Techno-economic analysis of hydrogen fuelling supply chains

Abstract

Ambitious decarbonization targets are introduced to combat climate change. According to the European Commission, sector coupling is required to achieve these targets. This includes the inclusion of renewables into sectors that are difficult to decarbonize, but also using resources more efficient, and introducing new clean fuels. Recent research has examined the increased integration of renewables into the energy system, or the coupling with other sectors, such as the heating industry. However, a paucity of studies investigated the integration of the transportation sector with the power sector based on different configurations of hydrogen supply chains, with hydrogen as a nodal connector. Some studies looked into the decarbonization of the transportation sector but diminished to explore how the coupling based on hydrogen supply chains including hydrogen storage could support the grid by providing balancing services. Therefore, the aim of this study was to examine potential designs for renewable hydrogen supply chains to provide joint applications, which are satisfying a hydrogen mobility demand, as well as providing balancing services to the power grid. However, the interconnection of the hydrogen system within the mobility sector, as well as the functioning power grid, based on the supply chain, poses multiple challenges on different levels. This complex problem requires solving in an integrated manner. In that regard, this thesis proposes a modelling approach for the optimal functioning of hydrogen generation and storage supply chains. Hereby the objective of the function is to maximize the profit of the supply chains through the supply of hydrogen fuel to the mobility sector and the contribution of balancing services to the power grid. The proposed optimization model is employed to perform a techno-economic comparison of two supply chain configurations: a distributed on-site supply chain, in which the hydrogen is generated at the fuelling stations, and a centralized off-site supply chain, where the hydrogen is centrally produced and afterwards transported to the dispersed fuelling stations. Both scenarios are quantitatively studied under two operating conditions, which are only selling to the mobility demand, and providing ancillary services to the power grid concurrently. It was found that both distributed and centralized hydrogen generation and storage supply chains can be used to offer hydrogen fuel to the transportation sector as well as provide different ancillary services to the grid. Furthermore, the numerical findings show that when both supply chains are planned and run concurrently for various ancillary services, the highest improvement in terms of financial parameters can be observed. The results also indicate that the profitability of the distributed and centralized supply chain is comparable under various operating conditions. However, while the distributed supply chain system presents better economic performances than the centralized supply chain system under the performed conditions, the centralized hydrogen supply chain has greater
4
technological benefits than the distributed supply chain in terms of flexibility. Whereas the decentralized supply chain is more beneficial for smaller demands and a more isolated operation, the centralized supply chain can provide higher values to investors who must deal with larger demands and more interconnected systems. Because the majority of these systems will be operated by larger system operators, and the supply chain, including fuelling stations, will be increasingly connected to the energy sectors rather than operating independently, the centralized alternative is likely to be the most beneficial investment. The analyses reported in this study are useful to interconnected investors or system operators for assessing the technical and economic viability of the widespread deployment of distributed and centralized hydrogen generation and storage supply chains integrated with the power grid. Future research might investigate other system configurations, such as including the hydrogen backbone into the operation or integrating the hydrogen supply chain with diverse industries, such as the heating sector. Different renewable energy sources, such as biomass or hydropower, might also be included. Other research might involve dynamic hydrogen pricing or the engagement of various distribution modalities with global demand points. Finally, for the supply chain systems to be successful, the social aspect must be considered, in which numerous market regulatory and governance impediments must be identified and exploited.