Net Present Value Based Profitability Analysis of Nuclear Assisted Electrolytic Hydrogen Production Projects

Rupsha Bhattacharyya

Abstract

Techno-commercial analysis of hydrogen production by water electrolysis using electricity from nuclear power reactors is carried out in this work, using a combination of levelized cost of hydrogen (LCOH) and net present value methods (NPV) which consider time value of money. Codes are developed in-house to estimate project profitability (i.e. profitable sale prices of the hydrogen produced) under baseline, optimistic and pessimistic techno-commercial scenario using simplified financial metrics such as the internal rate of return (IRR). It appears that sale prices of hydrogen will need to be 1.5 to 2 times larger than the production cost for ensuring project profitability during energy transition though it has to be seen whether a market for hydrogen at such price points will be immediately available or not. These studies are essential for scaling up an existing mature technology even further so that wide spread deployment can be carried out for sustainable development while ensuring project profitability.

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