Swedish hydrogen tech project Hybrit has reduced hydrogen production costs by up to 40% by using a steel-lined rock cavern pilot storage facility to tap into low-cost grid power.
The Hybrit project, which is a collaboration between steelmaker SSAB, iron ore miner LKAB and power company Vattenfall, tested hydrogen storage commercially on the electricity market for a month, cutting hydrogen production costs by 25%-40%, the group announced.
"The mission was to produce hydrogen using fossil-free electricity at a variable electricity price with the lowest possible cost, for example during certain parts of the day or for longer periods when weather-dependent electricity generation was in good supply," Hybrit said.
"Using the electrolyzers and storage, the captured price for the hydrogen production was decreased by 25%.''
Mikael Nordlander, Vattenfall head of industry decarbonization
"During the test period, the spot price of electricity in the price area was comparably low, on average around Eur20/MWh [$21/MWh]," Vattenfall head of industry decarbonization, Mikael Nordlander, stated. "Using the electrolyzers and storage, the captured price for the hydrogen production was decreased by 25%. Since the full cost of hydrogen also includes the capital cost, the figures for a small pilot plant will not be representative."
According to a report by S&P Global, Hybrit senior project manager Marie Anheden said the results of the test were ‘very good’ despite the low power price volatility witnessed during the test period.
"By applying it in actual circumstances, we were able to follow in real time how much money was saved by using what was stored."
Marie Anheden, Hybrit senior project manager
According to a report by S&P Global, Hybrit senior project manager Marie Anheden said the results of the test were ‘very good’ despite the low power price volatility witnessed during the test period.
"By applying it in actual circumstances, we were able to follow in real time how much money was saved by using what was stored," Anheden said in the statement.
The steel-lined rock cavern pilot storage facility holds hydrogen gas pressurized up to 250 bar, and is located next to the Hybrit pilot plant in Lulea.
"Large-scale hydrogen storage makes it possible to adapt electricity consumption in a system of varying availability and prices and at the same time can supply the industry with hydrogen more stably and cost effectively," Nordlander said in the statement. "Used on a large scale, hydrogen storage can have a dampening effect on electricity price variations, which would favour investments in new electricity generation from all forms of fossil-free power."
At full scale, the facility could produce enough hydrogen to power a full-size steel mill for up to four days, Hybrit said.
LKAB senior vice-president for energy and climate Stefan Savonen said his company would change the entire iron ore production process for fossil-free iron sponge using hydrogen, requiring over 1Mt/yr of the gas and 70 TWh a year of renewables by 2050, which he emphasized made cost reductions all the more critical.
The storage facility started operations in 2022, and tests are due to continue through to 2024.
Source: S&P Global
