Economic analysis of blue and green hydrogen production in Oman: comparison of various energy sources mix

Hydrogen (H₂) is critical in transitioning from fossil fuel energy systems. It can be produced via different technological processes and sources. One such method for producing green H₂ is water electrolysis. Research indicates that utilizing Hybrid Renewable Energy Sources (HRESs) to power electrolysis can lead to over 80% reduction in emissions compared to the fossil-powered process. This study aims to conduct an economic evaluation of four schemes of green H₂ production powered by HRESs and blue H₂ production by Steaming Methane Reforming (SMR) with byproduct CO₂ captured and sequestered underground in Oman, based on the Levelized Cost of Energy (LCOE) and H₂ (LCOH). The four analyzed schemes are: (1) stand-alone PV-WT (Solar Photovoltaic and Wind Turbines) connected to 1MW-1GW PEM electrolyzer, (2) grid-connected PV-WT to 1MW-1GW PEM electrolyzer, (3) grid-connected PV-WT-CPG (CO₂ Plume Geothermal) to 100MW electrolyzer, and (4) extended scheme #3 integrated with a SMR unit, producing blue H₂. The economic analysis was conducted using the GETEM Excel® spreadsheet model. The outcomes reveal that, at 100MW electrolyzer capacity, scheme #3 has the lowest LCOH of 4 $/kg and an LCOE of 0.2 $/kW (capEx ~ $400M), while scheme#1 comes with the highest LCOH and LCOE of 8 $/kg and 0.8 $/kW, respectively (capEx ~ $21.5M). Whereas scheme #2 achieved an LCOE of 0.3 $/kWh and an LCOH of 6 $/kg. In contrast, scheme#4 has the lowest LCOH of 2 $/kg compared to the three green H₂ productions. The results suggest that including geothermal energy, fed into a grid, can reduce green H₂ production costs and align with SDG7: Affordable and Clean Energy. More importantly, using natural gas and HRESs in Oman for hybrid blue and green H₂ production is the most feasible approach, particularly in the next few decades of the transition from a fossil to a carbon-free energy system. Graphical abstract: (Figure presented.).