Profitability assessment of electro-fuel supply from hybrid energy systems

Paper in proceeding, 2025

Electrolytic hydrogen plays a significant role in the decarbonization of hard-to-abate sectors. This paper evaluates the profitability of hydrogen, ammonia and methanol supply from hybrid energy systems, including wind power, solar PV power, and the utility grid. Based on the IEA hydrogen project database, ten representative locations are selected as production sites, and the levelized production costs are evaluated based on the optimization of installed capacity and operation strategy. The results indicate that the mass-based levelized cost of hydrogen across all sites ranges from 20 to 26.6 CNY/kg, which is significantly higher than that of ammonia (5.6-7.1 CNY/kg) and methanol (6.6-8.2 CNY/kg). Aksu exhibits the lowest levelized cost for all fuel options among various production sites, as it has the lowest electricity tariffs. However, with the transportation cost included, Aksu has the highest landed costs for almost all trading spots, as Aksu is far away from all trading spots. In contrast, Ulanqab presents the lowest landed costs for all trading locations, due to the coupling effects of low production costs and short transport distances. Furthermore, all hydrogen pathways, except for Zhangzhou-Zhengzhou, present lower landed costs than the trading price, whereas all ammonia and methanol pathways are not profitable due to their extremely low trading prices.