Harnessing unconventional resources for large-scale green hydrogen production: An economic and technological analysis in Indonesia

Abstract

This study evaluates the potential for large-scale green hydrogen production in Indonesia by utilizing renewable energy sources connected on-grid, namely 50 MWp of solar panels and 35 MW of wind turbines, as well as a hybrid system combining both with a capacity of 45 MW at a grid cost of $100/kWh, in five strategic cities: Banyuwangi, Kupang, Bau-Bau, Banjarmasin, and Ambon. Using HOMER Pro software, various integrated energy system scenarios involving ion exchange membrane electrolysis and alkaline water electrolysis. Additionally, the study assumes a project lifespan of 15 years, a discount rate of 6.6 %, and an inflation rate of 2.54 %. The results showed that Bau-Bau recorded the highest hydrogen production, reaching more than 1.9 million kilograms per year, with the lowest levelized cost of hydrogen of $0.65/kg in Scheme 2. On the other hand, Kupang shows high costs for most schemes, with the levelized cost reaching $1.10/kg. In addition to hydrogen, the study also evaluated oxygen production as a by-product of electrolysis. Bau-Bau and Kupang recorded the highest oxygen production, with Scheme 6 achieving more than 15 million kilograms per year. The cost of electricity production varies between cities, with Banyuwangi having the lowest cost of electricity for wind energy at $80.9/MWh. The net present cost for renewable energy systems in Banyuwangi was $35.4 million for wind turbines, while the photovoltaic + wind combination showed the highest cost at $116 million. These findings emphasize the importance of hybrid systems in improving hydrogen production efficiency and supporting sustainable energy transition in Indonesia.