Making economic Sense of Green Hydrogen Power

Sebastiaan Ruijgrok's picture
Solutions Marketing Manager Siemens Energy

Sebastiaan Ruijgrok is Marketing Manager at Siemens Energy, currently mainly focused on hydrogen. He has worked for Siemens Energy in different positions and responsibilities for more than 13...

  • Member since 2021
  • 13 items added with 3,982 views
  • Sep 22, 2021

It’s well known that a common concern for producing green hydrogen is cost. But the outlook is not as dire as some may suggest. Here an example of a combined cycle hydrogen power plant paired up with proton exchange membrane (PEM) electrolyzers that not only improves the plant’s environmental performance but also makes a lot of sense economically.

Despite the every-increasing share of renewables in our energy mix, gas-fired power plants are still crucial to the security of energy supply.  They produce electricity when the sun doesn’t shine, the wind doesn’t blow, they top up the grid during periods of peak demand – and they emit CO2, albeit a lot less than coal-fired power plants.  But their carbon footprint can be reduced by burning a mixture natural gas and hydrogen. And not just any hydrogen, but green one that can be produced with the help of a coupled electrolyzer that produces hydrogen when there is renewable power to spare.

The beauty of this scenario is that it ensures that the power plant is flexible and future proof, as the share of green hydrogen can be increased until it reaches 100 percent. At Siemens Energy, we have a vision of a combined cycle hydrogen power plant that would utilize renewable energy or spare capacity to generate green hydrogen using Siemens Energy’s proton exchange membrane (PEM) electrolyzers – the latest model being the Silyzer 300. Now, it’s well known, though, that a common concern for producing green hydrogen is cost. But the outlook is not as dire as the hearsay may suggest.

Let’s take a Siemens Energy SGT5-9000HL gas turbine that can burn up to a 50 percent hydrogen mix. For our example, we’ll pair it with nine Silyzer 300 electrolyzers and six tonnes of H2 storage. Currently a typical day with optimum weather for this dual firing power plant in the Netherlands, the electricity price can be sold for varies dramatically. Starting the day in the early hours of the morning at €70/MWh, it climbs to a peak of around €100/MWh in the morning and evening peak periods but drops as low as €50/MWh at other times. In the future with the volumes of available solar power increasing the variation would be even more dramatic. With optimum weather conditions and the sun shining brightly, the variation is even more dramatic. Between the hours of 9 am and 5 pm, the price does not climb above €10/MWh and even dips into negative figures for five hours during the day, reaching a nadir of -€40 mid-afternoon. During these 9 hours, the average electricity price was -6.8 euro/MWh. Not an ideal scenario for a power plant operator.

However, if that power plant was coupled with electrolyzers to produce hydrogen, the picture is far more advantageous. During the nine hours of low prices, the power could be diverted to the electrolyzers to produce green hydrogen. This hydrogen can be stored and used for co-firing in the turbines saving on fuel, increasing grid earnings, and reducing emissions. In fact, the revenue outlook changes dramatically. Making assumptions that the natural gas costs €8/MMBTU and the current rate of CO2 tax was €55 then over the day, there is a total savings of €45,401. This comprises €23,431 saving on fuel, an extra €11,425 in grid earnings and a reduction of CO2 tax of €10,545. Aside from the financial benefit, there is also improved environmental performance with a reduction in CO2 emissions of over 190 tons a day.

This solution is not only relevant for large-scale power plants like the one we have been speaking about with the SGT5-9000 turbine. The optimized standard integration of hydrogen production, storage, re-electrification, and heat recovery can be adapted to power plants of all sizes. A system using the SGT-400 gas turbine can cater for outputs as low as 10 MW. Particularly in Europe, which has smaller district heating systems, this size can still be effective. It also complements the growing trend toward smaller, decentralized power generation. 


Matt Chester's picture
Matt Chester on Sep 23, 2021

But their carbon footprint can be reduced by burning a mixture natural gas and hydrogen. And not just any hydrogen, but green one that can be produced with the help of a coupled electrolyzer that produces hydrogen when there is renewable power to spare.

What's the scale of carbon reduction that can be expected with this practice today, and how quickly can that be ramped up in the coming years? 

Sebastiaan Ruijgrok's picture
Sebastiaan Ruijgrok on Sep 24, 2021


Thank you for your question Matt. And indeed, the hydrogen can be produced using renewable power from the grid, making the hydrogen 'green'. Back to your question. The scale of carbon reduction in principle is huge, already today. However, looking realistically at the situation of today I do not expect gigawatts of hydrogen to be produced and re-electrified neither this year or next. Notwithstanding, the technology for efficient and high capacity hydrogen production through electrolysis is undergoing fast developments and the amount of renewables connected to the grid is ever increasing. This means that markets can be ready likely sooner than later. I will make the answer more concrete with a rough example that can be realized today. By coupling for instance three silyzer 300 electrolyzers from Siemens Energy to an existing SCC-800 power plant of 182 MW, these units could produce hydrogen during sunny period of the day. This hydrogen can in its turn be used to run the power plant with a mixture of natural gas and hydrogen during the off-peak solar hours. On the current maximum hydrogen mixture we can achieve in such plant today, a reduction of 47% in CO2 emissions compared to running on only natural gas. This means saving many tons of CO2 per hour of power generation.

Matt Chester's picture
Matt Chester on Sep 24, 2021

Thanks for the follow up, Sebastiaan-- I agree hydrogen is a long-term play and can play a role in the whole economy decarbonization (especially where direct gas burn is used like in heating and industrial uses). They key is to make sure that setting up the hydrogen applications doesn't become a way to keep up the demand of gas rather than moving swiftly towards green hydrogen sources.


Thanks again

Sebastiaan Ruijgrok's picture
Thank Sebastiaan for the Post!
Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.
More posts from this member

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »