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Abstract and Figures

Many intended to be useful inventions are not commercially successful because they do not meet market requirements. They are designed by engineers who are experts in their field, but they do not know the market requirements for their customers. The following article demonstrates how a hydrogen energy cycle device can be successfully introduced into the market with a clear and profitable business model under the current price situation. The business model is based on real market data and it can be demonstrated that an entire industry can be developing out of this business similar to the PV business. With clearly explained overview, substantiated and backed up by statistical data, a successful and profitable business plan is developed. It gives potential investors a clear picture of the technology and the market potential with the profits, benefits as well as quantity of customers.
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BUSINESS PLANS
FOR
HYDROGEN ENERGY DEVICES
Jordan, Frank
[Lecturer]
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Abstract
Many intended to be useful inventions are not commercially successful because they
do not meet market requirements. They are designed by engineers who are experts in
their field, but they do not know the market requirements for their customers.
The following article demonstrates how a hydrogen energy cycle device can be
successfully introduced into the market with a clear and profitable business model
under the current price situation. The business model is based on real market data and
it can be demonstrated that an entire industry can be developing out of this business
similar to the PV business.
With clearly explained overview, substantiated and backed up by statistical data, a
successful and profitable business plan is developed. It gives potential investors a clear
picture of the technology and the market potential with the profits, benefits as well as
quantity of customers.
Key Words:
Business model, hydrogen devices, fuel cells, batteries, electrolyser, hydrogen
storage, renewable energy, expansion of alternative energy, cloud computing,
networking.
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Content list
___________________________________________________________________
Introduction ............................................................................................................................. 4
Vision ........................................................................................................................................ 5
Methodology ........................................................................................................................... 5
Market Analysis ..................................................................................................................... 6
Hydrogen Energy Technologies ...................................................................................... 17
Fuel Cells ............................................................................................................................... 18
Electrolyzer ........................................................................................................................... 20
Hydrogen Tank ..................................................................................................................... 22
Power Inverter ...................................................................................................................... 25
Battery Pack .......................................................................................................................... 26
Energy Landscape in Germany ....................................................................................... 27
Approval Authorities .......................................................................................................... 28
Companies Operating in Germany ................................................................................. 29
Energy Calculations ........................................................................................................... 29
Energy Input at Renewable Site ...................................................................................... 31
Economic Modelling ........................................................................................................... 31
Key Assumptions ................................................................................................................ 32
Cost Structure ...................................................................................................................... 33
CAPEX .................................................................................................................................... 34
OPEX ....................................................................................................................................... 40
Cost of Electricity ................................................................................................................ 40
Revenue Streams ................................................................................................................ 41
Selling to the grid ................................................................................................................ 42
Model Operation .................................................................................................................. 43
Options and Parameters .................................................................................................... 45
SWOT & TOWS Analysis of Hydrogen Economy in Germany ................................ 45
Summary ................................................................................................................................ 47
Conclusion ............................................................................................................................ 48
Bibliography/ References: ................................................................................................ 49
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Introduction
Since almost 60 years numerous mathematical models of fuel cells and batteries have
been reported showing powerful capabilities for in silico studies of a large diversity of
mechanisms and processes. But why commercially available products are still not
available or still in the prototype stage?
The following article will introduce a hydrogen energy cycle device that is capable to
produce hydrogen from distilled water and utilize the produced hydrogen to produce
electrical energy on demand.
The device to be investigated as a reference is called Blue Hamster, which is a German
English combination. In the following study, it is called ‘the system’ or ‘the device’. Blue
is the color of hydrogen bottles and Hamster is for the capability harvesting of food
(energy) for the winter.
It was developed by Mossau Company at the beginning of the year 2000 and it was
well ahead of time. Unfortunately, the system was not successfully marketed and due
to the age of the owner and the lack of interest of the successor of the company, the
core development team diverted into other industries. With the lack of vision,
competence and funding the system felt into oblivion.
The complete system was designed for home use and small industrial applications.
However, it was built only as a proof of concept model without back up of market
demands and strategies.
The initial source of energy is not considered in this article. Hydrogen is an energy
carrier that is only useful for long-term energy storage. The production of hydrogen is
quite energy-intensive and by each conversion of hydrogen to energy there is a loss.
As commonly known the public grid system becomes more and more unstable due to
the exponentially increasing numbers of energy producers. Therefore, the alternative
energy production can hardly expand because suitable long-time energy storage
systems are not at the market, yet. Especially in Germany, you can see clearly that the
generation of wind and solar energy comes to its limits. E.g. Windmills are running only
for a few hours a day and the other time the windmills are standing idle. As long as no
additional consumer for abandon energy is introduced the windmills can never run
continuously, which is a total waste of resources and government subsidies.
What needed is a system that can utilize abandon energy in low power demand time
where it is cheap and give the energy back at peak power time or at customers'
demand. If it is widely installed, it is capable of even out the countrywide power demand
and it will make the grid system more reliable with more and more alternative energy
generators. The system should be mass-produced, and it should fit into the budget of
a family or small business unit.
The main intention was to make houses or companies completely independent from
grid use, which means fully autonomous and ideally at affordable costs. But the system
can be more profitable if it is still connected to the grid and can take part in energy
trading.
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The following business model is based on an article “decision tree for hydrogen
devices”(same writer) which defines the technical requirements and suitable sizes and
arrangements which could cover private habitats from 2 up to 18 persons. The study
is based on market research, statistic models and basic calculations related to off the
shelf equipment. Therefore, the presented business model is based on a proven
design which is already in operation.
The main purpose of this study is to demonstrate a profitable business model which
can be verified and is understandable for non-technical persons such as investors and
potential customers. He should be in the position to understand the market situation
and the benefits he can get for his invested money.
The number of charts is necessary for substantiate the business model.
Further studies need to be conducted to develop a project plan to construct this
hydrogen devices at site.
Vision
Inspired by climate change, incredible pollutions on the earth, and the multiple wars
related to hydrocarbon resources, hydrogen devices will offer a pollution-free energy
cycle that can be implemented in all countries around the globe.
Hydrogen based energy cycles are water-based and will be acceptable in all
communities and societies because no harm, pollutants, nor waste will be generated.
It will debottleneck the utilization of renewable energy because it offers long term
storage media for power/energy which is needed for the successful implementation of
renewable energy.
As well it would enable the wide usage of electro and hydrogen mobility because power
is available at the customer location without a redesign of the electrical grid. Therefore
hydrogen-based systems should not be seen as a competitor to electric cars or solar
battery buffered systems. Hydrogen should be seen as a companion to batteries cells
to go beyond the capabilities of battery-powered systems and offers new opportunities
for energy harvesting in parallel to power of the grid.
Locally installed hydrogen system can harvest every abandon energy and store it
indefinitely whenever and wherever it is needed.
The goal, no waste can be applied to energy as well with hydrogen-based systems. In
container size package units, it can be installed widely as close as possible to the
consumer of energy to even out the power demand.
Societies that are utilizing this technology will gain more independence from
conglomerates and foreign coercion.
In this context, we have developed a business plan for the utilization of hydrogen
energy-based systems for households from 2 to 18 people suitable for Europe and in
particular, for Germany.
Methodology
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The overall methodology used to develop the business plan for a hydrogen energy
device is depicted in the following graph below.
FIG.1: Business model methodology
The user requirements utilized for this business plan are based on intensive consumer
studies that are already available for the photovoltaic market. It should be noticed that
the main difference is that long term energy harvesting was not possible because
batteries could not be considered as long-term storage media.
Hydrogen is considered a long-term storage media. The business plan reviews what
will be an optimal mix for short term (batteries) and long-term storage (hydrogen).
Hydrogen and battery energy storage will not be considered as competitors but as
additives to achieve the perfect mix for the customer. Where needed subject matter
experts (SME) will be referenced to consolidate the decisions which will be evaluated
financially further. The energy market is highly regulated and therefore, all relevant
stakeholders have to be considered to enable the customer to use the final product.
Market Analysis
In the market segment of small households up to 18 people (target customers) there
is no commercial product available which has already reached significant market
proliferations. Large conglomerates are developing with government funding
centralized power stations that are not in reach of the target customers at the end of
the consumer scale. This hydrogen energy device will be launched in Germany
therefore many German sources will be investigated to investigate the market
potential.
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The centralized solutions have the disadvantage that they must use the current grid
system, which is already at its limits. It will not support electromobility without heavily
upgrading the electrical grid. Energy harvesting becomes lesser efficient when energy
at low voltages levels must be transported to higher voltage systems and back to the
customer.
A locally distributed system will be beneficial because it harvests the energy where it
is generated and used without interfering with the national grid. Every community can
handle the demand and harvest by themselves. It will provide independence where the
alternative energy is able to expand without the limiting factor if a national grid system
which was designed in the 1960s and never considered alternative energy.
The renewable energy sector has been continuously grown and the trend is still going
up. However, the main limit factors are now the lack of energy storage which is making
the grid more unstable.
FIG. 2: development of renewable energy (water, bio plant, wind, PV and Geothermal
energy)
It should be noticed that hydrogen does not play any role in the renewable energy
sector, yet.
Solar and wind farms are still growing, and a trend for stagnation is not in reach but
with a slower path. It can be expected that the renewable energy industry comes to
stagnation if government support is canceled. The utilization of hydropower remains
constant since the 1990s because the geographical opportunities in a very small
country like Germany are limited and fully utilized.
The energy from biomass is as well stagnant since 2010 when government subsidies
were reduced which let the farmer rethink if such an investment is worth it. Additional
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legislation changes, like restrictions for disposing of the biogas remain on farmland and
increasing cost for disposal, let the biogas producer market shrinking.
Currently, renewable energy has reached 2019 around 40% on average for the
electric power supply.
FIG. 3: renewable energy market share from Jan. 2019 until January 2020
The overall energy production of renewable is less than 16% for the energy demand
of Germany. Therefore, renewable energy potential is slower growing as anticipated to
reach the target of 18% by EU in 2020.(see Fig.4)
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FIG. 4: renewable energy share compared to the German government and EU
guidelines.
The trend is still increasing for renewable energy but the stone-wall is already reaching.
The newly installed renewable power has been reduced significantly in 2019.
(Erneuerbare Energien, Umwelt Bundesamt März 2019, page 8).
Additionally, the government subsidies for wind farms will be canceled in 2020. The
windfarms will be only compensated with 4.4 ct/kWh. Until 2025 approximately 15
Gwatt wind power will fall out of government support and consequently are not
economically worth to run. [29]
A similar situation can be found in solar energy. The highly subsidized solar energy will
be a burden for the owner of the Photovoltaic (PV) system if he will earn only 2 Ct/kWh
and will face the high disposal costs end of life of the solar systems.
Despite the fact that wind and solar energy have been reliable and are able to produce
relatively cheap energy the price for the final consumer is still rising.
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FIG. 5: Current power (kWh) price development average for Germany
In 2020, the current price rose up to 30 ct/kWh for private household, (Rhein Energy,
2020).[31]
The significant gap between the cost for production of renewable energy and the cost
which the consumer has to pay for energy, in conjunction that 1/3 of renewables will
face nonprofit ability until 2025, it will generate a new business opportunity. If the wind
energy can continuously earn money with 4 ct/kWh e.g. to produce hydrogen the
survival of wind farms can be assured. The economic situation for photovoltaic systems
is similar. The compensation after government support will be estimated between 2-3
ct/kWh.
If there is no additional usage found for the already installed renewable energy, a
substantial kickback for the entire industry can be expected. Consequently, the
government cannot fulfill the strategic target for the climate package which should be
reached in 2030. For archiving the climate target the German government is willing to
spend 54 billion Euros until 2030. [30]
The German federal government is already investing in hydrogen systems heavily, as
it can be demonstrated in the following graph. The invested money is primarily for
research and development.
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FIG. 6: Government subsidies for hydrogen devices distributed to technologies
The 54 billion Euro which are additionally available are for climate packages should be
considered tap in source for hydrogen energy systems. However, the reality for
hydrogen looks modest. There are only 60 Hydrogen filling stations registered in 2019
but only 22 in operation (none for public usage). Similar situation we have for hydrogen
powered device which is only one for private use in operation.
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FIG. 7: distribution of hydrogen filling station in Europe
The target plan for 2020 is 100 hydrogen filling stations which are by far to less to start
something significantly.
Hydrogen Energy Recycling plants or devices are even lesser represented. The
systems installed are either prototypes from research institutes or under development.
Considering the following facts:
54 billion euros available from the German government as subsidies for
renewable energy.
Ambitious climate targets without a clear vision of how to reach it.
1/3 of the renewable energy plant will be come not economical in 2025.
Additionally, energy storage with hydrogen brings further development for
renewable energy.
The totally underdeveloped hydrogen energy sector.
Upcoming hydrogen mobility as part of the electric grid limitations.
The national grid in Germany does not support a large fleet of electric cars.
Huge difference between the cost of production of electric current and price for
the final user has room for large profits.
There is a huge market potential for the hydrogen system which should be installed
decentralized where renewable energy is produced to make it economical again.
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There can be two target customers identified which will have a need for this systems.
German Provinces
Gebäudeanlagen
Freiflächenanlagen
Sonstige*
Bayern
8,862
2,659
362
Baden- Würtemberg
4,857
437
224
Nordrhein- Westfalen
4,347
230
61
Niedersachsen
3,144
563
30
Brandenburg
2,233
1,098
48
Hessen
1,623
281
36
Rheinland- Pfalz
1,573
464
52
Mecklenburg-Vorpommern
1,328
273
60
Schleswig- Holstein
1,121
434
16
Thüringen
1,071
217
34
Sachsen- Anhalt
893
1,301
47
Sachsen
866
774
88
Saarland
330
109
10
Berlin
89
2
7
Bremen
41
1
1
Hamburg
38
1
4
Subtotal:
32,416
8,844
1,080
Grand Total Customers
42,340
FIG. 8: installed and subsidized PV solar systems per province in Germany
The subsidized and not subsidized solar plants are in total 1.7 million which can be
identified as potential customers in Germany alone.
FIG. 9: Installed PV solar systems in total installed.
A similar situation we have with windmills. The quantity of customers is less than
photovoltaic but the available energy is in a similar range (42GW solar and 51 GW for
wind) More than 27555 Windmills are installed in Germany with increasing tendency.
Each of the windmill owners could be a potential customer.[FIG. 10]
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FIG. 10:Total installed wind energy power plants (onshore and offshore)
Even though wind energy has the highest potential for further increase offshore. The
utilization is still lesser than it could be. There are 440GW of wind energy installed but
only 86 GW is sold to the grid. It is utilization of 19% because of limited electrical grid
capacity. It becomes obvious if someone drives on the highway in Germany how
inefficient wind energy is used.
In the morning, lunch time and evening most of the windmills are running but in
between the electrical grid does not need the energy and simply switch off the
windmills. If more and more windmills are running out of government funding the
economical basis is jeopardized.
The stagnation in the renewable energy sector can be seen best with bio plants.
FIG. 11: Total installed biomass power plants
The number of bio plants and their installed power has reached the Plato because the
national grid cannot accept more renewable power. The utilization of the biomass is
APR 61% between installed powers and accepted into the grid.
We can conclude that all three renewable energy forms have idle/abandon energy
capacity available which is either not accepted by the grid or the compensation is too
less, then it is not economically feasible to continue production.
The main bottleneck expanding renewable energy is the discrepancy between power
demand and power supply. This gap can only be bridged if there is sufficient storage
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capacity available to harness the renewable energy when it is available and use it when
there is a demand.
Based on the payment discrepancy of 4Ct/kWh for production and 30 ct/kWh for the
customer in addition to the limitations of the national grid, decentralized technical
solutions should be preferred. (As close as possible to the customer)
The market potential can be estimated from the following graphic:
FIG. 12: power demand in Germany for 2017 and 2018 in Tera Watt per sector
Based on this graphic private homes and small business are equal to have of the
energy consumption in Germany. Consequently, a decentralized system with hydrogen
should be introduced, which focus on this target group.
Private homes according all provinces in Germany in thousand
2018
Nordrhein-Westfalen
8,756
Bayern
6,453
Baden-Württemberg
5,286
Niedersachsen
3,973
Hessen
3,091
Sachsen
2,156
Berlin
2,028
Rheinland-Pfalz
1,961
Schleswig-Holstein
1,470
Brandenburg
1,257
Sachsen-Anhalt
1,151
Thüringen
1,104
Hamburg
1,003
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Mecklenburg-Vorpommern
830
Saarland
493
Bremen
366
Total
41,378
FIG. 13: Number of private homes distributed for each German province
The average size of households in Europe can be seen here:
FIG. 14: Number of inhabitants per household in Europe
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Combined with the type of dwellings in Germany, the size of the hydrogen system can
be determent.
FIG. 15: dwelling/accommodation type distribution
Considering that 43.7 percent are living in a private house with an average size of 2
(2.3 for Europe) plus 7.5% in Villas plus 2.4% attached house plus 1.1% farmhouses
where can cover 54.7% of the habitats in Germany. This group would be suitable for
the hydrogen system and should be the prime focus group for the F2F business.
The remaining part of the population is living in apartments or building blocks with an
average 2 inhabitants which are mainly habitats in cities where space and legal
constraints would make it difficult to install a hydrogen system.
If the hydrogen device would be designed for houses with 2 people and building blocks
with 8 units up to 16 people, it can be assumed that most of the potential customers
can be reached.
Hydrogen Energy Technologies
Hydrogen has been discovered in 1671 by Robert Boyle. It is widely in use in all kinds
of chemical processes. The hydrogen generation market is expected to be valued at
US$115.25 billion in 2017[25]. It is a still-growing market and has not reached its
maximum potential. For instance, hydrogen driven cars are not in the market and
hydrogen as energy storage media is mainly used in military applications such as
submarines and drones. Commonly known hydrogen is produced by electrolysis cells.
However, Hydrogen can be generated in various ways.
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FIG. 16: Hydrogen production ways
For the renewable energy sector only the solar and wind energy provides enough
energy for the hydrogen production. Politically it is the most acceptable process of
making hydrogen, even if others might be cheaper and more economical.
Therefore, the model can be reduced to:
FIG. 16:Preferred production way for renewable energy
Fuel Cells
There are in principle 5 types of fuel cells available, which are fully developed and
tested.
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FIG. 18:Technologies of fuel cells
Hence a fuel cell is used in human habitats and crowded environment, the ideal fuel
cell is a polymer electrolyte fuel cell because of the low operating temperature and less
toxic content inside. The operating temperature range of 60-80°C fits perfectly into
heating systems and will not require any mixing of another temperature reduction
device.
The Polymer electrolyte fuel cells are already in wide usage for telecom towers as back
up based on simplicity and quiet operation. They can seamlessly integrate into the DC
power supply system feeding the batteries. In case of a power loss, a forced closed
valve will open and will release hydrogen into the fuel cell. It produces almost instantly
DC power. (no warm up like with diesel generators)
The fuel cell produces its own power supply for the ventilators. They blow from the
back-side air into the fuel cell. Combined with the hydrogen the air reacts inside the
electrolyte and produces a voltage of 48 to 65 V DC which is ideal to charge the backup
batteries of a telecom tower. (Black and read cable in FIG. 20)
Comparison to an emergency diesel these fuel cells are much more reliable and
require much less maintenance. They are easy to operate, based on their own control
system. One button to start or one potential free contact are sufficient to start the fuel
cell to produce energy.
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FIG. 19: Electrolyte fuel cell principle and real assembly
These kinds of fuel cells are commercially available and have a reasonable price as
off the shelf product. They are available in sizes from 1kw up to 50kw which is ideal for
our application.
Electrolyzer
As early as 1800, two Englishmen named William Nicholson and Anthony Carlisle
discovered electrolysis, a process for splitting water into hydrogen and oxygen. Direct
current was used. The two men thus founded a new field of chemistry,
electrochemistry. [26]
First, it was developed the standard Alkaline Electrolysis based on the principle to put
2 electrodes with an opposite charge into the water.
The chemical reaction which occurs can be described as:
2H2O==2 H2+O2
The structure of the electrolyser is extremely simple. It consists of two poles which
should not be interchanged because on one side hydrogen will be generated (cathode)
and oxygen will be generated on the anode.
Cathodic reaction: 4H2O+4e == 2H2+4OH-
Anodic reaction: 4OH- == O2+2H2O+4e
To enhance the conductivity an alkaline solution will be added to the water, preferably
a solution 30% KOH (Potassium hydroxide). The high alkaline content is protecting the
anodes and cathodes from early corrosion and failure.
As higher is the conductivity and higher is current, the higher is the hydrogen
production. The limit is given at the current density per area. Therefore should an
electrolyser only be topped up with demineralized water to compensate for the
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separation of water molecules into hydrogen and oxygen. If normal water would
replenish the liquid losses, the electrolyte would accumulate too much salt and the
hydrogen production will go down. (Some other negative effects would happen, too)
PEM takes its name from the proton exchange membrane. PEM’s special property is
that it is permeable to protons but not to gases such as hydrogen or oxygen. As a
result, in an electrolytic process, the membrane takes on, among other things, the
function of a separator that prevents the product gases from mixing.
On the front and back of the membrane are electrodes that are connected to the
positive and negative poles of the voltage source. This is where water molecules are
split. In contrast to traditional alkaline electrolysis, the highly dynamic PEM technology
is ideally suited to harvest volatile energy generated from wind and solar power. PEM
electrolysis also has the following characteristics:
High efficiency at a high power density
High product gas quality, even at partial load
Low maintenance and reliable operation
No chemicals”[26] or impurities can be tolerated for a long life of the Electrolysis.
FIG. 20: 3-5KW Electrolysis stack (top view)
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FIG. 21: Hydrogen production based on abandoned renewable energy
The electrolyzer has instantly consumed energy and convert to hydrogen. This would
be ideal for wind-mills which would be idle and can not set the power to the grid.
Therefore it would be ideal if all electrolyzer in-country would be managed by cloud
computing application and smartly switched on and off whenever it is cheap or
abandon energy available.
Hydrogen Tank
The produced hydrogen needs to be stored at the customer site and appropriate tanks.
The following chart will give an overview of the required size. It is easy to identify that
the volume is much largen then with diesel tanks because the density of hydrogen is
even under pressure much lower.
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FIG. 22: Hydrogen tank size per household/person/year
FIG. 23: Size comparison for stored volume of natural gas, hydrogen, compressed air
and potential energy of water
Storage capacity to store 1 TWh
5.5 million cubic meter water utilized in a pump storage power plant 83m
height difference
0.5 million cubic meter at 50 bar compressed air storage
Hydrogentank
30bar
300bar
700bar
Persons
qm
qm
qm
kWh/Nm
2
30
3
1
2.700
4
40
4
2
3.600
5
60
6
3
5.400
6
80
8
4
7.200
8
80
10
5
7.200
9
100
11
5
9.000
11
120
12
7
10.800
12
140
14
7
12.600
18
160
16
10
14.400
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0.017 million cubic meter hydrogen 50 bar
0.006 million cubic meter natural gas at 50 bar
The storage of hydrogen requires a similar size as natural gas. Based on the low
density of hydrogen the storage is just a little bit more. The storage if hydrogen is
generating some fear in people when they think on the zeppelin which exploded on
long island (New York May 1937) However, it has one of the lowest safety hazards
comparing other flammable gases and liquids.
Safety aspects
Hydrogen is:
º does not detonate in the open air
º Hydrogen is lighter than air and vanishes rapidly upwards.
º does not decompose
º does not self-ignite
º Hydrogen has a high diffusion coefficient (four times that
of methane) and dilutes rapidly in air.
º non-oxidizing
º non-toxic
º non-corrosive
º Hydrogen has significantly narrower detonation limits in the
air than explosion limits when ignited early, it burns before
detonation limits are reached.
º non-radioactive
º does not have an unpleasant smell
º Hydrogen burns with an invisible flame with very little heat
radiated from the flame.
º non-contagious
º Hydrogen is colorless and odorless.
º not harmful to water
º not harmful to the fetus (non-teratogenic)
º does not cause cancer (non-carcinogenic)
http://www.h2data.de/
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Power Inverter
A power inverter, or inverter, is a power electronic device or circuitry that changes
direct current (DC) to alternating current (AC). [27]
For the Grid and for the supply of the dwellings, households, and apartments the
common power supply is alternative current (AC). However, the storage of energy in
Batteries is in direct current (DC). The Power inverter is the coupling device that is
capable to connect Grid, Batteries, PV systems, hydrogen fuel cell and power supply
together. Due to PV, UPS and camping industries the power inverters are a mass
product that is available in any size and configuration.
Therefore, it is ideal to go for inverters that are already available on the market. Not
further development will be needed for Hydrogen devices.
FIG. 25: 6kW Power inverter with operation Panel and 48V DC
Current commercial products are very compact due to mass production and very
reliable.
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Battery Pack
For short term power supply and for the feed of the power inverter a battery pack is
required. The hydrogen fuel cell is not capable to directly supply the power inverter.
Alternatively, a capacitor bank would be possible but the backup time with capacitors
is very short (seconds).
Commercially viable options for batteries are:
Lead-acid batteries
Nickel-cadmium batteries (NiMh and NiCd)
Lithium (Li-SOCl2 or LiMnO2) Batteries
FIG. 26: Batterie pack 48V DC from Truck batteries (self-made)
For this article, we only consider two types of batteries.
Lead-acid batteries, they are relatively cheap, mass-produced but
relatively short lifetime (3-4 years) the storage time is limited to several
month and subject of constant discharge. Technically they are an
obsolete technology that has only their justification where the price is a
concern and space is not a concern.
Lithium batteries are the latest technology. The main advantage is that
they are holding the charge significantly longer than lead batteries and
they are more compact.
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December 2019 Business plans for hydrogen energy devices Page 27
FIG. 27: Types of batteries depending on charge efficiency and loading cycles
It is important that the number of loading cycles of lead-acid and lithium batteries is
significantly different. Hence for lithium batteries, the cycle durability and the charge
efficiency are much higher plus other technical benefits. Therefore, lithium batteries
are better for this application and will be considered in the financial evaluation.
Energy Landscape in Germany
There are 5 predominant electrical power providers in Germany which have an almost
stable distribution of the market share. Only if one company is fading out of this market
and for strategic purposes, the rate is always the same over the years.
FIG. 28: power providers in Germany
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December 2019 Business plans for hydrogen energy devices Page 28
These companies are providing 74% of the energy to the grid and are entitled to have
the contracts to the final customer. Every user of the grid has to pay a royalty to these
companies as well as taxes to the government.
In the middle, we have the “Bundesnetzagenture” which is a half government agency
for controlling fair utilization of the power grid and sharing with renewable energy.
The distribution of power over the grid is not lucrative because the compensation
feeding the grid is the lowest. Consequently, the renewables cannot compete
commercially with the conglomerates. Additionally, the 5 main power providers are
controlling the acceptance of renewable energy and can switch them off whenever they
require to do so. The renewables or others have reached a stone wall where no further
expansion is feasible if the stability of the grid is not compromised.
Therefore, the entire idea to let everyone who can produce energy can feed the grid
and renewables will replace the existing conglomerates is an illusion. If renewables
wanted to expand there must be found a power distribution way in parallel to these
conglomerates directly from the producer to customer bypassing the grid. Hydrogen
would be the perfect energy storage media.
Approval Authorities
For the utilisation of flammable gases (such as hydrogen), there are very strict rules all
over the world. In Germany, there are normative technical rules which are documented
in the AD2000 and the DGRL (Druckgeräterichtlinie) as main technical standards.
Every manufacturer has to produce the technical installations following these rules.
Each technical installation must be approved by a local authority of a government
subsidiary responsible for this location. Of course, the technical capabilities of these
subsidiaries are limited and therefore they are outsourcing the technical knowledge to
legally sworn subject matter experts (consultants) for their judgments. Once the
consultant provides a non-objection to the installation, the local authorities will give
temporary approval for construction. Once the installation is built, the TUV
(Technischer Überwachungs Verein) will be requested to give the highest technical
approval to assure that all standards are followed and the plant is safe. With the TUV
approval, the operating companies or individuals can apply for permanent operating
approval by the local authorities.
The entire approval process is quite costly and time-consuming. For our application,
we can easily assume 30-50000 Euros for the fees of the approval process.
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December 2019 Business plans for hydrogen energy devices Page 29
Companies Operating in Germany
FIG. 29: Market share of power distributing companies
It is clear that against these conglomerates renewable energy has no chance to
expand further or gain a bigger market share without government intervention.
However, the market ratio would be untouched of the energy could be transferred in
hydrogen bottles to the customer. The only reduction would be seen from foreign
energy imports which would make a country less vulnerable against foreign interests.
It would be a win-win situation for the hydrogen energy sector if the power grid
conglomerates could as well utilize the hydrogen devices storage capacities to
stabilize their grids.
Energy Calculations
FIG. 30: government subsidies for wind energy
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December 2019 Business plans for hydrogen energy devices Page 30
For wind-mills is been paid 5.5ct/kWh and for Solar 27.4 ct/kWh [Bundesnetzagentur
monitoring report page 100].
After the EEG subsidy period the power generators have to participate a pay as bid
auction.
FIG. 31: free-market price for wind energy without government subsidies
If we assume that the consumer price is 29.5 ct/kWh compared to the 4-5 ct/kWh, it is
clear that the hydrogen energy device needs to be installed at the closest possible
point to the final customer. In the case of a house owner, it has to be installed after the
metering that no middle party is involved.
If the hydrogen device cannot be installed at the final customer of energy. The system
has to be split into two parts, hydrogen generation at the location where it is most
economical and the usage at the site of the final user of energy.
In the case of wind and solar farms, the hydrogen should be generated at the site and
filled into bottles which will be delivered to the final customers. It should be clear that
hydrogen is an energy carrier that will be carried to the customer for usages such as
converting into electricity and heat. Literally, it is fair to say that hydrogen is an energy
carrier that can be transported and stored easily.
With this profound concept, we have a price base which is 4 ct/kWh energy cost for
generating the hydrogen and 29.5 ct/kWh which the cost the customer is used to pay
for energy.
An additional benefit for the customer is that the conversion of hydrogen into electricity
is generating heat which can be used for water and floor heating.
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December 2019 Business plans for hydrogen energy devices Page 31
As a price base for this heat, we will consider the cost of 1kWh generated by propane
gas which is 10 ct/kWh. (https://www.tyczka.de/ Dec. 2020)
Energy Input at Renewable Site
For renewable energy, we have identified two sources Wind energy and Photovoltaic.
Wind energy is normally installed at great distances to housing areas. Therefore,
hydrogen production and storage in a bottle would be possible. The bottles or bottle
batteries should be brought to the end-user by trucks.
Photovoltaic is installed in remote areas as well as on top of houses. If it is installed on
houses, the owner can decide to install the hydrogen system and make him fully
independent. Solar farms remotely from end customers can produce hydrogen and fill
it bottles too.
We have now 3 scenarios which we can investigate as a business model
1. Windmills producing hydrogen, store it in bottles and deliver to the
customer
2. Solar farms producing hydrogen, store it in bottles and deliver to the
customer
3. Photovoltaic which is installed at the end customer
Economic Modelling
The business plan should demonstrate the profitability of hydrogen energy cycles
under the current circumstances and/or identify where public funding is required. It
should be considered a scenario where the total demand for energy is produced by
renewable energy and consumed at customer site.
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A national supply chain should supply the hydrogen in bottle batteries and deliver it to
the customer at home. It is a front end to end direct business model without a
middleman such as a national power grid.
FIG. 32: Power demand per person per country (average)
Key Assumptions
For the business model, we will calculate an 18 person habitat to have a reasonable
CAPEX. If the 18 person model is profitable, we can assume smaller units are
profitable as well because it is almost linear scaling.
As a baseline for the cost calculation, we assume that the renewable energy produces
will use their spare capacity to produce hydrogen and infinity renewable energy
producers can be added because the production of energy does not have to follow the
requirements of the national grid. It means everyone can produce energy at any time
and would be compensated equal to the money he would earn if he would feed the
grid. Over 27,000 Windmills in Germany which are running only at 19% of their max.
JFP Dec. 2019
December 2019 Business plans for hydrogen energy devices Page 33
Potential would have the opportunity to run continuously. For the basis of the
calculation, we consider 4ct/kWh for energy production.
The end customer will pay the price of electricity which he has produced domestically
by converting hydrogen to electric power. For the basis of the calculation, we will
consider 29,5ct/kWh which is the national price for electric energy for private
customers. 10 ct/ kWh will be considered for the associated heat which is resulting in
the inefficiency of the conversion. The value is equal to LPG gas delivered to private
homes.
Cost Structure
The current cost of equipment are based on 2019 market price.
FIG. 33: cost structure of a hydrogen device depending on the persons
The following chart gives a clear picture of how the cost is distributed.
FIG. 34: Cost distribution related to component
Persons Inverter Fuel Cell Elektrolyser Batterie
Watertank
HydrogenT Net Cost
Custom
Price
210,000.00 € 10,000.00 € 12,000.00 € 2,258.00 € 500.00 € 30,000.00 € 64,758.00 € 84,000.00 €
410,000.00 € 10,000.00 € 24,000.00 € 3,438.00 € 500.00 € 40,000.00 € 87,938.00 € 114,000.00 €
512,000.00 € 12,000.00 € 24,000.00 € 4,276.00 € 650.00 € 60,000.00 € 112,926.00 € 146,000.00 €
612,000.00 € 12,000.00 € 24,000.00 € 5,157.00 € 650.00 € 80,000.00 € 133,807.00 € 173,000.00 €
822,000.00 € 22,000.00 € 36,000.00 € 7,054.00 € 650.00 € 80,000.00 € 167,704.00 € 218,000.00 €
922,000.00 € 22,000.00 € 36,000.00 € 8,595.00 € 650.00 € 100,000.00 € 189,245.00 246,000.00 €
11 22,000.00 € 22,000.00 € 48,000.00 € 8,552.00 € 650.00 € 120,000.00 € 221,202.00 287,000.00 €
12 22,000.00 € 22,000.00 € 48,000.00 € 10,314.00 € 650.00 € 140,000.00 € 242,964.00 € 315,000.00 €
18 22,000.00 € 22,000.00 € 48,000.00 € 14,108.00 € 650.00 € 160,000.00 € 266,758.00 € 346,000.00 €
Inverter, 15%
Fuel Cell, 15%
Elektrolyser, 19%
Batterie, 3%
Watertank, 1%
HydrogenTank, 46%
COST DISTRUBUTION
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December 2019 Business plans for hydrogen energy devices Page 34
The hydrogen tank contributes almost to half of the cost of a hydrogen energy device.
The tank cost is directly proportional to the size of the hydrogen tank. The dimension
of the tank must be sized for a buffering time of a 6-month period. A normal steel tank
is the most cost-effective storage. More sophisticated tanks made form polymers and
carbon fiber are not cheaper.
Therefore, a significant breakthrough can only be expected in Fuel Cells and
Electrolyser. Batteries and Inverters are already in mass production and further cost
reduction cannot be expected, too. If we assume cost reduction is electrolyzer and fuel
cell of 30% then it will contribute to the overall cost only by Apr. 10%.
CAPEX
The total investment costs should be considered.
Persons
Ex-Works
Commissioning
Approvals
Capex
2
84,000 €
16,800 €
10,000 €
110,800 €
4
114,000 €
22,800 €
10,000 €
146,800 €
5
146,000 €
29,200 €
10,000 €
185,200 €
6
173,000 €
34,600 €
10,000 €
217,600 €
8
218,000 €
43,600 €
10,000 €
271,600 €
9
246,000 €
49,200 €
10,000 €
305,200 €
11
287,000 €
57,400 €
10,000 €
354,400 €
12
315,000 €
63,000 €
10,000 €
388,000 €
18
346,000 €
69,200 €
10,000 €
425,200 €
FIG. 35: Capex of hydrogen device devices working at the customer site.
The approval cost per site is estimated to be identical because the size of a site does
normally not matter for the authorities. As authorities, we understand approving bodies
like TUV. However, the cost can vary from province to province because in Germany
we have a federal system where every province has different requirements.
For the commission (&Construction) cost, it was estimated around 20% of the Ex-works
cost. It includes:
The transportation of the equipment,
Construction of the tank foundation,
Placing of the tank with a portable crane,
All pipe works from hydrogen tank to electrolyser and fuel cell,
Electrical installation
Loop checking
Model: Total independence
Content
Unit
Facts
Remarks
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December 2019 Business plans for hydrogen energy devices Page 35
Investment
CAPEX
Euro
346,000.00
Depreciation period
Years
20.00
Capital cost per year
Euro
17,300.00
capital per year
Interest rate
%
2.00
interest rate
Total interest per year
Euro
6,920.00
Invest times interest
Total capital cost per year
Euro
24,220.00
capital & interest
Hydrogen production cost
windmills, PV plants and biogas-plants
Power demand per year
kWh/a
232,615.38
Power compensation for renewables
Euro
0.04
Production cost for hydrogen energy
Euro
9,304.62
Maintenance cost per year
Euro
500.00
Spare parts over 20 year
%
0.01
Spare part cost per year
Euro
173.00
Maintenance man-hours
Hours
0.01
Man-hour rate
Euro
75.00
Cost for surveillance
Euro
150.00
Total operational cost
Euro
10,127.62
CAPEX & OPEX per year
Euro
34,347.62
Based line facts
Persons
Quantity
18
Power demand per person per year
kW/a
6300
Power demand per year
kWh/a
113,400.00
Hydrogen energy content per QM
kWh
3,000.00
Hydrogen energy content per11 MJ per kg
MJoule
33,000.00
Volume per bottle
Liter
3,860.00
Pressure
bar
300.00
Standard volume hydrogen 12 bottles
QM
1,158,000.00
Hydrogen bundles required
unit
-
Efficiency electrolysis
%
75%
Efficiency fuel cell power
%
65%
Heat from fuel cell
%
35%
Overall efficiency process el. Power
%
49%
Benefit
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December 2019 Business plans for hydrogen energy devices Page 36
Current power demand
kWh
113,400.000
Heat power demand
kWh
61,061.54
Price per kWh Current
ct/kWh
29.50
Price per kWh Heat
ct/kWh
10.00
Benefit current over 20 years
Euro
33,453.00
Benefit heat over 20 years
Euro
6,106.15
Revenue per year
Euro
39,559.15
Energy cost per person per month
Euro
183.14
Benefit per Year
Euro
39,559.15
34,347.62
Monthly cost for green energy without
profit
Euro
159.02
Surplus per year compared to
EURO
5,211.54
Investment gain
%
1.51
FIG. 36: Capex for total independence from the grid (PV cells not included)
Model: consumer model
Content
Unit
Facts
Remarks
Investment
CAPEX
Euro
158,000.00
Depreciation period
Years
20.00
Capital cost per year
Euro
7,900.00
capital per year
Interest rate
%
2.00
interest rate
Total interest per year
Euro
3,160.00
Invest * interest rate
Total capital cost per year
Euro
11,060.00
capital & interest
Hydrogen production cost
windmills, PV plants and biogas-plants
Power demand per year
kWh/a
232,615.38
Power compensation for renewables
Euro
0.04
Production cost for hydrogen energy
Euro
9,304.62
Maintenance cost per year
Euro
500.00
Spare parts over 20 year
%
0.01
Spare part cost per year
Euro
79.00
Hydrogen batterie supply per year
Unit
2.00
Hydrogen batterie rental cost /d
Euro
0.17
Hydrogen batterie cost per unit
Euro
450.00
External Hydrogen delivery
Euro
927.20
Maintenance man hours
hours
0.01
Man-hour rate
Euro
75.00
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December 2019 Business plans for hydrogen energy devices Page 37
Cost for surveillance
Euro
150.00
Total operational cost
Euro
10,960.82
CAPEX & OPEX per year
Euro
22,020.82
Based line facts
Persons
quantity
18.00
Power demand per person per year
kwh/a
6,300.00
Power demand per year
kwh/a
113,400.00
Hydrogen energy content per QM
kwh
3,000.00
Hydrogen energy content per11 MJ per
KG
Mjoule
33,000.00
Volume per bottle
Liter
50.00
Pressure
bar
300.00
Standard volumen hydrogen 12 bottles
QM
180.00
Hydrogen bundles required
unit
2.00
Efficiency electrolysis
%
75%
Efficiency fuel cell power
%
65%
Heat from fuel cell
%
35%
Overall efficiency process el.power
%
49%
Benefit
Current power demand
kWh
113,400.000
Heat power demand
kWh
61,061.54
Price per kWh Current
ct/kWh
29.50
Price per Kwh Heat
ct/kWh
10.00
Benefit current over 20 years
Euro
33,453.00
Benefit heat over 20 years
Euro
6,106.15
Number of external bundles
unit
40.00
Revenue per year
Euro
39,559.15
Energy cost per person per month
Euro
183.14
Benefit per Year
Euro
39,559.15
22,020.82
Monthly cost for green energy without
profit
Euro
101.95
Surplus per year compared to
EURO
17,538.34
Investment gain
%
11.10
FIG. 37: Business model for consuming hydrogen only
Model rented tank:
JFP Dec. 2019
December 2019 Business plans for hydrogen energy devices Page 38
Content
unit
facts
remarks
Investment
CAPEX
Euro
200,000.00
Depreciation period
years
20.00
Capital cost per year
Euro
10,000.00
capital per year
Interest rate
%
2.00
interest rate
Total interest per year
Euro
4,000.00
Invest * interest rate
Total capital cost per year
Euro
14,000.00
capital & interest
Hydrogen production cost
windmills, PV plants and biogas-plants
Power demand per year
kwh/a
232,615.38
Power compensation for renewables
Euro
0.04
Production cost for hydrogen energy
Euro
9,304.62
Maintenance cost per year
Euro
500.00
Spare parts over 20 year
%
0.01
Spare part cost per year
Euro
100.00
Hydrogen batterie supply per year
unit
2.00
Hydrogen batterie rental cost /d
Euro
0.17
Hydrogen batterie cost per unit
Euro
450.00
External Hydrogen delivery
Euro
927.20
Maintenance man hours
Hours
0.01
Man-hour rate
Euro
75.00
Cost for surveillance
Euro
150.00
Total operational cost
Euro
10,981.82
CAPEX & OPEX per year
Euro
24,981.82
Based line facts
Persons
quantity
18.00
Power demand per person per year
kWh/a
6,300.00
Power demand per year
kWh/a
113,400.00
Hydrogen energy content per QM
kWh
3,000.00
Hydrogen energy content per11 MJ per
KG
Mjoule
33,000.00
Volume per bottle
L
50.00
Pressure
bar
300.00
Standard volume hydrogen 12 bottles
Qm
150.00
Hydrogen bundles required
unit
2.00
JFP Dec. 2019
December 2019 Business plans for hydrogen energy devices Page 39
Efficiency electrolysis
%
0.75
Efficiency fuel cell power
%
0.65
Heat from fuel cell
%
0.35
Overall efficiency process el.power
%
0.49
Benefit
Current power demand
kWh
113,400.00
Heat power demand
kWh
61,061.54
Price per kWh Current
ct/kWh
29.50
Price per kWh Heat
ct/kWh
10.00
Benefit current over 20 years
Euro
33,453.00
Benefit heat over 20 years
Euro
6,106.15
Number of external bundles
2.00
Revenue per year
Euro
39,559.15
Energy cost per person per month
Euro
183.14
Benefit per Year
Euro
39,559.15
24,981.82
Monthly cost for green energy without
profit
Euro
115.66
Surplus per year compared to
EURO
14,577.34
Investment gain
%
7.29
FIG. 38: Business model for tank on rental basis
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December 2019 Business plans for hydrogen energy devices Page 40
OPEX
Generally, hydrogen devices can be considered as static equipment. They hardly need
any maintenance. With a lifetime of min. 20 years (equal to a heating system for
domestic use) the only maintenance activity is to replenish the water reservoir and
continuous observation of the equipment or safety reasons.
It is advisable to conduct the observations from an expert who understands the
technology. Therefore, the devices should be monitored remotely 7/24h equal to public
elevators. The manufacturer should have only access to data and performance
measurements to interfere before something might happen. Hydrogen as a gas is not
as hazardous as hydrocarbons but it is still flammable. If one has experienced the
ignition of half a litre of hydrogen, he would understand the hazard potential of
hydrogen leaking out in his house.
Parallel to remote vendor monitoring, it is required regular pressure tests and approval
from technical authorities such as TUV to maintain the operation licenses.
Depending on size and pressure different monitoring and approval cycles are to be
considered. More information can be found in the AD2000 Merkblatt and Druckgeräte
Richtline (generally accepted regulations for pressure vessels) which is part of the
national standard in Germany which each operating company has to follow.
Cost of Electricity
Currently, the cost of electricity is <30ct/kWh. Compared to other countries the price
per kWh in Germany is one of the highest in the world. For an industrialized country
like Germany which depends on cheap energy to maintain its production base against
other international players, it is a big challenge. The population is paying the price with
the perception to support renewable energy.
However, when we see the big difference between 4 ct/kWh for feeding the grid and
the huge government subsidies for renewable energy, it is clear the profit is going to
other pockets than into the renewables. The business model is based on 29.5 ct/kwh.
If we imagine that renewable does not have a limiting factor in expanding with
producing hydrogen, then they would become a competing factor with existing power
plants.
The price of electricity can be stabilized as well because we would have sources of
energy available at the same time. One would be over the standard grid and the other
source would be by buying and selling hydrogen in bottles directly at the house owners’
home. He would be able to decide where he will take power. If competing supplies will
be available, the market does not need any nation deregulations and controls by the
government. Only monopolies need protection, such as the current energy market.
The free market will control the price of electricity automatically without any
interference from the government. Surely this kind of freedom would not be easy to
come into play without national consent.
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December 2019 Business plans for hydrogen energy devices Page 41
Revenue Streams
For easy understanding, the cost and revenue streams are simplified to identify the
market potential. We take into consideration a windmill with 1 Megawatt and a
hydrogen battery and a PV installation.
FIG. 39: possible revenue streams (tax not considered)
The money values are tentative and can vary from location to location. E.g., if a bundle
of hydrogen will be ordered for private use, the cost is significantly higher (2.5 times)
than an industrial company can at the moment.
We can consider two revenue streams.
1. Delivery Hydrogen to the market for the chemical industry and
electromobility. This model has the highest profit but most top market
fluctuation. (short term business)
2. B2B to fixed customers. Lesser Profit but long-term contracts ensures
long term price stability.
From these two revenue streams, we can see how profitable the business could be.
The short-term market will determine the higher end of the profit and the long-term
business is to determine the lower end of the market. In the lower end, the revenue
cannot be lesser because it is oriented at the current cost of electricity. Historically, it
is increasing every year and will not go down.
Therefore, we can assume that this the basis for calculating the investment.
The add-ons for a windmill would come without any substitute from the government.
The homeowner needs a replacement; otherwise, he cannot bear the cost until the
marked is established and price for fuel cells is competitive.
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December 2019 Business plans for hydrogen energy devices Page 42
The sales of hydrogen have another advantage. For all the power producers, there is
an additional tax for utilization of the grid and royalty to the dominant power companies.
If there is a parallel industry with hydrogen, all these additional fees and royalties can
be saved which becomes an additional advantage for hydrogen.
This fees and royalties can be safe if the grid is not used but the hydrogen bottles as
energy media is transported directly to costumer.
Oldenburg 2018 power distribution
Prices in ct/kWh
Power tax
2.050
Fee for grid utilisation
4.830
EEG fee
6.792
AbLAV fee
0.011
KWKG royalty
0.345
CurrentNEV royalty
0.370
Offshore royalty
0.037
Production concession fee
1.990
Sum of net fees and royalties
16.425
On top of the cost will be charged VAT. (production cost+ fess+ royalties
+VAT = Gross price. (about 30 ct/kWh for the final customer)
Selling to the grid
Renewable energy is already regulated and limited to the requirements of national grid
providers. You are feeding into the power grid does not make more commercial sense
for the producer perspective.
This is only an option for the end customer because he has in his hydrogen tank energy
on demand available at any time. We have considered a buffer time for at least 6-
month total independence.
However, it does not make any sense to sell it at a lower price than he has to pay from
the grid for himself, which is 29,5ct/kWh.
Therefore, the baseline for feeding into the grid because reasonable when the
compensation will be equal. This would be the case if the national grid needs support
and cannot maintain stability.
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December 2019 Business plans for hydrogen energy devices Page 43
FIG. 40: power cuts within Europe per country
In Germany, this scenario is not at interest because the grid is quite stable. Renewable
energy is limited at a level the power grid can swallow the supply without destabilizing
it, while the backbone of the energy supply is still on the conventional power supply.
If renewable energy would be increased, the grid would become instable. But it could
be stabilized with the energy storage capacity at the user site. The user or customer
becomes a producer of energy because he is making his harvested energy available.
If there would be a contractual model build that it is fair for both sides, the path of
renewables will be unrestricted.
However, in other countries where the supply is not enough this option would be
exciting for countries like Pakistan, India or even Australia. These countries are
struggling with continuous power supply for various reasons. Many homeowners in
these countries have their private diesel generator at home to bridge the time when
there is no power available. If they would use their energy storage and would feed the
grid the shortage would not occur at the beginning. However, this would imply a fair
compensation of both sides to make it feasible.
Model Operation
For the final user, homeowner or community up to 18 people following scenarios would
be possible:
Operation model
Conditions
Cost
Total independence
All facilities at his own availability
no connection to the grid User can
Highest invest
159 € per person per month
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December 2019 Business plans for hydrogen energy devices Page 44
harvest his domestic energy for 6
month
Hydrogen only converted
electricity and heat
Hydrogen becomes the prime
energy source. No electrolysis, no
tank. Equal to a conventional
heating system with hydrogen as a
power source
Lowest invest
102 € per person per month
Hydrogen for power and
heating no long term storage
Rented Tank, short term storage
and shorted substituted by
hydrogen delivery
Medium investment
116 € per person per month
Hydrogen for power and
heating plus feeding the grid
Grid allows to feed at peak
demand and compensate with
standard market price
No additional cost to total
independence model but faster
ROI, depending on the
capability the cost is between
159 to 102 person/m
The last model would be the best for all stakeholders and a country. However, it will
need national consent and government support to make is feasible. If hydrogen will be
considered with its full potential this merges a country together to solve the energy
problem and mobility issues.
The energy cost for 102 until 159 is higher than in most cities with hydrocarbon
heating but they are close to current market prices with conventional energy supplies.
If we extrapolate for the future taking into consideration on the price cut seen in the PV
market, we can expect that a hydrogen energy cycle can become more attractive than
conventional energy supply.
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December 2019 Business plans for hydrogen energy devices Page 45
Options and Parameters
A hydrogen energy cycle not only offers a new industry around it, but also it changes
the whole perspective of the energy market. The owner of this facility becomes
producer of energy and hydrogen will become a tradable good which is highly paid in
industrial countries.
The market price for one buddle of 12 bottles of hydrogen at 300 bar:
492.00 151qm hydrogen +
12.95 traffic toll +
0.95 ordering charge +
48.00 transport
Total: 553 free home delivery
(Linde offer, 355359418 from 31.1.2020)
Additionally, must be paid 1.6€ rental cost per day for the 12 bottles.
The compensation for a windmill for the same amount of energy/electricity feeding into
the grid is equal to 41€. (With 4 ct. /kWh) Even if the price of hydrogen is going down
to half of the price because of mass production there is still a huge potential for earning
money.
For the renewable sector, this price difference becomes a new perspective of earning
money and game-changer in the business model of renewable energy.
SWOT & TOWS Analysis of Hydrogen Economy in Germany
A more quantitative analysis of business model comparing to business tree decisions
can be done with SWOT, (strength, weakness, opportunities and threats). SWOT
analytical method is widely used for strategy formulation by constituting an important
basis for learning about the situation of the studied object and for designing future
strategies to solve the existing problems (Chang and Huang, 2006; Lee and Lin, 2008;
Nikolaou and Evangelinos, 2010).
Positive success factors
Negative success factors
Internal
factors
Strength
Domestic technology
Working prototype
Abundant resources
Great development potential
Weakness
High cost
Lack of funding and subsidies
Lack of infrastructure/ references
Human resources (to produce and
install)
External
factors
Opportunities
High acceptability of clean energy
Government support
Lack of competition and new
market development
Cooperation with PV and wind
energy
Threats
Unconfirmed market potential
Legal requirements
Tougher competition in the future
Competition with other renewable
energy sources
As a result of the SWOT analysis, we have found the following reasonable
combinations in the TOWS matrix.
JFP Dec. 2019
December 2019 Business plans for hydrogen energy devices Page 46
Threats
T1
X
T2
X
T3
X
X
T4
X
X
X
X
Opportunities
O1
X
O2
X
X
O3
X
X
O4
X
X
X
W1
W2
W3
W4
S1
S2
S3
S4
Weakness
Strength
As a result, we found the following solutions on how to convert our weaknesses and
threats with strength and opportunities.
W1O2
Apply government or public funding
W2O4
Cooperation with other companies who will benefit from this market
W3O3
Enhanced advertisements and marketing
W4O4
Finding synergies with other companies
T1S4
Carrying out market research
T2S2
Verification of prototype with technical approval authorities (TÜV)
T3S4
Continuous development and improvement
T4S3
Market sharing to enhance the renewable market potential
O2S1
Apply government funding because of social interest
O1S2
Invite customers and promote prototype
O4S3
Share the resources with others to develop the markets
O3S4
Enhanced advertisements and marketing
T4W1
Improving infrastructure to increase demand and decrease product cost
T3W2
Accelerate product developments
T4W3
Develop standards with competitors to develop a common infrastructure
T4W4
Pay competitive salaries to attract human resources
No major risks or obstacles were identified in this research therefore it requires only
the will and endurance to make this business successful.
JFP Dec. 2019
December 2019 Business plans for hydrogen energy devices Page 47
Summary
Hydrogen energy cycles can be implemented in parallel to the national grid. It will fill
the power gap which is needed to enable electromobility because no European country
will have the financial resources to extend the power grid time 20 [ACEA; Eurostat; EEA;
EAFO Race 2050, page 35] that everyone would be able to charge his electric car at home.
The existing infrastructure of the national grid will be untouched, and market shares
from the main suppliers will be untouched too.
The new hydrogen market should be gradually implemented from the production site
(renewable energy plant) first. With government regulatory requirements by adapting
hydrogen heating and electricity as a mandatory requirement into the civil code. Surely
at the beginning public subsidies will be needed to generate a new industry and
customers around the hydrogen business, with all the infrastructure required.
However, we could clearly demonstrate that if there would be an F2F business
between renewable energy producers and final customers with the exchange of
hydrogen versa money, it is a profitable business.
All involved stakeholder will make a profit:
Customers in saving money compared to heating with fossils and taking power
from the grid.
Renewable energy producers who can sell their abandon energy without
feeding the grid and getting pennies for the effort.
Companies that can produce these devices.
Countries that do not need to upgrade their national grid, infrastructure and
facilities.
Achieving national goals for climate change preventions.
Domestic power will relieve the coercion of foreign countries.
The proposed energy cycle is evaluated for the European countries but it can be
assumed that in continents like China, Australia, and South America, similar
opportunities are even if the market key factors are different.
For counties like the US and Canada, the benefit would be higher and consequently,
the return of investment would be shorter because the energy consumption is higher.
For countries like Africa and India, there might be a chance only in large populated
cities with a similar infrastructure or power demand.
JFP Dec. 2019
December 2019 Business plans for hydrogen energy devices Page 48
Conclusion
It is successfully demonstrated that hydrogen as an energy carrier can be set up a
completely new industry in parallel to the existing power grid. We are only at the
beginning of the development, but it can be expected the same timeline and price
development as we have seen with the photovoltaic system. PV systems are widely
accepted, and price has fallen by 60% over 15 years. [28]
Under the current price situation for energy, the hydrogen energy cycle was proven to
be profitable. With a similar price development as PV cells, the hydrogen business
model will become even more profitable. The existing networks and infrastructure will
be not interfered therefore no major investments from governments are needed but
are always useful as an accelerator of trends.
The hydrogen energy cycle will complement the existing grid and it is not a competitor.
With additional buffer and storage capacity, it will make the renewable energy sector
expandable beyond the current limitations. Without these buffer, renewable energy will
be at their limits.
As an addition to the existing grid system, it will debottleneck power shortages and
avoid the massive reconstruction of the national grid system, which would generate a
big resistance from society and energy conglomerates who do not want to bear the
cost.
It will the basis for each country to make electro or hydrogen mobility feasible without
major investments in the infrastructure.
A potential investor will understand with this study the benefits and market potential of
a newly to be developed market and products. A buyer should understand the potential
of this technology to be come the producer of green energy.
We are looking forward to participating in the trend for a greener and pollutant-free
environment.
JFP Dec. 2019
December 2019 Business plans for hydrogen energy devices Page 49
Bibliography/ References:
1. Antonio Scipioni, Alessandro Manzardo Jingzheng Ren "Hydrogen Economy",
Supply Chain, Life Cycle Analysis and Energy Transition for Sustainability,
Elsevier,
ISBN: 978-0-12-811132-1
2. A. Dillon , The Hydrogen Cycle Generation, Storage and Fuel Cells, Materials
Research Society (15. Januar 2006)
ISBN-10: 155899839X
3. James Maclave,Terry Sincich, Statistics, 13 Edition,Pearson,
4. ISBN 10: 0-13-408021-1
5. Étienne Garbugli ,Lean B2B: Build Products Businesses Want, 5. März 2014
6. Jane Rowley, Numerical Case Study, Library of Comenius university Bratislava.
7. Michael Guy Deighton, Facility Integrity Management, Elsevier,
ISBN: 978-0-12-801764-7
8. Alejandro A. Franco, Physical Multiscale Modeling and Numerical Simulation of
Electrochemical Devices for Energy Conversion and Storage, Springer
ISBN 978-1-4471-5676-5
9. Hanane DadDougui ,Hydrogen Infrastructure for Energy Applications,
ISBN: 978-0-12-812036-1
10. Christian Rober & George Casella, Monte Carlo Statistical Methods, Springer
2004,
ISBN 0-387-21239-6
11. https://www.tdworld.com/digital-innovations/article/20970438/grid-stability-
challenges-and-solutions-for-todays-grid
12. https://www.energycentral.com/c/gr/how-do-we-stabilize-grid-higher-
penetration-renewables
13. Dirk C. Jordan and Sarah Kurtz, Photovoltaic Degradation Rates, NREL
Journal Article NREL/JA-5200-51664 June 2012
14. https://physics.stackexchange.com/questions/56277/why-is-electrical-energy-
so-difficult-to-store
15. H. Aoife M. Foley,Renewable and Sustainable Energy Reviews, Elsevier,
ISSN: 1364-0321
16. Hydrogen: Production and Marketing,
ACS Symposium Series; American Chemical Society: Washington, DC, 1980.
ISBN 0-8412-0522-1
17. Oliver Gassmann, Karolin Frankenberger, Michaela Csik:The Business Model
Navigator; November 9, 2014 Pearson
ISBN 978-1-292-06581-6
18. Hanane Dagdougui), Roberto Sacile, Chiara Bersani, Ahmed Ouammi
Hydrogen Infrastructure for Energy Applications: Production, Storage,
Distribution and Safety, Elsevier -Academic Press 2018
ISBN-13: 978-0128120361
19. Viktor Hacker and Shigenori Mitsushima, Fuel Cells and Hydrogen, From
Fundamentals to applied Research, Elsevier 2018,
ISBN 978-0-12-811459-9
20. Bundesnetzagentur - Bundeskartelamt, Monitoringbericht 2019 , Stand 13
Januar 2020
JFP Dec. 2019
December 2019 Business plans for hydrogen energy devices Page 50
21. Umwelt Bundesamt, Erneuerbare Energien in Deutschland Daten zur
Entwicklung im Jahr Stand März 2019
22. L. Frantzis, S. Graham, R. Katofsky, and H. Sawyer,Photovoltaics Business
Models National renewable Energy Laboratory, Subcontract Report NREL/SR-
581-42304 February 2008
23. Imre Török, YIELDS OF PV SOLAR ENERGY SYSTEMS AND
OPERATIONAL EFFICIENCY, PHD Thesis December 2017, UNIVERSITY
OF DEBRECE
24. U.S. Department of Energy Hydrogen Program, Fuel Cells for Backup Power
in Telecommunications Facilities, www.hydrogen.energy.gov
25. Mary-Rose de Valladares, GLOBAL TRENDS AND OUTLOOK FOR
HYDROGEN, December 2017, IEA Hydrogen
26. https://new.siemens.com/global/en/products/energy/renewable-
energy/hydrogen-solutions.html
27. The Authoritative Dictionary of IEEE Standards Terms, Seventh Edition, IEEE
Press, 2000, ISBN 0-7381-2601-2, page 588
28. Solar Photovoltaic Cell/Module Shipments Report 2011, Seite 4.
29. IWR https://www.iwr.de/news.php?id=35427 17.08.2018, 13:59
30. https ://www.bundesregierung.de/breg-en/issues/climate-action
31. BDEW-Strompreisanalyse Januar 2019 - Haushalte und Industrie, BDEW
Bundesverband der Energie- und Wasserwirtschaft e.V., January 2019
Figures:
FIG.1: Business model methodology
FIG. 2: Development of renewable energy (water, bioplant, wind, PV and Geothermal
energy) Erneuerbare Energien 2018, page 6, Umweltbundesamt Fachgebiet | 2.5
Postfach 14 06 06813 Dessau-Roßlau Feb. 2019 Atelier Hauer + Dörfler GmbH Berlin
ISSN 2363-829x
FIG. 3: Renewable energy market share from Jan. 2019 until January 2020
Statistisches Bundesamt, Gustav-Stresemann-Ring 11, 65189 Wiesbaden, Germany
Nettostromerzeugung von Kraftwerken zur öffentlichen Stromversorgung.2020
FIG. 4: Renewable energy share compared to German government and EU guideline.
Erneuerbare Energien 2018, page 14, Umweltbundesamt Fachgebiet | 2.5 Postfach
14 06 06813 Dessau-Roßlau Feb. 2019 Atelier Hauer + Dörfler GmbH Berlin
ISSN 2363-829x
FIG. 5: Current power (kW/h) price development average for Germany
https://www.energieheld.de/blog/energieverbrauch-eines-
wohnhauses/#Stromverbrauch
FIG. 6: Government subsidies for hydrogen devices distributed to technologies
JFP Dec. 2019
December 2019 Business plans for hydrogen energy devices Page 51
BMWi; statistic_id317101_brennstoffzellen-und-wasserstoff---foerdermittel-des-bundes-nach-sektor-
www.bmwgroup.com/de/unternehmen/bmw-group-news/artikel/BMWi_Hydrogen_NEXT.html 2018
FIG. 7: Distribution of hydrogen filling station in Europe
https://h2.live/tankstellen
FIG. 8: Installed and subsidised PV solar systems per province in Germany
EEG in Zahlen 2017 Bundesnetzangetur Jahresbericht 2017
FIG. 9: Installed PV solar systems in total installed.
EEG in Zahlen 2018 Bundesnetzangetur Jahresbericht 2017
Annual report 2018 Bundesnetzagentur for Germany
FIG. 10: Total installed wind energy power plants (onshore and offshore)
EEG in Zahlen 2018 Bundesnetzangetur Jahresbericht 2017
Annual report 2018 Bundesnetzagentur for Germany
FIG. 11: Total installed biomass power plants
EEG in Zahlen 2018 Bundesnetzangetur Jahresbericht 2017
Annual report 2018 Bundesnetzagentur for Germany
FIG. 12: Power demand in Germany for 2017 and 2018 in Tera Watt per sector
https://de.statista.com Source https://www.bdew.de/
FIG. 13: Number of private homes distributed for each German province
EEG in Zahlen 2018 Bundesnetzangetur Jahresbericht 2017
Annual report 2018 Bundesnetzagentur for Germany
FIG. 14: Number of inhabitants per household in Europe
https://de.statista.com Zahl der Personen je Haushalt
FIG. 15: Dwelling/accommodation type distribution
https://de.statista.com Schweiz Verteilung der Haushalte je Wohnungstyp
FIG. 16: Hydrogen production ways
Antonio Scipioni, Alessandro Manzardo Jingzheng Ren "Hydrogen Economy", page
40,Supply Chain, Life Cycle Analysis and Energy Transition for Sustainability, Elsevier,
ISBN: 978-0-12-811132-1
FIG. 18:Technologies of fuel cells
Fuel Cells and Hydrogen, page 16 FIG. 1.4 Materials and characteristics of hydrogen
oxygen fuel cells. From Fundamentals to applied Research, Elsevier 2018,
ISBN 978-0-12-811459-9
FIG. 19: Electrolyte fuel cell principle and real assembly
Picture on the left: new.siemens.com Picture on the right Courtesy of JFE LTD
Germany 2019
FIG. 21: Hydrogen production based on abandoned renewable energy
Courtesy of JFE LTD Germany 2019
FIG. 22: Hydrogen tank size per household/person/year
JFP Dec. 2019
December 2019 Business plans for hydrogen energy devices Page 52
Courtesy of JFE LTD Germany 2019
FIG. 23+24: Size comparison for stored volume of natural gas, hydrogen,
compressed air and potential energy of water
Courtesy of Zentrum für Solaren Wasserstoff. https://www.zsw-bw.de/forschung/h2-und-
brennstoffzellen/themen/wasserstoff-und-elektrolyse.html#gallery1506
FIG. 25: 6kW Power inverter with operation Panel and 48V DC
Courtesy of JFE LTD Germany 2019
FIG. 26: Batterie pack 48V DC from Truck batteries (self-made)
Courtesy of JFE LTD Germany 2019
FIG 27:Types of batteries depending on the charge efficiency and loading cycles
https://en.wikipedia.org/wiki/Comparison_of_commercial_battery_types
FIG. 28: Power providers in Germany
Annual report 2019 Bundesnetzagentur for Germany
FIG. 29: Market share of power distributing companies
Annual report 2019 Bundesnetzagentur for Germany
FIG. 30: Government subsidies for wind energy
Annual report 2019 Bundesnetzagentur for Germany
FIG. 31: Free market price for wind energy without government subsidies
[Bundesnetzagentur (federal grid monitoring agency) monitoring report page 104]
FIG. 32: Power demand per person per country (average)
https://de.statista.com Strombedarf nach Land.
FIG. 33: Cost structure of a hydrogen device depending on the persons
Courtesy of JFE LTD Germany 2019
FIG. 34: Cost distribution related to component
Courtesy of JFE LTD Germany 2019
FIG. 35: Capex of hydrogen device devices working at customer site.
Courtesy of JFE LTD Germany 2019
FIG. 36: Business model for total independence from the grid (PV cells not included)
Courtesy of JFE LTD Germany 2019
FIG. 37: Business model for consuming hydrogen only
JFP Dec. 2019
December 2019 Business plans for hydrogen energy devices Page 53
Courtesy of JFE LTD Germany 2019
FIG. 38: Business model for tank on rental basis
Courtesy of JFE LTD Germany 2019
FIG. 39: Possible revenue streams (tax not considered)
Courtesy of JFE LTD Germany 2019
FIG. 40: Power cuts within Europe per country
Versorgungszuverlässigkeit und Spannungsqualität in Deutschland,page 7, VDE,
Forum Netztechnik / Netzbetrieb im VDE (FNN) Bismarckstraße 33, 10625 Berlin
JFP Dec. 2019
December 2019 Business plans for hydrogen energy devices Page 54
Contact: Frank Jordan, MSC. Electrical Engineering
E-mail: FJ1808@web.de
ResearchGate has not been able to resolve any citations for this publication.
Book
Full-text available
Hydrogen Infrastructure for Energy Applications: Production, Storage, Distribution and Safety examines methodologies, new models and innovative strategies for the optimization and optimal control of the hydrogen logistic chain, with particular focus on a network of integrated facilities, sources of production, storage systems, infrastructures and the delivery process to the end users through hydrogen refueling stations. The book discusses the main motivations and criteria behind the adoption of hydrogen as an energy carrier or future fuel alternative. It presents current research in hydrogen production processes, especially from renewable energy sources, as well as storage and distribution. The book also reviews methods to model hydrogen demand uncertainties and challenges for the design of the future hydrogen supply chain. The authors go on to explore the network planning of hydrogen infrastructures, the safety and risk issues in hydrogen logistics and their future expectations. Energy engineering professionals, researchers and graduate students will find this a helpful resource to understand the methodologies used to assess the feasibility for developing hydrogen supply chains, hydrogen infrastructure and safety practices. Energy analysts and government agents can benefit from the book's detailed discussion of hydrogen energy applicability. Describes in detail the current state of the available approaches for the planning and modeling of the hydrogen infrastructure Discusses safety issues related to hydrogen in different components of its logistic chain and the methodological approach to evaluate risks that results from hydrogen accidents, including a mathematical model to assess the hazard and consequences of an accident scenario of hydrogen in pipelines Proposes a decision support system for hydrogen energy exploitation, focusing on some specific planning aspects, such as selection of locations with high hydrogen production, based mainly on the use of solar and wind energies Presents a short-term scenario of hydrogen distribution for automotive use, with a concrete, detailed, operative plan for a network of refueling service stations for the hydrogen economy.
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The aim of this book is to review innovative physical multiscale modeling methods which numerically simulate the structure and properties of electrochemical devices for energy storage and conversion. Written by world-class experts in the field, it revisits concepts, methodologies and approaches connecting ab initio with micro-, meso- and macro-scale modeling of components and cells. It also discusses the major scientific challenges of this field, such as that of lithium-ion batteries. This book demonstrates how fuel cells and batteries can be brought together to take advantage of well-established multi-scale physical modeling methodologies to advance research in this area. This book also highlights promising capabilities of such approaches for inexpensive virtual experimentation. In recent years, electrochemical systems such as polymer electrolyte membrane fuel cells, solid oxide fuel cells, water electrolyzers, lithium-ion batteries and supercapacitors have attracted much attention due to their potential for clean energy conversion and as storage devices. This has resulted in tremendous technological progress, such as the development of new electrolytes and new engineering designs of electrode structures. However, these technologies do not yet possess all the necessary characteristics, especially in terms of cost and durability, to compete within the most attractive markets. Physical multiscale modeling approaches bridge the gap between materials’ atomistic and structural properties and the macroscopic behavior of a device. They play a crucial role in optimizing the materials and operation in real-life conditions, thereby enabling enhanced cell performance and durability at a reduced cost. This book provides a valuable resource for researchers, engineers and students interested in physical modelling, numerical simulation, electrochemistry and theoretical chemistry.
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Published data on photovoltaic (PV) degradation measurements were aggregated and re-examined. The subject has seen an increased interest in recent years resulting in more than 11 000 degradation rates in almost 200 studies from 40 different countries. As studies have grown in number and size, we found an impact from sampling bias attributable to size and accuracy. Because of the correlational nature of this study we examined the data in several ways to minimize this bias. We found median degradation for x-Si technologies in the 0.5–0.6%/year range with the mean in the 0.8–0.9%/year range. Hetero-interface technology (HIT) and microcrystalline silicon (µc-Si) technologies, although not as plentiful, exhibit degradation around 1%/year and resemble thin-film products more closely than x-Si. Several studies showing low degradation for copper indium gallium selenide (CIGS) have emerged. Higher degradation for cadmium telluride (CdTe) has been reported, but these findings could reflect a convolution of less accurate studies and longer stabilization periods for some products. Significant deviations for beginning-of-life measurements with respect to nameplate rating have been documented over the last 35 years. Therefore, degradation rates that use nameplate rating as reference may be significantly impacted. Studies that used nameplate rating as reference but used solar simulators showed less variation than similar studies using outdoor measurements, even when accounting for different climates. This could be associated with confounding effects of measurement uncertainty and soiling that take place outdoors. Hotter climates and mounting configurations that lead to sustained higher temperatures may lead to higher degradation in some, but not all, products. Wear-out non-linearities for the worst performing modules have been documented in a few select studies that took multiple measurements of an ensemble of modules during the lifetime of the system. However, the majority of these modules exhibit a fairly linear decline. Modeling these non-linearities, whether they occur at the beginning-of-life or end-of-life in the PV life cycle, has an important impact on the levelized cost of energy. Copyright
The Hydrogen Cycle Generation, Storage and Fuel Cells
  • A Dillon
A. Dillon, The Hydrogen Cycle Generation, Storage and Fuel Cells, Materials Research Society (15. Januar 2006) ISBN-10: 155899839X
Numerical Case Study, Library of Comenius university Bratislava
  • Jane Rowley
Jane Rowley, Numerical Case Study, Library of Comenius university Bratislava.