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Model-based techno-economic evaluation of power-to-hydrogen-to-power for the electrification of isolated African off-grid communities

Schöne, Nikolas; Khairallah, Jassem; Heinz, Boris

Mini-grids are expected to be the least cost option to electrify more than half a billion people living predominantly in isolated communities in sub-Saharan Africa. Providing a high reliability of power supply to satisfy paying customers is vital for the challenging business case of mini-grid owners. Therefore, renewable-based mini-grids of the third generation commonly include either diesel generators or battery storage for backup power supply. Power-to-hydrogen-to-power (P2H2P) is a promising alternative to overcome technical, financial, and social shortcomings of diesel generators and batteries. Previous research highlights the challenging economic competitiveness of P2H2P in specific case studies only. Here, we conduct a model-based techno-economic analysis on an archetypal representative mini-grid to compare the economic performance of P2H2P against the diesel generator and battery storage. We identify key parameters decisive for the competitiveness of P2H2P via sensitivity analysis. Under today's conditions, P2H2P is financially viable in 100 % decarbonized mini-grid systems. Ongoing trends of increased fuel price and P2H2P technology improvements must continue to achieve economic advantages of P2H2P over the diesel generator. However, P2H2P is competitive in locations in which the diesel price is higher than 2.6 USD/l or when P2H2P investment costs drop by >50 %, which is expected beyond 2040. Sensitivity analysis shows that increasing P2H2P system efficiency can substantially benefit the economic performance. Seasonal variations on the African continent are insufficient to create exploitable advantages of P2H2P against the short-term storage of batteries. The results suggest especially larger future PV mini-grids to combine battery storage and P2H2P rather than including common diesel generators or only including batteries when trends towards cheaper and more efficient technologies continue and diesel prices increase. Future work should investigate economic effects of the unique multi-usability of hydrogen on the mini-grid system, such as the usage as clean cooking fuel.
Published in: Energy for Sustainable Development, 10.1016/j.esd.2022.08.020, Elsevier