
    19. Baldi, Francesco & Coraddu, Andrea & Kalikatzarakis, Miltiadis & Jeleňová, Diana & Collu, Maurizio & Race, Julia & Maréchal, François, 2022. "Optimisation-based system designs for deep offshore wind farms including power to gas technologies," Applied Energy, Elsevier, vol. 310(C).
    20. Tomonori Miyagawa & Mika Goto, 2022. "Hydrogen Production Cost Forecasts since the 1970s and Implications for Technological Development," Energies, MDPI, vol. 15(12), pages 1-24, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:346:y:2023:i:c:s0306261923006542. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.