Techno-Economic Feasibility of an Off-Grid Wind-Powered Hydrogen Microgrid for Green Hydrogen Production in Northwest Algeria: System Modelling by HOMER Energy

As the world moves towards decarbonization and mitigating climate change, renewable energy systems are becoming crucial components of the power infrastructures of the future. Traditional centralised power grids still rely on fossil fuels and nuclear energy, which contribute substantially to greenhouse gas emissions and pose growing risks to energy security. In contrast, microgrids offer a flexible way to integrate renewable energy source RES, increasing local reliability and reducing transmission losses. Using hydrogen as an energy storage solution can help overcome wind and solar variability thanks to the power-to-hydrogen P2H process in hydrogen-based microgrids. Excess electricity generated during periods of high renewable output can be converted into hydrogen via electrolyzers and stored in various forms to be reconverted into electricity through fuel cells or turbines, providing backup power for microgrids. Using HOMER Pro, this study evaluates these advancements through a case study simulating an off-grid hydrogen-based microgrid northwest of Algeria near the Arzew LNG export port, powered by an onshore wind farm. The proposed microgrid supplies electricity to both a hydrogen production facility and a wastewater treatment plant that provides water for electrolysis. The techno-economic simulation yields a Levelized Cost of Hydrogen (LCOH) of $3.87/kg and a Levelized Cost of Electricity (LCOE) of $0.0465/kWh. The Net Present Cost (NPC) of the full system over the 25-year project lifetime is approximately $452.1 million. Placing these results within the Algerian energy context reveals their practical significance when compared with Algeria's current LCOE of $0.08 to $0.1/kWh. Wind resources for the Arzew region (35.8°N, 0.3°W) are based on NASA's POWER database, at hub heights of 100 m. The average annual wind speed is 4–7 m/s and supports the capacity factor of 36.4% for the selected turbine configuration.