Feasibility studies for green hydrogen production

Relying on proprietary models able to simulate the system operation on an hourly basis for the entire lifetime, DNV can offer accurate results.

Hydrogen production from renewable electricity is object of several projects worldwide, which are being developed to serve several industries such as refining, low-carbon fuels production, fertilizers, steel, and so on. The first step for a successful project development is a well-grounded feasibility study, defining at a high-level the optimal configuration that leads to the lowest levelized cost of hydrogen. Relying on proprietary models able to simulate the system operation on an hourly basis for the entire lifetime, DNV can offer accurate results to guide the project design in its early phases and identify the main risks to be mitigated. Moreover, leveraging on its knowledge of the industry of hydrogen-related technologies, DNV is also able to supply information on the main characteristics of the assets involved and to propose preliminary block diagrams, plant layouts and schedule for the project. Our purpose is to provide an independent study which allows the developer to enter confidently in more advanced stages of project maturity consolidating a robust and accurate basis of design for the initiative.

Our service

The DNV feasibility studies of projects for hydrogen production from renewable electricity include the following tasks:

1. Techno-economic model for LCOH/LCOX calculation through hourly dispatch simulation of the system for the whole project lifetime, considering (depending on the specific case). These as carried out in hourly basis and allow obtaining accurately key indicators such as H2/derivative yearly productions LCOH/LCOX, IRR, NPV of the cashflows, etc.
2. Equipment list with main technical features and technology description for the most relevant plant assets, like electrolysis system, hydrogen compression/storage/transportation assets, water and electricity supply equipment, global energy management (plant controller), etc.
3. Block diagrams representing how the plant is arranged, including the indication of major pieces of equipment and their features (sizes, power consumption, nominal productions, ...)
4. Preliminary plant layout, to assure that available surface is sufficient and identify how the plant buildings can be placed in the project’s location
5. Project schedule, including the duration of the most important phases and tasks, considering a COD aligned with the project’s targets. Typical phases include: stakeholders engagement; licensing; permitting and approvals; design and engineering; financial deals; detailed engineering; procurement and delivery on site
6. Development of a matrix-based risk assessment to describe the most relevant aspects of the projects, relying on the documentation received about it. For every risk detected, the matrix includes description, implications, impact, probability, severity and mitigation actions (advice on how to reduce or eliminate the risk)
7. Other studies required at this stage by the developer (for instance, those required to request public funding, etc.).

Our expertise

DNV is uniquely positioned in the hydrogen value chain as a result of our domain expertise of the power, renewables, oil&gas and maritime sectors, covering hydrogen production, transportation, storage and end-uses. DNV is able to provide support across the entire project or product life cycle for hydrogen projects, with independent project/program management services, technical/commercial/regulatory due diligences, supply chain assessment and independent 2nd party opinion/3rd party verification, encompassing:

• Strategy development, roadmap services, analysis/development of regulations and market designs, market outlooks and supply/demand forecasts
• Applied R&D, including experimental setups, explosion experiments and research
• Innovation and demonstrations, with participation to JPIs/industrial consortia, technology qualification and development of recommended practices and standards
• Feasibility and concept selection, including techno-economic feasibility studies, business case development, system integration studies with safety (HAZID, HAZOP, QRA, …), location assessment
• Services to secure funding, like project information memorandum preparation, subsidy analysis and support for funding application
• Design verification and owner’s or lender’s engineering services during project design and construction
• Operations support and lifetime extension/decommissioning, including performance validation, process optimization, incident/accident databases, assessment of re purposing of existing assets.

As a result, DNV works in the hydrogen domain with key players like utilities, Oil & Gas companies, renewable developers, investment funds or national bodies. Building on this experience, DNV develops specific publications exploring the role of hydrogen in decarbonising transport, heat and power systems, including the Hydrogen Forecast to 2050, a report showing the independent and neutral perspectives on the emergence and growth of a hydrogen economy in the next years.

In the specific area of feasibility studies, DNV already participated to green hydrogen production projects in several geographic locations worldwide and with a variety of configurations in terms of grid connection (on-grid or partially/completely off-grid), kind of renewable electricity (hydro, solar, wind, …), utilization of other energy storage devices (e.g. BESS), final product (pure hydrogen, derivatives like NH₃/e-fuels, electricity from fuel cells, …), offtaker features (e.g. product demand profile) and so on. This vast expertise permits to DNV to deal with basically any kind of project that involves electrolytic H₂-production from renewables, applying the most appropriate approach to the specific project structure.