4 common Problems That Green Hydrogen Project Developers Often Face, and How to Solve Them

The push for green hydrogen and Power-to-X projects is becoming increasingly prominent in the energy sector. However, project developers frequently encounter several challenges that can hinder their progress and success. But what are the most common obstacles, and how can you overcome them? We'll walk you through it.

1. High Costs and Time Consumption   

Green hydrogen projects are notoriously more expensive and time-consuming in early stages than renewable energy projects. The process involves a much more complex and interconnected energy system, numerous external parties and auditors, which can lead to inefficiencies and increased costs already in greenfield stages.

Developers must navigate through extensive business schemes and iterate a large number of conceptual designs, which often results in a convoluted, obscure and resource-draining process.

How to streamline costs and processes

Project developers can significantly reduce the time and cost associated with the business development and project conceptual design by using the Southern Lights Software. The tool enhances team productivity, enabling them to accomplish more with the same resources. This reduction in engineering hours translates to increased precision, lower costs and faster project timelines.

2. Lack of Transparency and Agility

Developing a green hydrogen project from scratch requires clear communication and transparency between business teams and technical teams, especially when dealing with external stakeholders like consultants, banks, off-takers, and engineering firms.

When processes, calculations and project metrics are opaque, trust diminishes, and the risk of project failure to move forward to next stages increases. Additionally, the inability to quickly adapt to changes in the market landscape, such as changes in regulation, requirements from off-takers or changes in the technology offerings from OEMs, further hampers agility and competitiveness.

How to enhance transparency and agility

Our solution brings transparency to every stage of the project, making it easy for all stakeholders to understand and trust the process. Share reports, track technical and economical assumptions and test the sensitivity of your feasibility to parameter variations such as cost or plant size.

This transparency is crucial for gaining the confidence of banks, off-takers, and other external parties. Additionally, our software allows developers to react swiftly to market changes, ensuring they remain competitive and agile internalizing these capacities within their teams.

Also read: Introducing Green Ammonia: Revolutionizing Power-to-X Project Development

3. Complex Decision-Making Processes   

Decision-making in the initial stages of green hydrogen projects is fraught with high risk and limited budgets. Deciding to assign a budget for a project to do a Pre-FEED or applying with the project for environmental permits can be an expensive decision affecting the development budget, if the pre feasibility has not been properly checked.

The complexity of these decisions, combined with the necessity for technical soundness and accuracy, makes it difficult for the business teams to work without proper software, and challenging for developers to proceed confidently with their decision making.

How to simplify the decision-making

With our software, the decision-making process becomes more straightforward and less risky. The software provides clear, data-driven insights that help developers make informed choices. We have productized state-of-the-art engineering models, technology components and economic assessments, in a transparent software meant for business development and de-risking decision making. As a result, energy developers can move forward with confidence, even during the initial stages of the project maximizing profitability by design.

4. Technical Proficiency and Auditability   

Ensuring that technical models used for activities such as feasibility studies, technology selection, or permitting, are sound, transparent, and easy to audit both internally and externally is critical.

Modeling oversights in variables such as electrolyzer operational restrictions, degradation, efficiency, business model assumptions or project finance parameters can lead to significant deviations in feasibility and setbacks in the project development compromising budget and gate approval. Traditional tools like Excel are prone to errors, making it difficult to maintain quality assurance consistency and auditability.

How to ensure technical soundness and auditability

Our technical models are advanced yet transparent and easy to audit. This reduces the likelihood of errors and increases the reliability of the project data. Developers can easily modify parameters within the models, ensuring they meet their specific needs without the risk of unnoticed mistakes.v

Techno-Economic Metrics in the Southern Lights Software

Why choose Southern Lights?

Our software is not just a software tool; it’s a comprehensive service designed to support green hydrogen project development from start to finish. Here’s what sets us apart:

  • Technical Proficiency: Our models are as sophisticated as those used in research, but tailored for business development and conceptual design.
  • Transparency and Auditability: Easy-to-understand models that can be audited and parameter variation studied without hassle.
  • Business-Focused: Developed with the energy industry in mind, our solution is perfect for optimizing costs, financial models, and project profitability by design during pre-investment phases.
  • World Class Customer Service: We offer expert support to ensure you get the most out of our software, combining advanced technology with personalized service.

Our SaaS solution empowers you to succeed. It’s designed to make your projects less risky, more transparent, and ultimately, more profitable. Interested? Book a demo and let us show you!