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The German environment minister has called for the world’s first green-hydrogen tender to begin next year, starting at 5,000 tonnes and rising by the same amount each year until 2030, when 5GW of electrolysis capacity would be installed.

According to Recharge calculations, every 5,000 tonnes of green H2 would require about 250GWh of renewable energy, the equivalent of 79MW of offshore wind (at a capacity factor of 36%) or 130MW of onshore wind (capacity factor of 22%).

Future plans for energy production in the European Union as well as other locations call for a high penetration of renewable technologies (20% by 2020, and higher after 2020). The remaining energy requirements will be met by fossil fuels and nuclear energy. Smaller, less-capital intensive nuclear reactors are emerging as an alternative to fossil fuel and large nuclear systems. Approximately 50 small (<300 MWe) to medium-sized (<700 MWe) reactors (SMRs) concepts are being pursued for use in electricity and cogeneration (combined heat and power) markets. However, many of the SMRs are at the early design stage and full data needed for economic analysis or market assessment is not yet available. Therefore, the purpose of this study is to develop “target cost” estimates for reactors deployed in a range of competitive market situations (electricity prices ranging from 45–150 €/MWh). Parametric analysis was used to develop a cost breakdown for reactors that can compete against future natural gas and coal (with/without carbon capture) and large nuclear systems. Sensitivity analysis was performed to understand the impacts on competitiveness from key cost variables. This study suggests that SMRs may effectively compete in future electricity markets if their capital costs are controlled, favorable financing is obtained, and reactor capacity factors match those of current light water reactors. This methodology can be extended to cogeneration markets supporting a range of process heat applications.