How digitalization of hydrogen production will enable better, cleaner industries
H2 Green Steel champions the idea that digitalization is a massive driver for optimizing large-scale production of green hydrogen, enabling cost-efficient production of everything from green steel to ammonia and methanol. Our CDO Olof Hernell and EVP Head of Business Unit Hydrogen Kajsa Ryttberg-Wallgren spearheads the development of our two optimization softwares and shared how digitalizing green hydrogen production will take steel production into the future.
Still early in its development, green hydrogen production for industrial applications is expected to grow fourfold by 2050.[1] The reason why most industries have not yet adopted green hydrogen production technologies largely comes down to cost, as it historically has been far higher than other energy feedstocks including grey and blue hydrogen. Therefore, it is crucial to ensure accessibility to the most viable green hydrogen production methods, which in an industrial setup requires automation and digitalization.
“Since there can't be any quality measures of a hydrogen gas molecule, ultimate efficiency is the only target. The price of production and the accumulated carbon emissions in the process is what matters,” Olof says.
When establishing a green hydrogen plant, there are two main factors to consider: the costs for hydrogen production and the total cost of ownership. According to Kajsa, there has to be a holistic view of the design of the factory and running the plant, for everything to be as cost efficient as possible.
“The total cost of ownership is from the day you start designing the factory until you close it down. We believe that the only way to keep costs down is to combine the knowledge that you accumulate over time with the implementation of data, using that data over and over again to improve how the plant operates,” she says.
When producing green hydrogen, the electricity accounts for approximately 70 percent of the total cost. In most regions, the renewable energy needed to power the electrolysis is highly intermittent, requiring advanced production timing and storage management to at all times ensure feedstock to the next step in the process, the iron production. That is why H2 Green Steel has created a hydrogen plant operations optimization software that will optimize hydrogen production at all times to keep the cost as low as possible.
“It's about pushing the industry forward in terms of producing large volumes of green hydrogen at the lowest possible cost and a part of that is winning the software game. In the next few years there will be a lot of new technology coming to market and as we innovate at H2 Green Steel, we think it is a good idea to protect our intellectual property to not be limited in our way of operating,” says Olof.
Kajsa adds: “It is not just a fancy algorithm – the software we are creating will help us to achieve the lowest cost of production regardless of what geography we operate within.”
Optimizing the production planning enables H2 Green Steel to cycle plan the production of the electrolyzers on a very granular basis, presenting a key opportunity to add value to our local communities: the ability to feed excess energy back to the grid.
“As a huge consumer of electricity, we will have the opportunity – and I would say obligation – to help balance an increasingly intermittent grid,” says Olof.
To design a hydrogen plant in a data-driven way where different electrolysis technologies are combined with different types of storage technologies, Olof and Kajsa, together with their teams, have developed an additional, more strategic software for hydrogen plant configuration optimization. The purpose is to build green hydrogen plants that will reach the lowest possible cost level, also called the levelized cost of hydrogen (LCOH), which can also be used to measure the overall competitiveness of hydrogen.
“Once you design a plant in a bad way, you will not have the lowest LCOH – even if you add an optimization system – so getting it right from the start is crucial,” Kajsa says, adding that the configuration optimization software will allow H2 Green Steel to not only build factories in a modular way, making the design process more time and cost efficient.
Based on the prerequisites for a specific region, the software will not only provide a LCOH with design layouts and technology choice for the hydrogen plant, but also where there is access to an abundance of renewable electricity, allowing H2 Green Steel to ring-fence ideal locations for green hydrogen production across the globe.
“In simplified terms, we have created a database comprising all our learnings accumulated over the past one and a half years. Then we have added a model that enables the system to recommend us the optimal setup depending on factors such as output requirements and electricity supply. Instead of spending six months on it, you could have a green hydrogen plant design concept ready in about two weeks,” she says.
Finally, what is your vision going forward from a green hydrogen point of view?
“Our focus is to be the leader in large-scale green hydrogen production for industrial offtake. We need to have an excellent collaboration throughout our value chain – from technical partnerships to customers – which requires a strong backbone of software to ensure cost efficiency. We also need to work closely with the next generation of electrolyzer companies to develop the technology to continuously improve our efficiency. Because we're not just building one plant – we are replicating the process all over again, allowing us to be quicker than anyone else when it comes to conceptualization, plant design and engineering, executing a hydrogen plant project much faster than our competition,” Kajsa says.
To support these digitalization efforts and protect our intellectual property, H2 Green Steel has also filed two patent applications in the EU related to green hydrogen plant optimization.
[1] International Energy Agency