Siemens Energy is targeting renewable hydrogen costs of $1.50/kg by 2025 based on a power cost of $16/MWh and a 100 MW electrolysis system running for 6,000 hours a year, managers said at Siemens' first hydrogen day March 19.
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This would be similar to Siemens' Haru Oni project in Patagonia, Southern Chile, due to start production in 2022, under which 55 million liters of e-gasoline by 2024 is to be supplied to automaker Porsche.
S&P Global Platts assessed the price of electricity-based hydrogen (Netherlands, PEM electrolysis including capex) at Eur4.04/kg on March 22.
"Green energy needs to travel from lowest cost regions to decarbonize demand centers," Siemens Energy CEO Christian Bruch said.
Vast amounts of low cost renewable power would be needed to make e-fuels competitive with conventional hydrogen by 2025, he said.
Electrolysis connected to a dedicated 200 MW wind farm could yield the renewable hydrogen equivalent of 0.023 million mt/year of diesel, Bruch said -- a tiny fraction of Europe's 450 million mt/year diesel market.
The company was preparing for gigawatt production of its Silyzer 300 PEM electrolyzer arrays, each array comprising 24 modules with a combined 17.5 MW input capacity producing up to 3,000 mt/year of hydrogen based on 75% efficiency.
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Current annual production capacity of 250 MW could be doubled by adding a second shift alone, Siemens' new energy unit head Armin Schnettler said adding that ramping up to gigawatt-scale would required capex in the middle-digit euro range.
The company expects its electrolyzer project portfolio to increase tenfold every four to five years with a first 100 MW Next Gen Silyzer targeted for 2023.
Siemens Energy is part of the H2Giga research project supported by the German government aiming for gigawatt-scale manufacturing of electrolyzers.
It is partnering with Air Liquide on a 200 MW project at the Port Jerome chemical complex near Le Havre, and plans a 50 MW electrolyzer at the Ludwigshafen petchem complex in Germany with BASF.
The company has also signed an agreement with the sovereign investment fund of Abu Dhabi for a green hydrogen demonstrator using solar energy.
Meanwhile Andreas Nauen, CEO of wind turbine subsidiary Siemens Gamesa, said green hydrogen demand could unlock 60 GW in additional wind capacity by 2030.
Twinning electrolysis with existing wind assets, meanwhile, offered a route to extended viability as initial support contracts ran out.
Siemens is working on integration of its electrolysis and wind turbine technology with a first pilot based on its 14 MW turbine planned for the mid-2020s.
Siemens Gamesa and Siemens Energy are investing Eur120 million ($143 million) into the venture, which is part of the German government's H2 Mare research program.
Siemens Energy was also working on making its gas turbines hydrogen-ready, chief technology officer Vinod Philipp said.
The company aimed for a first 100% hydrogen-fired turbine before 2030.
The EU has a target of 6 GW installed electrolyzer capacity by 2024 and 40 GW by 2030.