3.1. Results of Life Cycle Assessment
A summary of material flow and emissions calculations per unit produced are shown in
Table 3 and
Table 4. It is noted that the production of H
2 and O
2 reduces the use of fossil fuels by almost 21 to 94% and 100% air depletion; however it consumes more water and land (limestone). This demonstrates that AEW is a more sustainable fuel than Brazilian steam reforming of natural gas (SRNG) and air cryogenic (AC) plants, which is a gray H
2, and its sustainability increases with the production volume of the plant. It is noted that the AEW process reduces close to 17 kg of CO
2 for each 1 kg H
2 produced. This corresponds to 585.87 t CO
2 for the year (carbon credit).
There are no warnings about gaseous emissions from cryogenic hospital oxygen production. However, Shourkaei et al. [
40] reported in a life cycle analysis of cryogenic O
2 production that 1.7 t of depleted air are emitted for each 1 kg H
2 produced (converted values of kg O
2 for kg H
2). Carbon dioxide is responsible for 7800 g/kg H
2, 425 g of particulate matter and 1196 g sulphor dioxid for 1 kg H
2. Even during patient use, for every 1 kg of hospital oxygen consumed, there is an emission of 1.375 kg of CO
2. This CO
2 emissions is 46% of the total GHG emissions, 99.6% of particulate matter, 99.8% of sulphur dioxide of SRNG/AC processes and depleted air is 100% of total air depletion, ammonia and others (i.e., argon and helium).
3.2. Economic Evaluation of H2 Production Project
As average values of electricity and water prices are used, to reduce logistical costs it should be considered that the hydrogen production plant can be installed in any location close to highways and the market that absorbs the product. Thus, the size of the plant must be dimensioned according to the demand of the region where it is installed. The following sequence demonstrates the economic viability for each production capacity of the plant (8.89 and 44.45 kg H2/h).
Table 5 shows how the balance sheets of each hydrogen production plant project studied in this work were composed. Both were analyzed using the maximum production capacity of each plant, as the demand for H
2 is much higher than the production. The sale price for the hydrogen was USD 2 USD/kg and for the hospital O
2 cylinder unit was USD 5 USD/Nm
3. The sale of hospital O
2 corresponds to 58.32% of the plant’s revenue and profit.
Figure 3 shows the breakdown of hydrogen production costs with plant size. As can be seen, the highest values refer to the variable costs, wages and investment. The composition of costs varies with the size of the hydrogen production plant. Thus, variable, rates and investment costs increase, while wages and maintenance costs decrease with the size of the plant.
Figure 4 shows the variation of the payback and break-even (BP) points on the effect of sale price and different production capacities. The payback was between 2 and 4 years after the sale price of 2 USD/kg H
2. The break-even point varied with the company’s production capacity, getting close to 60% of the production volume after commodity prices of 2 USD/kg, only with the sale price. The figure shows that production capacity is not enough to sustain the company economically when sale prices are below 1 USD/kg H
2.
It is noticed that there are not many variations of the curves in
Figure 3 because above 2 USD/kg, hydrogen does not have much influence on the production plant revenues, as already noted by Maggio et al. [
41] and Ngoah et al. [
42]. However, this H
2 production plant project is stable and sustainable, as the hospital oxygen price used in the calculations is 10% of the lowest value sold in Brazil. However, if there is no commercialization of the hospital oxygen, the project is unfeasible.
Figure 5 shows that IRR and ROI vary with sale price for different production scales. There is an increase in the IRR and ROI with the sale price. However, there is a great risk to the project at values of 1 USD/kg H
2, as the rate of return on the investment is between 5 and 10%, which is close to Brazilian inflation (it fluctuated between 5 and 10% between 2020 and 2022) [
34]. In these situations, the project would be economically unfeasible.
Thus, at 2 USD/kg, the best economic condition for H2 is found, because use of capacity volume was less than 60%, the payback is between 3 and 4 years, the IRR is between 25% and 45% and the ROI is between 250% and 588%.
Ji and Wang [
31] mentioned that the values found in the literature are between 5.73 and 8.54 USD/hg H
2, when using electricity from the power grid. This demonstrates that the production of H
2 using electricity from the Brazilian energy grid is viable and that the viability has increased with the increased production capacity of the H
2 plant.
By combining the sale of oxygen with that of hydrogen produced by electrolysis using photovoltaic energy, Maggio et al. [
41] and Ngoah et al. [
42] achieved competitive sale prices between 3.17 and 4.23 USD/kg H
2.
An analysis of the project’s sensitivity to changes in rates, such as the minimum rate of attractiveness (MRA), is showed in
Figure 6. As can be seen, the NPV decreases significantly with the increase of the RMA, and projects are not viable at RMA between 20 and 40%, according to its capacities. Larger production capacities overlap and have higher RMA (greater than 40% p.a.), indicating that they have more secure financial conditions. The smaller production capacity, although economically viable, puts the company’s situation at risk in countries such as Brazil, where inflation fluctuates up to 10% p.a.
Figure 7 shows the influence of the production volume on NPV, at 2 USD/kg H
2 and 5 USD/Nm
3 hospital O
2. It is observed that plants with a production of 35.56 kg H
2/h and 44.45 kg H
2/h are the ones that most resist changes in production volume; both simulations converged to a reduction in volume of 60%. Plants with a production of 17.78 kg H
2/h and 26.67 kg H
2/h remain economically viable until a 55% reduction in their production volume; however, the plant with only 8.89 kg H
2/h does not resist a 40% reduction in its production volume, indicating that they are the ones with the greatest financial risks.
A joint analysis of cost and revenue is shown in
Figure 8. This figure shows a product demand curve analogous to perfect competition and a non-linearly proportional variable cost. As can be seen, the curve of marginal costs and unit cost are found in the plant’s production capacity equivalent to four electrolytic kits, demonstrating that the greatest economic efficiency of this investment project is found at a production of 44 kg H
2/h (or four electrolysis kits). Mallapragada et al. [
43] also identified that costs reduce with the size of the hydrogen production plant.
Table 6 shows the summary of sensitivity analysis of production capacity at 2 USD/kg H
2 and 5 USD/Nm
3 hospital O
2, at the end of the 20 year project. Conceptually, the net present value (NPV) is the change in profit at the end of the project’s period; the payback is the time for the project to be paid and the break-even point (BP) is the minimum production volume for the company to make a profit. Internal rate of return on investment (IRR) is the maximum rate at which the project makes a profit, and return of investment (ROI) is the percentage profit on the initial investment. Note that with only 96% of the production volume (break-even point) the company starts to make a profit for 8.89 kg H
2/h capacity, indicating the high risk of this condition. For the others, the BP indicates greater security for these design conditions. It was found that the best condition for each plant capacity is a payback of less than 3 years, an internal rate of return on investment (IRR) greater than 31%, a break-even point between 53% and 68% of the total production volume, a return on investment above 400% and a net present value between USD 1.7 and 13 million. Briefly, the sensitivity analysis showed that all sizes of hydrogen production plant are economically viable, however the best financial condition was found at 35.56 kg H
2/h, corroborating
Figure 6.
3.3. Leveled Cost Analyses
Table 7 presents the results of the levelized costs of hydrogen for each production plant capacity. When comparing the unit costs with the values in
Table 2, it is noted that the cost of producing hydrogen is as low as that of hydrogen produced by the steam reforming of natural gas (SRNG) and four times smaller than those obtained from the energy grid of other countries [
25]. As can be seen, all levelized values of the cost of hydrogen in the table decreased with the increase in the production capacity of the hydrogen plant. In addition, they were the lowest price of energy sold in Brazil [
14,
15] and much smaller than those shown in other scientific research [
38], demonstrating the production of hydrogen via alkaline electrolysis using energy from the Brazilian grid is economically and environmentally viable [
44].
Yates et al. [
45] estimated a LCOH of USD 2.70/kg (75 USD/MWh) and used a Monte Carlo approach to explore a wide range of input assumptions, identifying key cost drivers, targets and the localized conditions necessary for competitive stand-alone dedicated PV powered hydrogen electrolysis. Mallapragada et al. [
43] studied H
2 production costs spanning the continental United States and through extensive sensitivity analysis, explored system configurations that had achieved USD 2.50/kg (69 USD/MWh) levelized costs.
Avargani et al. [
20] reports that there is currently no LCOH of green hydrogen below 70 USD/MWh. Viktorsson et al. [
38] reported a LCOH of 300 USD/MWh for hydrogen electrolysis using wind power. Ji and Wang [
25] reported a LCOH between 80 and 260 USD/MWh for all renewable energy sources and between 71 and 191 USD/MWh for energy grids. Thus, this work presents better results than those presented in the current literature and shows how to improve IRENA [
46] (USD 2.50/kg) forecasts to reach competitive value in 2030.
Figure 9 shows the percentage composition of GHG emissions for the Brazilian energy grid, according to the life cycle assessment. Although the Brazilian energy grid uses more than 80% of sustainable energy sources, it also uses fossil sources (natural gas and coke) and this characterizes the hydrogen obtained from the Brazilian grid as a yellow hydrogen. As noted, more than 80% of GHG emissions (3552 g/kg H
2) are from non-renewable sources used in Brazilian thermoelectric plants. Although it is considered one of the cleanest energy grids in the world, it is essential that the use of these sources be reduced to reduce emissions from the Brazilian grid.
This makes the Brazilian energy grid emit 4.27 kg of CO
2 for every 1 kg of hydrogen, which is similar to the emissions of hydrogen obtained by photovoltaic solar energy. Solar PV-based hydrogen plant generated GHG values between 3.787 and 48 kg CO
2 eq/kg H
2 obtained by Kolb et al. [
47], of 5.280 kg CO
2 eq/kg H
2 found for Ozawa et al. [
48] and of 5.100 kg CO
2 eq/kg H
2 obtained by Al-Breiki and Bicer [
49].
These results are also similar to the application of wind farms in hydrogen production, as the results presented by Ozawa et al. [
48] (1.2 kg CO
2 eq/kgH
2) and Al-Breiki and Bicer [
50] (3.6 kg CO
2 eq/kg H
2). However, most reports point to a range between 0.68 and 1.78 kg CO
2 eq/kg H
2 for domestic production of wind-based hydrogen [
47,
51,
52].
In addition, from 2019 to 2021 (the COVID-19 pandemic) the price of hospital oxygen varied between 5 and 16 USD/Nm
3 [
39], compromising the supply of this gas which is widely used in health networks. As this gas is a by-product of the production of hydrogen by alkaline electrolysis, this process may contribute to the reduction of prices and the supply of hospital oxygen [
41,
42].