Hydrogen is a very valuable alternative to fossil fuel for distributed energy generation, delivering a high powered solution with minimal environmental and safety concerns. Green businesses, telecomm providers, governments, and renewable energy advocates can now produce on-demand energy for their assets, at minimal cost and using commercially available equipment. This article will look at the benefits associated with hydrogen and fuel cell energy systems compared to fossil fuel and chemical alternatives as well as the inherent costs associated with a fuel cell on-demand generator. This analysis will show that it is not only technically feasible to use hydrogen for on-demand energy in certain, but also that it can be more economic than the alternatives. Diesel generators are valuable when used for applications that have short run times (less than 8 hrs per day) and where they are physically close to a low cost fuel source. For longer run times, and when used in more remote and extreme conditions, renewable hydrogen generators are an ideal solution for providing on-demand energy.
Because hydrogen fuel can be generated with renewable energy, hydrogen offers the truly distributed energy solution. Pairing a hydrogen storage system with a solar panel or wind turbine eliminates the need to refuel the unit, enabling distributed energy solutions in even the most remote locations. In Figure 1 below, you can see how a storage system works; utilizing solar or wind power to store extra electricity as hydrogen within tanks, then using the hydrogen as needed throughout the day in a fuel cell.
Unlike with a diesel generator, which must be refueled when the tank runs dry, a hydrogen energy storage system with solar or wind generation refuels its own tanks using ambient renewable electricity. Additionally, due to the lack of moving parts in the electricity generating fuel cell (the component of the system that turns hydrogen into electricity) a hydrogen energy storage system can run without supervision or routine maintenance. There isn’t a diesel generator on Earth that can say that. Finally, because the fuel source is derived from renewable energy and hydrogen produces only water vapor when burned, a hydrogen energy storage system is the epitome of a green on-demand power solution.
Hydrogen Generator Fuel Costs can be of Minimal Concern
While a renewable hydrogen generating system will have a higher initial capital cost than most any diesel or gas powered generator (Figure 1), the cost savings over the course of the equipment’s lifetime will more than make up for the difference in capital outlay (Figure 2).
While the upfront cost is indeed low for a diesel powered generator of a comparable size, the end result is a much smaller bottom line for the project because of fuel expenses. While a hydrogen generating system is much more expensive, the equipment is highly advanced and does not need expensive diesel fuel.
As you can see from Figure 2 below, fuel costs can be a huge expense for a diesel powered generator. The lines describe scenarios comparing two generators of baseload 50kW capacity – one using diesel, one using renewable hydrogen. After 7 years, the fuel costs alone from the diesel generator operating only 8 hrs/day have exceeded $100,000. If you are running a generator around the clock, you will spend more than a $100,000 by Year 2. This disparity is due to the nature of fuel costs between the two systems. In all instances you will be paying at least around $4 / gal for a typical diesel or gasoline fuel. In instances where geography, terrain, and weather can constrain the supply of fuel, the cost of diesel generation is much higher than that. For a renewable hydrogen storage system, this fuel cost is completely eliminated – the total energy consumed by the system comes for the primary wind turbine and/or solar PV generators.
It should also be noted that while fuel cost contributes to a large proportion of the operating cost of most generators, this is not the only variable to consider. Maintenance, downtime, safety concerns, and costs related to fuel (i.e. transporting diesel to the generator site) are all factors that will play significantly into the long-term operating costs of generator sets. According to Financial Energy Management, maintenance costs of a diesel generator run about $.006/kWh. If you are running around the clock, that ends up being about $3000 / year! While maintenance on a hydrogen system isn’t completely negligible (between $500 - $1000 for a comparable 50kW system), the direct and indirect costs of maintaining a diesel generator, like the amount of downtime to service the equipment, add up quickly.
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