Economic Feasibility Analysis for the Use of Renewable Hydrogen for Blending in Gas Turbines Currently in Operation in Chile

This work estimates, by simulating different scenarios of the levelized costs of hydrogen (LCOH) and CO2 tax levels, the break-even cost in using renewable hydrogen (H2) as blending in natural gas (NG) turbines currently operating in the Chilean power system, using different types of H2 transportation. We use the variable operation cost as the main comparison metric to assess the adoption of blending, where we propose a methodology to internalize the CO2 tax as part of the variable cost. In addition, the potential benefits that the use of blending implies in terms of CO2 reduction and the savings in natural gas consumption and in CO2 tax cost are quantified. In addition, and to have a more holistic view of the adoption of the use of blending, a life cycle assessment (LCA) is carried out to estimate the environmental impact and to support the decision-making process among the various alternatives analyzed. The results under the different scenarios proposed show that both LCOH costs and CO2 tax levels have a relevant importance in the optimal selection of the type of H2 transportation to be used. For all scenarios analyzed in our case study, the use of gas pipelines results as the best alternative in terms of costs, followed by the use of tubular trailer trucks of H2 gas and, finally, by the use of LH2 tanker trucks. Nevertheless, each of these means of transportation has advantages and disadvantages, and its final choice will largely depend on factors such as the transport distance, the volume of consumption, the environmental impact, and the feasibility of using organic carriers such as ammonia.