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Front. Eng    2023, Vol. 10 Issue (4) : 672-694    https://doi.org/10.1007/s42524-022-0245-x
RESEARCH ARTICLE
Can energy storage make off-grid photovoltaic hydrogen production system more economical?
Xingmei LI, Xiaoyan LV, Wenzuo ZHANG, Chuanbo XU()
School of Economics and Management, North China Electric Power University, Beijing 102206, China; Beijing Key Laboratory of New Energy and Low-Carbon Development, North China Electric Power University, Beijing 102206, China
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Abstract

Under the ambitious goal of carbon neutralization, photovoltaic (PV)-driven electrolytic hydrogen (PVEH) production is emerging as a promising approach to reduce carbon emission. Considering the intermittence and variability of PV power generation, the deployment of battery energy storage can smoothen the power output. However, the investment cost of battery energy storage is pertinent to non-negligible expenses. Thus, the installation of energy-storage equipment in a PVEH system is a complex trade-off problem. The primary goals of this study are to compare the engineering economics of PVEH systems with and without energy storage, and to explore time nodes when the cost of the former scenario can compete with the latter by factoring the technology learning curve. The levelized cost of hydrogen (LCOH) is a widely used economic indicator. Represented by seven areas in seven regions of China, results show that the LCOH with and without energy storage is approximately 22.23 and 20.59 yuan/kg in 2020, respectively. In addition, as technology costs drop, the LCOH of a PVEH system with energy storage will be less than that without energy storage in 2030.
Keywords hydrogen      off-grid photovoltaic      energy storage      LCOH      engineering economics     
Corresponding Author(s): Chuanbo XU   
Just Accepted Date: 22 February 2023   Online First Date: 07 April 2023    Issue Date: 07 December 2023
 Cite this article:   
Xingmei LI,Xiaoyan LV,Wenzuo ZHANG, et al. Can energy storage make off-grid photovoltaic hydrogen production system more economical?[J]. Front. Eng, 2023, 10(4): 672-694.
 URL:  
https://academic.hep.com.cn/fem/EN/10.1007/s42524-022-0245-x
https://academic.hep.com.cn/fem/EN/Y2023/V10/I4/672
Province/City Energy storage scale Configuration proportion requirement
Hebei - 10%
Shanxi Pilot, 500 MW–1 GW 5%–20%
Liaoning - 10%–15%
Jilin - 10% for some existing projects
Jiangsu - Encourage allocation according to a certain proportion
Zhejiang 1 GW by 2024 Encourage allocation according to a certain proportion
Anhui 1.2 GW by 2024 10%, 1 h
Fujian Pilot, 300 MW 10%
Jiangxi - 10%, 1 h
Shandong 4.5 GW by 2025 10%, 2 h
Henan - 10%, 2 h
Hubei 2021 new energy supporting, 500 MW 10%
Hunan 4 GW by 2025 10%–20%, 2 h
Guangdong 2 GW by 2025 -
Hainan - 10%
Guizhou - 10%
Yunnan - Encourage the allocation and storage of wind and solar
Shaanxi - 10%–20%, 2 h
Gansu Stock + newly added, preliminary 866 MW 5%–20%, 2 h
Qinghai - 10%, 2 h
Inner Mongolia 5 GW by 2025 15%, 2 h/4 h
Guangxi - 5%–10%, 2 h
Tibet Pilot, 220 MW -
Ningxia - 10%, 2 h
Xinjiang 770 MW by 2023 10%–15%, 2 h
Tianjin 2021–2022, 526 MW 10%–15%
Tab.1  Requirements for planning and allocation proportion of new energy supporting energy storage in some provinces/cities
Fig.1  Structure diagram of off-grid PV/battery/hydrogen system.
Fig.2  Operating strategy of the proposed PVEH system with energy storage.
Parameter Value
Rated capacity (PSTC) 500 kW
Solar radiation intensity at the STC ( GSTC) 1 kW/m2
PV de-rating factor (fpv) 80%
Temperature coefficient of power ( αP) −0.005
STC of the PV panel temperatures ( Tc,STC) 25°C
Tab.2  Parameters of the PV panel
Fig.3  Change of LCOH with unit investment cost.
Area Whether there is energy storage LCOH under the pessimistic scenario (yuan/kg)
2020 2030 2040 2050 2060
Nanjing × 20.78 14.11 11.16 9.30 7.90
√ 22.43 13.76 10.90 9.17 7.87
Foshan × 20.84 14.14 11.17 9.31 7.91
√ 22.48 13.78 10.91 9.18 7.89
Hohhot × 20.59 13.95 11.02 9.17 7.78
√ 22.23 13.60 10.76 9.04 7.76
Wuhan × 20.39 13.81 10.90 9.07 7.69
√ 22.02 13.47 10.65 8.95 7.67
Xichang × 20.42 13.82 10.91 9.07 7.70
√ 22.06 13.48 10.66 8.95 7.68
Haixi × 20.34 13.77 10.86 9.03 7.66
√ 21.98 13.43 10.61 8.91 7.64
Harbin × 20.62 13.96 11.02 9.16 7.77
√ 22.25 13.60 10.75 9.03 7.74
Tab.3  LCOH with and without energy storage in the pessimistic scenario
Area Whether there is energy storage LCOH under the neutral scenario (yuan/kg)
2020 2030 2040 2050 2060
Nanjing × 20.78 12.56 8.80 6.60 5.15
√ 22.43 12.32 8.71 6.67 5.33
Foshan × 20.84 12.59 8.81 6.61 5.16
√ 22.48 12.34 8.73 6.68 5.33
Hohhot × 20.59 12.42 8.67 6.49 5.05
√ 22.23 12.18 8.59 6.56 5.23
Wuhan × 20.39 12.29 8.58 6.41 4.98
√ 22.02 12.06 8.50 6.49 5.16
Xichang × 20.42 12.30 8.58 6.41 4.98
√ 22.06 12.07 8.50 6.49 5.16
Haixi × 20.34 12.25 8.54 6.38 4.95
√ 21.98 12.02 8.46 6.45 5.14
Harbin × 20.62 12.42 8.66 6.47 5.03
√ 22.25 12.17 8.58 6.54 5.20
Tab.4  LCOH with and without energy storage in the neutral scenario
Area Whether there is energy storage LCOH under the optimistic scenario (yuan/kg)
2020 2030 2040 2050 2060
Nanjing × 20.78 11.23 7.05 4.88 3.64
√ 22.43 11.09 7.10 5.08 3.93
Foshan × 20.84 11.25 7.06 4.88 3.64
√ 22.48 11.11 7.11 5.08 3.93
Hohhot × 20.59 11.09 6.94 4.78 3.55
√ 22.23 10.95 6.99 4.98 3.84
Wuhan × 20.39 10.97 6.86 4.71 3.49
√ 22.02 10.84 6.91 4.92 3.79
Xichang × 20.42 10.98 6.86 4.72 3.49
√ 22.06 10.85 6.91 4.92 3.79
Haixi × 20.34 10.94 6.83 4.69 3.47
√ 21.98 10.80 6.87 4.89 3.76
Harbin × 20.62 11.09 6.92 4.75 3.52
√ 22.25 10.95 6.97 4.95 3.81
Tab.5  LCOH with and without energy storage in the optimistic scenario
Fig.4  LCOH without and with energy storage in the seven areas.
Area Initial investment cost of energy storage (yuan)
2020 2030
Nanjing 180003600 8961852
Foshan 180003050 8961822
Hohhot 180001502 8961747
Wuhan 180001010 8959622
Xichang 180001307 8961547
Haixi 180000000 8958622
Harbin 180002100 8960822
Tab.6  Initial investment cost of energy storage
Fig.5  Output of energy storage battery: A negative value indicates discharging whereas a positive value indicates charging.
Fig.6  Increased hydrogen production after adding energy storage.
Fig.7  NPV and IRR in the seven areas.
Fig.8  LCOH with different hydrogen production methods in 2020 and 2060, respectively.
H2 production pathway CO2 emission (kg CO2eq/kg H2) LCOH (yuan/kg)
NG 12.40 10.40
NG CCUS 4.30 14.05
Coal 19.14 8.70
Coal CCUS 1.80 9.32
Tab.7  CO2 emissions of H2 production and LCOH
Fig.9  Influence of electrolyzer efficiency change on LCOH: (a) Nanjing, Jiangsu in East China; (b) Foshan, Guangdong in South China; (c) Hohhot, Inner Mongolia in North China; (d) Wuhan, Hubei in Central China; (e) Xichang, Sichuan in Southwest China; (f) Haixi, Qinghai in Northwest China; (g) Harbin, Heilongjiang in Northeast China.
Fig.10  Influence of Li-ion battery efficiency change on LCOH: (a) Nanjing, Jiangsu in East China; (b) Foshan, Guangdong in South China; (c) Hohhot, Inner Mongolia in North China; (d) Wuhan, Hubei in Central China; (e) Xichang, Sichuan in Southwest China; (f) Haixi, Qinghai in Northwest China; (g) Harbin, Heilongjiang in Northeast China.
  Fig.A1 Hourly output of PV panels in seven areas in 2020: (a) Nanjing, Jiangsu in East China; (b) Foshan, Guangdong in South China; (c) Hohhot, Inner Mongolia in North China; (d) Wuhan, Hubei in Central China; (e) Xichang, Sichuan in Southwest China; (f) Haixi, Qinghai in Northwest China; (g) Harbin, Heilongjiang in Northeast China.
Parameter Value
Power plant related parameters
Unit investment cost (yuan/kW) {6037, 6024, 6018, 6033, 6014, 6010, 6030}*
Installed capacity (kW) 300000
Residual value rate (%) 5
Depreciation period (year) 15
Power plant learning rate β1 0.02/0.035/0.05
Operation and maintenance parameters
Repair rate (%) 0 in 1–5 years, 1.2 in 6–10 years, 1.5 in 11–20 years
Number of workers 36
Annual salary per capita (yuan) {43390, 41029, 31497, 27881, 26522, 24037, 24902}*
Withdrawal rate of employee welfare (%) 14
Overall rate of labor insurance (%) 31
Withdrawal rate of housing provident fund (%) 12
Material cost (yuan/kW) 20
Other expenses (yuan/kW) 30
Premium rate (%) 0.25
Financial parameters
Capital ratio (%) 20
Annual interest rate of loan (%) 5
Loan term (year) 15
Enterprise benchmark rate of return (%) 8
Unit life (year) 20
Discount rate (%) 8
  Table B1 Parameters of power plant
Parameter Value
Electrolysis plant related parameters
Unit investment cost (yuan/kW) 5500
Installed capacity (kW) 100000
Residual value rate (%) 5
Depreciation period (year) 15
Electrolysis plant learning rate β2 0.15
Operation and maintenance parameters
Repair rate (%) 0 in 1–5 years, 1.2 in 6–10 years, 1.5 in 11–20 years
Number of workers 12
Annual salary per capita (yuan) 60000
Withdrawal rate of employee welfare (%) 14
Overall rate of labor insurance (%) 31
Withdrawal rate of housing provident fund (%) 12
Material cost (yuan/kW) 20
Other expenses (yuan/kW) 30
Premium rate (%) 0.25
Financial parameters
Capital ratio (%) 20
Annual interest rate of loan (%) 5
Loan term (year) 15
Enterprise benchmark rate of return (%) 8
Unit life (year) 15
Discount rate (%) 8
Tax parameters
Income tax (%) 25 (three exempts and three halves)
Value added tax (%) 7 (50% immediate withdrawal)
Urban construction tax (%) 5
Education surcharges (%) 5
  Table B2 Parameters of electrolysis plant
Parameter Value
Energy storage plant related parameters
Unit investment cost (yuan/kW) 1200
Installed capacity (kW) 150000
Residual value rate (%) 5
Depreciation period (year) 4
Energy storage plant learning rate β3 0.3
Operation and maintenance parameters
Repair rate (%) 0 in 1–3 years, 1.2 in 4–5 years
Number of workers 8
Annual salary per capita (yuan) 60000
Withdrawal rate of employee welfare (%) 14
Overall rate of labor insurance (%) 31
Withdrawal rate of housing provident fund (%) 12
Material cost (yuan/kW) 20
Other expenses (yuan/kW) 30
Premium rate (%) 0.25
Financial parameters
Capital ratio (%) 20
Annual interest rate of loan (%) 5
Loan term (year) 15
Enterprise benchmark rate of return (%) 8
Battery life (year) 5
Discount rate (%) 8
  Table B3 Parameters of energy storage plant
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[1] Kaile ZHOU, Zenghui ZHANG, Lu LIU, Shanlin YANG. Energy storage resources management: Planning, operation, and business model[J]. Front. Eng, 2022, 9(3): 373-391.
[2] Andrew LOCKLEY, Ted von HIPPEL. The carbon dioxide removal potential of Liquid Air Energy Storage: A high-level technical and economic appraisal[J]. Front. Eng, 2021, 8(3): 456-464.
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