How digitalization of hydrogen production will enable better, cleaner industries
Digitalization can be a massive driver for optimizing large-scale green hydrogen production, enabling cost-efficient manufacturing of everything from green steel to ammonia and methanol. Our Chief Digital Officer Olof Hernell and Chief Growth Officer Kajsa Ryttberg-Wallgren, who are spearheading the development of our optimization software solutions, share how digitalizing green hydrogen production will take steel into the future.
Still early in its development, green hydrogen production for industrial applications is expected to grow significantly by 2050. The reason why most industries have not yet adopted green hydrogen largely comes down to cost, as it has historically been far more expensive than other energy feedstocks including natural gas-based grey and blue hydrogen. Therefore, it is crucial to ensure accessibility to the most viable green hydrogen production methods, which in an industrial setup requires automation and digitalization.
Since there can't be any quality measures of a hydrogen gas molecule, ultimate efficiency is the only target. The price of production and the accumulated carbon emissions in the process are what matters.
Olof HernellChief Digital Officer
When establishing a green hydrogen plant, there are two main factors to consider: the costs for hydrogen production and the total cost of ownership. According to Kajsa, there has to be a holistic view of the design of the factory and running the plant, for everything to be as cost efficient as possible.
The total cost of ownership is from the day you start designing the factory until you close it down. We believe that the only way to keep costs down is to combine the knowledge that you accumulate over time with the implementation of data, using that data over and over again to improve how the plant operates.
Kajsa Ryttberg-WallgrenChief Growth Officer
When producing green hydrogen, the electricity accounts for approximately 70 percent of the total cost. In most regions, the renewable energy needed to power the electrolysis is highly intermittent, requiring advanced production timing and storage management to ensure feedstock to the next step in the process, iron production. That is why Stegra has created software optimizing hydrogen plant operations to keep the cost as low as possible.
It is not just a fancy algorithm – the software we are creating will help us to achieve the lowest cost of production regardless of what geography we operate within.
Kajsa Ryttberg-WallgrenChief Growth Officer
Optimizing the production planning enables Stegra to cycle plan the production of the electrolyzers on a very granular basis, presenting a key opportunity to add value to our local communities: the ability to feed excess energy back to the grid.
To design a hydrogen plant in a data-driven way, Olof and Kajsa’s teams have developed an additional software solution used to optimize the configuration of the plant. The purpose is to build green hydrogen plants that will reach the lowest possible cost level, also called the levelized cost of hydrogen (LCOH), which can also be used to measure the overall competitiveness of hydrogen.
“Once you design a plant in a bad way, you will not have the lowest LCOH – even if you add an optimization system – so getting it right from the start is crucial,” Kajsa says, adding that the configuration optimization software will enable Stegra to build factories in a modular way, making the design process more time and cost efficient.
Based on the prerequisites for a specific region, the software will not only provide an LCOH with design layouts and technology for the hydrogen plant, but also where there is access to an abundance of renewable electricity, allowing Stegra to ring-fence ideal locations for green hydrogen production worldwide.
Our focus is to be the leader in large-scale green hydrogen production for industrial offtake. We need to have an excellent collaboration throughout our value chain – from technical partnerships to customers – which requires a strong backbone of software to ensure cost efficiency. We also need to work closely with the next generation of electrolyzer companies to develop the technology to continuously improve our efficiency. Because we're not just building one plant – we are replicating the process all over again, allowing us to be quicker than anyone else when it comes to conceptualization, plant design and engineering, executing a hydrogen plant project much faster than our competition.
Kajsa Ryttberg-WallgrenChief Growth Officer