One of the big winners of the Inflation Reduction Act is the hydrogen industry. Under the new legislation, green hydrogen (or hydrogen produced from clean energy sources) is eligible for a $3/kg production tax credit. This tax credit is expected to make green hydrogen production competitive with gray hydrogen (or hydrogen produced from natural gas).
For renewable developers, supplying energy for hydrogen production presents a major new offtake opportunity. In this blog post, we explore how renewable developers can leverage Tyba’s modeling software to design clean energy systems that supply hydrogen production facilities.
An industrial company is exploring whether to add green hydrogen production (electrolyzer + on site clean energy) to their existing facilities in central New York, North Carolina, and east Texas. Each facility has space to site solar and batteries behind the utility meter. The operator has shared that they need to hit a minimum of 55% load factor (or 5.5 MW of power injected) per hour on the electrolyzer over the course of the year to meet their hydrogen demand. They are soliciting bids from renewable developers to design renewable systems that meet their production requirements but at the lowest cost possible.
Setup & run the models
Based on the details provided, we are going to model a range of solar only and hybrid solar + storage designs that toggle across the following options for each site.
How far can solar get us?
Now that we’ve run the simulations, we want to first see how far a solar-only design can get us.
As expected, even with a significantly oversized solar facility, we are well below the 55% target. Likewise, there are significantly diminishing returns on incremental solar capacity as you move above to the 15-20 MWdc.
Can a hybrid solar + storage design hit the 55% target?
Now that we’ve established that a solar-only design cannot hit the 55% target, let’s see if hybrid solar + storage designs can. The tables below detail the load factor across different solar capacity and storage capacity + duration options for each site. Some quick takeaways are:
For those more visually inclined, you can also review performance with 12 x 24 graphics:
…or switch to a heatmap view:
For the range of design options that meet the qualification criteria, you can now run through your financing model and propose a blended PPA rate.
From the facility operator’s perspective, they will want to compare this blended PPA rate vs. their current utility rate as well as the overall impact on facility load. In Tyba’s software, you can model site load pre- and post- installation of the system, and show economic value beyond just meeting the operating requirements.
If you are a facility operator or renewable developer looking to support green hydrogen production, we’d love to talk to you. Shoot us an email at email@example.com to speak with the Tyba team and explore how we can work together.
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