Prospects and Obstacles for Green Hydrogen Production in Russia

Alexandra Kopteva, Leonid Kalimullin, Pavel Tcvetkov and Amilcar Soares
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Alexandra Kopteva: Department of Electrical Engineering, Saint Petersburg Mining University, 21st Line of the VI, 2, 199106 Saint Petersburg, Russia
Leonid Kalimullin: Department of Strategic Development, RusHydro, 7 Malaya Dmitrovka Street, 127006 Moscow, Russia
Pavel Tcvetkov: Department of Economics, Organization and Management, Saint Petersburg Mining University, 21st Line of the VI, 2, 199106 Saint Petersburg, Russia
Amilcar Soares: Instituto Superior Técnico, Universidade de Lisboa, Av. Rovisco Pais, 1049-001 Lisbon, Portugal

Energies, 2021, vol. 14, issue 3, 1-21

Abstract: Renewable energy is considered the one of the most promising solutions to meet sustainable development goals in terms of climate change mitigation. Today, we face the problem of further scaling up renewable energy infrastructure, which requires the creation of reliable energy storages, environmentally friendly carriers, like hydrogen, and competitive international markets. These issues provoke the involvement of resource-based countries in the energy transition, which is questionable in terms of economic efficiency, compared to conventional hydrocarbon resources. To shed a light on the possible efficiency of green hydrogen production in such countries, this study is aimed at: (1) comparing key Russian trends of green hydrogen development with global trends, (2) presenting strategic scenarios for the Russian energy sector development, (3) presenting a case study of Russian hydrogen energy project «Dyakov Ust-Srednekanskaya HPP» in Magadan region. We argue that without significant changes in strategic planning and without focus on sustainable solutions support, the further development of Russian power industry will be halted in a conservative scenario with the limited presence of innovative solutions in renewable energy industries. Our case study showed that despite the closeness to Japan hydrogen market, economic efficiency is on the edge of zero, with payback period around 17 years. The decrease in project capacity below 543.6 MW will immediately lead to a negative NPV. The key reason for that is the low average market price of hydrogen ($14/kg), which is only a bit higher than its production cost ($12.5/kg), while transportation requires about $0.96/kg more. Despite the discouraging results, it should be taken into account that such strategic projects are at the edge of energy development. We see them as an opportunity to lead transnational energy trade of green hydrogen, which could be competitive in the medium term, especially with state support.

Keywords: hydrogen; hydropower; energy scenarios; sustainable energy; power accumulator; renewable energy; electrolyze; carbon-free energy; zero carbon emission; carbon neutrality (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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