Prior to now week I’ve been concerned in an odd battle with researchers on the Worldwide Council on Clear Transportation (ICCT). I’ve been attempting to elucidate to them why their costing of electrical energy for hydrogen manufacturing makes completely no sense, and I haven’t been capable of get by way of to them. It seems I used to be giving them an excessive amount of credit score for understanding something in any respect about electrical energy technology and distribution.
What’s been occurring? Effectively, the ICCT launched a serious complete value of possession report not too long ago for heavy items automobiles in Europe. These are the massive vehicles that carry 35 tons of products alongside the highways. It had three extraordinary claims that had been clearly and clearly in error. The primary declare was that manufacturing hydrogen at a refueling station from electrical energy and water could be value aggressive with diesel in 2030. The second declare was that the vitality prices per kilometer could be solely 50% greater than utilizing electrical energy in battery electrical automobiles in 2030. The third declare was that hydrogen could be solely 10% costlier than utilizing electrical energy in battery electrical vehicles in 2050 on a per kilometer vitality foundation.
These are extraordinary claims and as such require extraordinary proof, however there was no extraordinary proof offered.
Why are the claims extraordinary? As a result of manufacturing hydrogen with electrical energy and utilizing it in gas cells is at finest a 3rd of the vitality effectivity of utilizing it in battery electrical automobiles. Thrice the electrical energy will value 3 times as a lot. The primary is physics. The second is economics.
Was there any recognition within the report or ICCT touchdown web page that the claims had been extraordinary? No. Was there deep proof within the report that justified the extraordinary claims? No. There was simply the belief of value of a kilogram of manufactured hydrogen could be primarily based on grime low cost electrical energy and that this was fully cheap.
There are potential methods round this which have their very own deep flaws, however in case you are on the finish of the distribution grid shopping for electrical energy from a utility and both placing it into batteries or placing it into manufacturing hydrogen, you might be paying the identical value for the electrical energy at any given time. That is extremely fundamental stuff about shopping for electrical energy from utilities.
I revealed a chunk mentioning the clear failure and tracing it to an earlier ICCT research by completely different authors which had very naive assumptions about electrical energy charges being grime low cost for grid-delivered electrons to refueling stations whereas the identical wires bringing the identical electrons for battery electrical automobiles had been priced at full industrial charges.
I assumed, in good religion, that the ICCT would acknowledge that the identical electrons on the identical place by way of the identical wires wouldn’t value completely different costs, and that the brand new research’s authors would understand the error and so they and the ICCT would retract and repair the report with the extraordinary claims. No such luck.
What occurred subsequent was that one of many lead authors doubled down on the assertion, defending their methodology as deliberate and applicable.
So I attempted once more, explaining that on the station firmed electrical energy required a bunch of stuff and that inexperienced electrons below PPAs wanted to not solely have additionality however temporality and locality. Good subtle stuff for a dialogue with individuals who perceive electrical energy. Any luck? No.
At this level the lead writer was getting aggravated, attempting to defend what was clearly indefensible, vastly decrease charges for electrical energy for manufacturing hydrogen on the identical place the place electrons would alternatively be put into batteries. They had been arguing about how a lot roughly they had been pricing electrical energy at, claiming my numbers had been improper, once they didn’t perceive that the whole foundation of their argument was flawed.
Sadly, I misunderstood their stage of sophistication associated to wholesale vs industrial electrical energy charges, PPAs and RECs. So right here’s a little bit of a primer, going again to stuff I assumed that that they had understood however clearly didn’t. I had been asserting naivety on the a part of the primary research’s authors, however hadn’t realized how naive the research was or that the authors of the brand new research didn’t know the fundamentals both.
To be clear, I’m not attempting to choose on the ICCT or the authors of the trucking TCO paper. They don’t perceive some issues and as such the edifice of their evaluation is just improper. They’ve to repair that. And if the ICCT will get one thing this fundamental improper, so do quite a lot of different organizations. And which means quite a lot of the discussions round hydrogen for vitality are fatally flawed.
So listed here are the fundamentals.
![Diagram showing separate transactions for PPAs, RECs and commercial electricity by Michael Barnard, Chief Strategist, TFIE Strategy Inc., icons by ChatGPT & DALL-E](https://cleantechnica.com/wp-content/uploads/2023/11/Screenshot-2023-11-23-at-8.00.34 AM.png)
An influence buy settlement (PPA) for renewable vitality and the related renewable vitality certificates (REC) are fully decoupled from the industrial value of electrical energy an organization pays a utility.
PPAs pay for building of a wind or photo voltaic farm that’s connected to the grid. The group paying for the PPA receives RECs. They promote RECs on a marketplace for these devices. The sale of RECs pays for the PPA, roughly. A bunch throughout the monetary facet of the corporate does this on their behalf. The corporate does this to make sure that someplace on the grid there are inexperienced electrons whatever the electrons that they’re buying at their amenities.
In the meantime, fully individually from the PPA and REC group, an operations group indicators contracts with utilities native to their amenities for provision of electrical energy at industrial charges. The native electrical utility isn’t a celebration to the PPA and even whether it is, it’s a unique a part of the utility and a unique contract. It doesn’t change its industrial charges for electrical energy as a result of the corporate has a separate contractual settlement with different entities to purchase inexperienced electrical energy and promote RECs. They’re fully decoupled processes.
Separate teams. Separate financial flows. Separate transactions. Separate authorized agreements. Completely different events. Not coupled however decoupled.
For a refueling station on a freeway the place vehicles will refuel, the PPAs and RECs are fully irrelevant to the value of electrical energy delivered to the station. The one related issue is the native utility and their industrial charges. Shopping for electrical energy from the utility for batteries or hydrogen has no bearing on the value of electrical energy. The value of electrical energy at any hour or stage of demand can be equivalent in each circumstances.
There are complexities round peak energy calls for, managing peak energy and arbitraging time of use billing which I additionally alluded to in my earlier articles, assuming I used to be coping with researchers who grasped the fundamentals above. Consequently, a lot confusion, not a lot gentle on their facet. There’s a minor exception case the place wind and photo voltaic farms are in-built shut proximity to the ability which is buying the electrical energy and the utility offering the electrical energy is an integral a part of the PPA and REC contractual agreements. This received’t apply to refueling stations on highways for probably the most half, would apply equally to battery electrical and hydrogen gas cell vehicles and shouldn’t be the bottom case.
And so, this piece, going again to what I assume is the basic lack of knowledge on their half about how electrical energy is definitely purchased and offered. That is, once more, actually fundamental stuff about pricing electrical energy. My assuming that individuals who clearly favored molecules for vitality would perceive this regardless of a couple of years of regularly operating up in opposition to the identical lack of comprehension is my unhealthy. I ought to have began with the fundamentals.