Modeling and analysis of the operational and
investment costs of hydrogen sea transportation
applied to NH3 and LH2 energy derivatives
Cayet Pierre, , Gharbi Oualid, , and Le Goff Elise
The paper introduces a multi-regional, multi-commodity investment and operational optimization model to evaluate the levelised transportation cost of hydrogen and its derivatives for specific maritime trade routes. It is formulated as a Mixed-Integer Linear Programming (MILP) with both annual investment and daily operational decisions, covering conversion, export terminal storage, transportation, import terminal storage and reconversion flows. Our model both accounts for stock and flow constraints, and includes factors influencing transportation costs such as maritime distance, port charges and canal fees, ship size and required power, fuel consumption and boil-off gas (BOG) losses.
We keep track of the number of vessels used for shipping using integer variables, with explicit constraints on fuel requirements for ships using their own cargo for propulsion. The model, coupled with a comprehensive cost decomposition, allows us to track non-linearities in the dynamics of cost categories and economies of scale for extremely low to large import volumes of hydrogen and its derivatives. This allows to derive the minimum efficient scale for specific maritime trade routes and provide a precise decomposition of the share of each cost category in the total cost for various trade volumes, in addition to their allocation between exporting and importing regions.
The results indicate a consistent transportation cost differential in favour of NH3 when compared to LH2, even when accounting for the extra-cost associated to the conversion and reconversion of hydrogen to and from NH3. We also provide a short econometric analysis of the effects of a subset of exogenous parameters identified in the literature on hydrogen transportation cost. Our results provide a robust and comprehensive quantitative basis for further analysis of investment decisions and coordination issues relative to the early-stages of an international hydrogen supply chain, in particular when risk aversion and cost uncertainties are considered.