Damping green hydrogen costs by oxygen valorisation, a financial evaluation.

Water electrolysis is the reference technology for hydrogen production from renewable energy power. Unfortunately, the hydrogen produced by electrolysis is currently more expensive than that of conventional processes: steam methane reforming (SMR), oil/naphtha reforming or coal gasification. For this reason, the hydrogen worldwide produced from fossil fuels still dominates the scene (48% from natural gas, 30% from oil, and 18% from coal), while electrolysis only accounts for a share of 4% [1]. Based on our previous studies [2-6], revenues could be obtained by valorising the co-produced oxygen. In agreement with recent IEA considerations [7], the co-produced oxygen can be used at a smaller scale in the health care (medical) sector, or at a larger scale for industrial purposes (feedstock); both markets are growing with estimated annual rates of about 4-5% in the next years. For evaluating the profitability of this approach, we present financial analyses carried out by considering first a hypothetical business activity (public or private) adopting a photovoltaic-powered electrolysis plant considering the co-production of Hydrogen and Oxygen both to sell or to fulfil its needs of oxygen for its own use. Then the application of this concept to hospitals. In this work, we propose a financial evaluation of different sizes of the RESbased electrolytic plant for hydrogen and oxygen co-production, in order to meet a variety of requests or applications. Based on the method proposed by Kuckshinrichs et al. [8], and adopted in our previous works [3-6], we performed an economic-financial analysis of the investigated solutions. In particular, investment costs, operative and maintenance (O&M) costs, and taxes have been included in the calculation of the net present value (NPV) of the plant. The incoming /avoided costs related to oxygen are also considered, by assuming a (market) price of gaseous oxygen varying between 1 and 7 EUR/kg [9]. The results were that: 1) Yes, the valorisation of oxygen is able to strongly reduce the hydrogen production costs; 2) The proposed approach is economically attractive for a company selfconsuming the produced oxygen if compared to the case when the same enterprise simply buys the compressed oxygen from local gas distributors/resellers. 3) In hospitals the economic attractiveness is higher due to the higher cost of medical oxygen in respect to technical oxygen gas.