Techno-economic analysis of offshore wind-based hydrogen production in western Finland

Abstract

Finland has one of the most ambitious climate targets in the world, to reduce greenhouse gas emissions by 70% and become climate neutral by 2035. The rising average global temperature contributes to this determined goal and the possibility of limiting global warming by 1.5 ℃. To meet these goals, the share of renewable energy must increase. Offshore wind production is previously undiscovered in Finland, but research and development within the area are increasing. Energy storage is required to balance the intermittency of wind energy, and hydrogen production could be a solution. Paring the offshore wind farm with a hydrogen production system and storing the electricity in the form of hydrogen when the electricity demand is low. This thesis aims to provide a comprehensive overview of the feasibility, cost, and potential profitability of using offshore wind energy to produce hydrogen. The thesis includes an analysis of offshore wind-based hydrogen production in western Finland for two scenarios. The first scenario is offshore-based hydrogen production, and the second is onshore-based hydrogen production connected to an offshore wind farm. The information and results of this thesis can indicate these technologies' technical potential and competitiveness. The feasibility and economic potential of an onshore and offshore hydrogen system were studied. The levelized cost of energy (LCOE) and levelized cost of hydrogen (LCOH) were calculated to indicate how the system's competitive cost compared to the current LCOE and LCOH levels. The calculations included current data from existing cases and studies, including capital-, and operational costs of the system components and an estimation of the yearly electricity production. The planned offshore wind farm, Laine, intended to be built in the exclusive economic zone outside the coast of Pietarsaari in 2029, is used as a case study. The result showed that an electricity price competitive with market prices is only possible with an offshore wind farm connected to an onshore hydrogen production unit. The offshore hydrogen system includes too many losses to be efficient for electricity production and does not have a competitive electricity price. The price of hydrogen was competitive with green hydrogen (produced renewably) in base, best, and worst-case scenarios for both offshore and onshore hydrogen production.