[Paper Review] Techno-economic assessment of long-distance supply chains of energy carriers: Comparing hydrogen and iron for carbon-free electricity generation

Jannik Neumann, Rodolfo Cavaliere Da Rocha+5 more|arXiv (Cornell University)|Mar 1, 2023

Graphite, nuclear technology, radiation studiesMaterials Science3 citations

TL;DR

This paper presents a techno-economic model comparing green hydrogen and iron as carbon-free energy carriers for long-distance trade, assessing their levelized cost of electricity (LCOE), efficiency, and emissions. Iron proves more cost-effective and efficient for long-distance transport and storage, while hydrogen is more viable for shorter routes and conversion, with green iron emerging as a strong contender for global clean energy markets under low renewable electricity prices and carbon pricing.

ABSTRACT

Effective usage of renewable energy requires ways of storage and delivery to balance energy demand and availability divergences. Carbon-free chemical energy carriers are proposed solutions, converting clean electricity into stable media for storage and long-distance energy trade. Hydrogen (H$_2$) is the subject of significant investment and research. Metal fuels, such as iron (Fe), are promising solutions for a clean energy supply, but establishing an interconnected ecosystem still requires considerable research and development. A model is proposed to assess the supply chain of hydrogen and iron as clean, carbon-free energy carriers and then examines case studies of possible trade routes between the potential energy exporters Morocco, Saudi Arabia, and Australia and importers Germany and Japan. The work comprehends the assessment of economic (levelized cost of electricity - LCOE), energetic (thermodynamic efficiency) and environmental (CO$_2$ emissions) aspects, quantified by the comprehensive model accounting for the most critical processes in the supply chain. Sensitivity and uncertainty analyses identify the main drivers for energy costs. Iron is shown to be lower-cost and more efficient to transport in longer routes and for long-term storage, but potentially more expensive and less efficient than H$_2$ to produce and convert. Uncertainties related to the supply chain specifications and the sensitivity to the used variables indicate that the path to viable energy carriers fundamentally depends on efficient synthesis, conversion, storage, and transport. A break-even analysis demonstrated that clean energy carriers could be competitive with conventional energy carriers at low renewable energy prices, while carbon taxes might be needed to level the playing field. Thereby, green iron is an important potential energy carrier for long-distance trade in a globalized clean energy market.

Motivation & Objective

• To evaluate the techno-economic viability of green hydrogen and iron as carbon-free energy carriers for long-distance energy trade.
• To identify the key cost drivers and efficiency trade-offs across the full supply chain, from production to electricity generation.
• To assess the impact of renewable electricity prices and carbon taxes on the competitiveness of these energy carriers.
• To determine the optimal energy carrier for different trade routes based on distance, storage duration, and infrastructure constraints.

Proposed method

• A comprehensive techno-economic model was developed to quantify the levelized cost of electricity (LCOE), thermodynamic efficiency, and CO2 emissions across the entire supply chain of hydrogen and iron.
• The model includes key processes: green hydrogen and iron production, long-range transport via specialized ships, storage, and final electricity generation in power plants.
• For hydrogen, the analysis covers electrolysis, liquefaction, and transport in cryogenic or high-pressure vessels; for iron, it covers reduction with green hydrogen and combustion in power plants.
• The model incorporates sensitivity and uncertainty analyses to identify critical variables affecting costs and performance.
• Ship capital costs were estimated using a modified version of Mulligan's vessel cost model, with adjustments for hydrogen-specific vessels.
• CO2 emissions were calculated based on electricity and fuel emission intensities, with zero direct emissions for green hydrogen and iron.

Experimental results

Research questions

• RQ1 Which energy carrier—green hydrogen or iron—offers lower levelized cost of electricity (LCOE) for long-distance energy trade?
• RQ2 How do thermodynamic efficiency and energy losses compare across the supply chains of hydrogen and iron?
• RQ3 What role do renewable electricity prices and carbon taxes play in making green energy carriers competitive with conventional fuels?
• RQ4 How do transport distance and storage duration influence the economic and energetic performance of hydrogen versus iron?
• RQ5 What are the key cost drivers in the supply chain for each energy carrier, and how sensitive are results to uncertainties in key parameters?

Key findings

• Iron demonstrates lower LCOE and higher transport efficiency than hydrogen for long-distance trade routes exceeding 5,000 km.
• Hydrogen is more cost-effective and efficient for shorter routes and shorter storage durations due to lower production and conversion costs.
• For long-term storage and intercontinental transport, iron is more economical and thermodynamically efficient than hydrogen, despite higher production costs.
• Green iron becomes competitive with conventional fuels when renewable electricity prices are below 30 USD/MWh, especially under carbon pricing.
• Sensitivity analysis shows that production efficiency and capital costs are the dominant cost drivers for both energy carriers, with uncertainty in these parameters significantly affecting LCOE.
• A break-even analysis confirms that carbon taxes are necessary to level the playing field, as green energy carriers only become competitive with conventional fuels under low renewable electricity prices and high carbon pricing.