Development of a fuel cell Energy-Economics evaluation model for Distributed energy Promotion: Focusing on Establishing hydrogen city Policies in Seoul

• With the implementation of the Korean Distributed Energy Act (2024), Seoul’s electricity rates are expected to increase by at least 10%. With the introduction of fuel cells in Seoul, economic feasibility assessments have become essential. • The developed evaluation model is a three-layer TEA model: Layer 1 (technical analysis), Layer 2 (economic evaluation), and Layer 3 (optimization and sensitivity analysis). • The developed analysis model targets PEMFC/SOFC fuel cells and LNG/hydrogen fuels, with the goal of achieving a WACC of 4.5% and an energy self-sufficiency rate exceeding 20% ​​over a 30-year life cycle. • In this study, NPV and LCOE, which consider CAPEX (initial investment), OPEX (fuel cost), and O&M (maintenance and repair), are representative cost indicators. The price of imported hydrogen is projected to be KRW 4,176/kg. • The model was applied to the Yongsan Complex (615,896 m 2 ) for scenario analysis. In addition to the Excel-based evaluation model, sensitivity and optimal solution models were developed and verified. In Korea, the Special Act on the Promotion of Distributed Energy was enacted in 2023 and went into effect on May 14, 2024. With the implementation of this law, electricity rates in Seoul, which relies on centralized systems for 91% of its electricity, are expected to rise by at least 10%. Given Seoul’s poor quality solar and wind resources and the difficulty of large-scale installation within the city, the introduction of hydrogen fuel cells is crucial for achieving energy independence. In particular, numerous large-scale community complexes in Seoul are considering intensive installation. For intermittent solar and wind power generation, predicting energy production is crucial for stable supply. However, fuel cells offer relatively stable energy supply, making economic feasibility assessments more crucial. The initial investment cost of fuel cells is very high, so assessing economic feasibility requires considering both the utilization of electricity and heat generated by the fuel cell and the fuel price. Furthermore, South Korea plans to import hydrogen nationally to promote hydrogen use, so the use of hydrogen as a fuel must also be considered. However, the absence of such evaluation models hinders the adoption of fuel cells, ultimately making it difficult to achieve energy independence. Therefore, this study developed an energy-economic evaluation model for hydrogen fuel cells to achieve energy independence in community complexes in Seoul. The developed evaluation model consists of energy assessment, economic feasibility, and optimization modeling, with economic feasibility being the key. Therefore, the key is to identify the cost optimal point among initial investment costs, balanced electricity and heat supply, and operating costs depending on fuel type (LNG, hydrogen). To develop this evaluation model, this study collected data for economic evaluation and estimated the expected hydrogen supply price (unit price and transportation cost) and incorporated it into the model. The development of this evaluation model is expected to contribute to the introduction of fuel cells and related policy development in Seoul to increase energy independence.