The cost-competitiveness of green hydrogen: the case of an oil-refining plant

Currently, refineries represent the largest hydrogen consumers in the world. Hydrogen is adopted in the hydrotreating and hydrocracking processes, which are crucial for removing sulphur compounds from hydrocarbons and producing lighter liquid fuels. Refineries mainly rely on fossil-based hydrogen, which is produced from steam methane reforming (SMR) or naphtha reforming. These production routes ensure low-cost hydrogen, but they result in significant CO2 emissions. The adoption of green hydrogen (produced through electrolysis) can thus represent a promising solution since it can enable a massive decarbonization without compromising the refining processes. This work considered as a case study an oil-refining plant located in northern Italy. The refinery intends to install a large scale photovoltaic (PV) system and a MW-range electrolyzer. This study thus aims at assessing the cost-effectiveness of producing green hydrogen through low temperature electrolyzers. Specifically, alkaline (ALK), proton exchange membrane (PEM) and anion exchange membrane (AEM) technologies were accurately assessed and compared. The zero-dimensional electrochemical models of these electrolyzers were implemented in MATLAB. The models of PEM and ALK electrolyzer were fitted with experimental data of real MW-scale systems, while the AEM model considered technical data derived from lab tests. The efficiency curves were thus obtained and adopted for modelling the electrolyzer performances. A rule-based energy management strategy was developed to regulate the operation of the PV system and the electrolyzer. The levelized cost of hydrogen (LCOH) was thus evaluated for the different technologies. In order to conduct a thorough assessment, technology-dependent input data were adopted for the investment and operating costs. In addition, the lifetime of the electrolyzer was estimated considering the annual operating hours and the number of start-up cycles. Finally, a cost-comparison with the SMR production process was performed and different scenarios were investigated to identify the natural gas price and the European emission trading system (EU ETS) carbon price needed to reach the cost-parity.