IMAGHyNE French hydrogen valley: Tecno-economic feasibility study for industrial production and transportation of green hydrogen between Auvergne-Rhone-Alpes and Piemonte

The development of green and low carbon hydrogen supply chain is becoming crucial and many energy-intensive industries are interested in swapping from Steam Methane Reforming (SMR) to hydrogen electrolysers. These industries vary from the transport sector to the methanol production, glass industry, semiconductors sector and to generate high temperature for steel industries. A techno-economic feasibility study is presented for the industrial production and transportation of hydrogen between the Auvergne-Rhône-Alpes region in France and the Piemonte region in Italy, under the premises of IMAGHyNE, a new hydrogen valley supported by the EU. The core analysis of the study revolves around the evaluation of the hydrogen production capacity and costs, introducing then some hypotheses regarding the trade of hydrogen between the two countries. Essential is the use of the Levelized Cost of Hydrogen (LCOH) and the Levelized Cost of Hydrogen for Transport (LCOH-T), metrics that are essential in assessing the economic feasibility of hydrogen production and its subsequent transportation. The methodology involves detailed modelling of various scenarios, incorporating parameters such as CAPEX, OPEX, WACC, capacity factors and energy prices. Since the plants involved are 3 in Italy and 5 in France, different electricity spot market prices are considered, along with some PPA green contracts. Some plants are indeed self-sufficient with the aid of on-site PV plants or other RES, relying on the grid to reach the right volume of production. The transportation is studied with some preliminary hypotheses, assuming a standard trip between Lyon and Turin and with the final comparison between three different technologies: Compressed Gas Hydrogen (CGH2), Liquefied Hydrogen (LH2) and Liquid Organic Hydrogen Carriers (LOHC). Preliminarily, the volume of green hydrogen produced by the 8 plants and available for trade is not known, even though each one of them is confirmed that will produce H2 for itself or for associated industries. Therefore, 4 scenarios of hydrogen volume available are implemented and studied alongside the three technologies. Results indicate that the economic feasibility of hydrogen production and transport varies significantly with technology, energy supply agreement and electrolyser’s size. The LCOH analysis reveals low competitive costs, with values ranging between 5€ to 7€ per kg of hydrogen for France and between 7€ and 10€ for Italy. This disparity is due to smaller Italian plants and higher electricity prices in the Italian market. The competitiveness of green hydrogen is currently low for the European market since the average EU price of hydrogen produced via Natural Gas was 2.67€/kg in 2021. Finally, a trade among the two regions between 400 and 2,600 tonnes of hydrogen per year would be possible. The higher initial investments for LH2 are not completely appealing for this study due to the short distance, meanwhile the LOHC and CGH2 show similar results, with a best-case scenario of 30% of hydrogen availability that achieve respectively an average transport cost of 3.2€ and 3.6€ per kg. Giving the elevate industrialisation of both regions these projects will help decarbonise the industries, with 8,873 tonnes of green and low carbon hydrogen produced yearly between the two regions. The IMAGHyNE project is expected to last until 2029 and this work contributes to lay down the basis for the ongoing analysis on hydrogen infrastructure at a regional level and cooperation between nations.