Evaluation of levelized cost of hydrogen produced by wind electrolysis: Argentine and Italian production scenarios

Abstract

Green hydrogen will play a key role in the future energy transition to achieve the main decarbonization goals. However, many large economies have limited renewable energy generation capacity, which leads to the identification of strategic sites for the global export of hydrogen. The aim of this work is to investigate the techno-economic feasibility of green hydrogen production in Argentine Patagonia with subsequent ship transport to Italy. The study includes the entire supply chain, from the production of hydrogen with renewable energy sources to its final use as a fuel for mobility in Italy. Different scenarios have been identified and compared, considering that the hydrogen production can take place directly in Italy or in Patagonia, followed by a transport to Italy. It was assumed that hydrogen is produced through PEM electrolyzers powered by wind energy. Various hydrogen transport and storage methods were analyzed to assess which is the most cost-effective solution. In addition, the influence of wind capacity factor and electricity cost on the levelized cost of hydrogen (LCOH) was analyzed to provide an in-depth comparative assessment of the two production scenarios. Even considering the additional transport costs from Argentina to Italy, the scenario with hydrogen production in Patagonia was found to be more convenient than the production in Italy. This is due to the high wind potential in Patagonia, where the average wind capacity factor is about 50% compared to 25% in Italy. The minimum LCOH was obtained considering the storage and transport of hydrogen by means of liquid organic hydrogen carriers, with a final cost of 8.60 €/kgH2 and 11.17 €/kgH2 for the Argentine and Italian production scenarios, respectively. The results of the complete supply chains were analyzed step by step, and the reasons behind the most competitive option elucidated in detail.