Guest Commentary: Renewable Energy

Hydrogen is a very valuable alternative to fossil fuel for distributed energy generation, delivering a high-powered solution with minimal environmental and safety concerns. Green businesses, telecomm providers, governments, and renewable energy advocates can now produce on-demand energy for their assets, at minimal cost and using commercially available equipment.

This article will look at the benefits associated with hydrogen and fuel cell energy systems compared to fossil fuel and chemical alternatives as well as the inherent costs associated with a fuel cell on-demand generator. This analysis will show that it is not only technically feasible to use hydrogen for on-demand energy in certain, but also that it can be more economic than the alternatives. Diesel generators are valuable when used only for applications that have short run times (less than eight hours per day) and where they are in proximity to a low-cost fuel source. For longer run times, and when used in more remote and extreme conditions, renewable hydrogen generators are an ideal solution for providing on-demand energy.

Because hydrogen fuel can be generated with renewable energy, hydrogen offers the truly distributed energy solution. Pairing a hydrogen storage system with a solar panel or wind turbine eliminates the need to refuel the unit, enabling distributed energy solutions in even the most remote locations. Figure 1 displays how a storage system works, utilizing solar or wind power to store extra electricity as hydrogen within tanks, and then using the hydrogen as needed throughout the day in a fuel cell.

While the upfront cost is indeed low for a diesel powered generator of a comparable size, the end result is a much smaller bottom line for the project because of fuel expenses. While a hydrogen generating system is much more expensive, the equipment is highly advanced and does not need expensive diesel fuel.

As shown in Figure 3, fuel costs can be a huge expense for a diesel powered generator. The lines describe scenarios comparing two generators of baseload 50-kW capacity-one using diesel, one using renewable hydrogen. After seven years, the fuel costs alone from the diesel generator operating only eight hours per day have exceeded $100,000. If you are running a generator around the clock, you will spend more than a $100,000 by Year 2. This disparity is due to the nature of fuel costs between the two systems. In all instances you will be paying at least around $4 per gallon for a typical diesel or gasoline fuel. In instances where geography, terrain, and weather can constrain the supply of fuel, the cost of diesel generation is much higher than that. For a renewable hydrogen storage system, this fuel cost is completely eliminated-the total energy consumed by the system comes for the primary wind turbine and/or solar photovoltaic (PV) generators.

It should also be noted that while fuel cost contributes to a large proportion of the operating cost of most generators, this is not the only variable to consider. Maintenance, downtime, safety concerns, and costs related to fuel (i.e., transporting diesel to the generator site) are all factors that will play significantly into the long-term operating costs of generator sets. According to Financial Energy Management, maintenance costs of a diesel generator run about $0.006 per kilowatt-hour. If you are running around the clock, that ends up being about $3,000 per year. While maintenance on a hydrogen system isn’t completely negligible ($500$1,000 for a comparable 50-kW system), the direct and indirect costs of maintaining a diesel generator, like the amount of downtime to service the equipment, add up quickly.

One of the most common uses of renewable hydrogen energy storage systems is for providing power to remote telecommunications infrastructure. In less-developed regions around the world, hydrogen generators and employing fuel cells can help operators reduce the costs and downtime of their critical assets. In some areas of the world, diesel fuel can cost upwards of $6 per gallon as in Sub-Saharan Africa. In this region of the world, diesel is the primary fuel for electricity generation mostly due to the lack of infrastructure in the region-including railroads and pipelines for transporting coal and natural gas, as well as transmission lines for distributing electricity. Additionally, the majority of Sub-Saharan Africa does not have paved roads, which also complicate the delivery of diesel fuel from refinery to end user. Weather and political strike often constrain fuel supply in less rapidly developing countries; many African countries complain of a lack of power and running water for several days on end because of this. All these issues makes a renewable energy powered generator an attractive offering.

The numbers in Figure 4 are talking about existing market, but for a long-term investment in a distributed power system, one has to look into the future. Since 1990, the crude oil price has jumped from around $20 to $90 per barrel today as in Figure 4; to make things worse, many countries in the Persian Gulf have seen a predictable near future when their oil reserve may exhaust. Given the decreasing supply and growing price of fossil fuel nowadays, the client will see a more and more costly generator set, running on diesel or gasoline.

Therefore, an inherent demand for systems with lower operational cost will undoubtedly rise, maybe slowly at the beginning, but very steadily in the next decade. Many companies around the world have identified this trend, and started innovations and collaborations in this direction.