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BIBTEX RIS

Perspective under uncertainty and risk in green hydrogen investments: A stochastic approach using Monte Carlo simulation

2023; Elsevier BV; Volume: 49; Linguagem: Inglês

10.1016/j.ijhydene.2023.08.253

1879-3487

Jorge Vleberton Bessa de Andrade, Vinicius Costa, Benedito Donizeti Bonatto, Giancarlo Áquila, Edson de Oliveira Pamplona, Ramchandra Bhandari,

Energy, Environment, and Transportation Policies

This paper presents a new approach to calculating the levelized cost of hydrogen (LCOH) using a stochastic model under an uncertainty and risk perspective. The research problem is associated with how to integrate the concept of financial risk to assess investments in small-scale green hydrogen production for more robust results, resolving issues related to underlying economic and technical factors, often overlooked, that may impact the production of green hydrogen in Brazil and Germany. The approach is applied to an investment project at two localities: Itajubá, Brazil, and Cologne, Germany, to investigate the underlying economic and technical factors that may impact the production of green hydrogen. In this stochastic approach, the Value at Risk (VaR) is calculated with a confidence level of 95% for 5000 LCOH values for each city, generated by the Monte Carlo Simulation (MCS). MCS results show that a correlation between assumptions (uncertainties) significantly affects LCOH with more favorable conditions to produce green hydrogen in Cologne. The risk analysis results show a significant difference concerning the deterministic approach when implementing the risk measure with VaR-LCOH of US$8.39 for Itajubá and VaR-LCOH of US$8.21 for Cologne.