Prior to now week I’ve been concerned in an odd battle with researchers on the Worldwide Council on Clear Transportation (ICCT). I’ve been attempting to elucidate to them why their costing of electrical energy for hydrogen manufacturing makes completely no sense, and I haven’t been in a position to get via to them. It seems I used to be giving them an excessive amount of credit score for understanding something in any respect about electrical energy technology and distribution.
What’s been taking place? Effectively, the ICCT launched a significant whole value of possession report just lately for heavy items autos in Europe. These are the large vehicles that carry 35 tons of products alongside the highways. It had three extraordinary claims that have been clearly and clearly in error. The primary declare was that manufacturing hydrogen at a refueling station from electrical energy and water could be value aggressive with diesel in 2030. The second declare was that the power prices per kilometer could be solely 50% greater than utilizing electrical energy in battery electrical autos in 2030. The third declare was that hydrogen could be solely 10% dearer than utilizing electrical energy in battery electrical vehicles in 2050 on a per kilometer power foundation.
These are extraordinary claims and as such require extraordinary proof, however there was no extraordinary proof offered.
Why are the claims extraordinary? As a result of manufacturing hydrogen with electrical energy and utilizing it in gas cells is at greatest a 3rd of the power effectivity of utilizing it in battery electrical autos. 3 times the electrical energy will value 3 times as a lot. The primary is physics. The second is economics.
Was there any recognition within the report or ICCT touchdown web page that the claims have been extraordinary? No. Was there deep proof within the report that justified the extraordinary claims? No. There was simply the idea of value of a kilogram of manufactured hydrogen could be primarily based on filth low-cost electrical energy and that this was utterly cheap.
There are potential methods round this which have their very own deep flaws, however if you’re on the finish of the distribution grid shopping for electrical energy from a utility and both placing it into batteries or placing it into manufacturing hydrogen, you’re paying the identical value for the electrical energy at any given time. That is extremely primary stuff about shopping for electrical energy from utilities.
I revealed a bit mentioning the clear failure and tracing it to an earlier ICCT research by completely different authors which had very naive assumptions about electrical energy charges being filth low-cost for grid-delivered electrons to refueling stations whereas the identical wires bringing the identical electrons for battery electrical autos have been priced at full business charges.
I assumed, in good religion, that the ICCT would acknowledge that the identical electrons on the identical place via the identical wires wouldn’t value completely different costs, and that the brand new research’s authors would understand the error they usually and the ICCT would retract and repair the report with the extraordinary claims. No such luck.
What occurred subsequent was that one of many lead authors doubled down on the assertion, defending their methodology as deliberate and acceptable.
So I attempted once more, explaining that on the station firmed electrical energy required a bunch of stuff and that inexperienced electrons beneath PPAs wanted to not solely have additionality however temporality and locality. Good refined stuff for a dialogue with individuals who perceive electrical energy. Any luck? No.
At this level the lead creator was getting aggravated, attempting to defend what was clearly indefensible, vastly decrease charges for electrical energy for manufacturing hydrogen on the identical place the place electrons would alternatively be put into batteries. They have been arguing about how a lot roughly they have been pricing electrical energy at, claiming my numbers have been improper, once they didn’t perceive that your entire foundation of their argument was flawed.
Sadly, I misunderstood their stage of sophistication associated to wholesale vs business electrical energy charges, PPAs and RECs. So right here’s a little bit of a primer, going again to stuff I assumed that they’d understood however clearly didn’t. I had been asserting naivety on the a part of the primary research’s authors, however hadn’t realized how naive the research was or that the authors of the brand new research didn’t know the fundamentals both.
To be clear, I’m not attempting to select on the ICCT or the authors of the trucking TCO paper. They don’t perceive some issues and as such the edifice of their evaluation is just improper. They’ve to repair that. And if the ICCT will get one thing this primary improper, so do a variety of different organizations. And meaning a variety of the discussions round hydrogen for power are fatally flawed.
So listed below are the fundamentals.
An influence buy settlement (PPA) for renewable power and the related renewable power certificates (REC) are utterly decoupled from the business value of electrical energy an organization pays a utility.
PPAs pay for development of a wind or photo voltaic farm that’s connected to the grid. The group paying for the PPA receives RECs. They promote RECs on a marketplace for these devices. The sale of RECs pays for the PPA, roughly. A gaggle throughout the monetary aspect of the corporate does this on their behalf. The corporate does this to make sure that someplace on the grid there are inexperienced electrons whatever the electrons that they’re buying at their services.
In the meantime, utterly individually from the PPA and REC group, an operations group indicators contracts with utilities native to their services for provision of electrical energy at business charges. The native electrical utility is never a celebration to the PPA and even whether it is, it’s a unique a part of the utility and a unique contract. It doesn’t change its business charges for electrical energy as a result of the corporate has a separate contractual settlement with different entities to purchase inexperienced electrical energy and promote RECs. They’re utterly decoupled processes.
Separate teams. Separate financial flows. Separate transactions. Separate authorized agreements. Completely different events. Not coupled however decoupled.
For a refueling station on a freeway the place vehicles will refuel, the PPAs and RECs are utterly irrelevant to the value of electrical energy delivered to the station. The one related issue is the native utility and their business charges. Shopping for electrical energy from the utility for batteries or hydrogen has no bearing on the value of electrical energy. The worth of electrical energy at any hour or stage of demand shall be equivalent in each instances.
There are complexities round peak energy calls for, managing peak energy and arbitraging time of use billing which I additionally alluded to in my earlier articles, assuming I used to be coping with researchers who grasped the fundamentals above. Because of this, a lot confusion, not a lot gentle on their aspect. There’s a minor exception case the place wind and photo voltaic farms are inbuilt shut proximity to the power which is buying the electrical energy and the utility offering the electrical energy is an integral a part of the PPA and REC contractual agreements. This received’t apply to refueling stations on highways for essentially the most half, would apply equally to battery electrical and hydrogen gas cell vehicles and shouldn’t be the bottom case.
And so, this piece, going again to what I assume is the basic lack of know-how on their half about how electrical energy is definitely purchased and offered. That is, once more, actually primary stuff about pricing electrical energy. My assuming that individuals who clearly favored molecules for power would perceive this regardless of a number of years of frequently operating up towards the identical lack of comprehension is my dangerous. I ought to have began with the fundamentals.
