The economics of off-shore wind-based hydrogen production in Saudi Arabia
Ahmed Albalawi, Shahid Hasan, Amro M. Elshurafa
Abstract
Offshore hydrogen production from offshore wind energy is gaining global attention as a scalable solution for green hydrogen production. Several research papers have assessed this integration, but no comprehensive study exists for Saudi Arabia's offshore wind-based hydrogen potential, and especially studies in ultra-deep-water sites. This paper aims to assess the cost-effectiveness of producing hydrogen onshore versus offshore from wind power in the Red Sea. Using a depth- and distance-sensitive cost model augmented with Monte Carlo uncertainty analysis, the study evaluates the Levelized Cost of Hydrogen (LCOH) for both configurations. The LCOH from floating offshore wind ranges from $6.93 to $8.52/kg, reflecting the current high cost of the technology. The results show that offshore wind farm costs and floating foundations are the major capital expenditure (CAPEX) drivers. Significant cost reductions in the main components of the system can only bring the cost range down to $4.90 to $6.43/kg. Monte Carlo analysis shows a <10 % probability that LCOH approaches $5/kg. While onshore electrolysis remains slightly cheaper, both configurations will require substantial cost reductions to compete with alternative onshore renewable energy sources.