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Low-cost hydrogen in the future European electricity system – Enabled by flexibility in time and space

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  • Walter, Viktor
  • Göransson, Lisa
  • Taljegard, Maria
  • Öberg, Simon
  • Odenberger, Mikael

Abstract

The present study investigates four factors that govern the ability to supply hydrogen at a low cost in Europe: the scale of the hydrogen demand; the possibility to invest in large-scale hydrogen storage; process flexibility in hydrogen-consuming industries; and the geographical areas in which hydrogen demand arises. The influence of the hydrogen demand on the future European zero-emission electricity system is investigated by applying the cost-minimising electricity system investment model eNODE to hydrogen demand levels in the range of 0–2,500 TWhH2. It is found that the majority of the future European hydrogen demand can be cost-effectively satisfied with VRE, assuming that the expansion of wind and solar power is not hindered by a lack of social acceptance, at a cost of around 60–70 EUR/MWhH2 (2.0–2.3 EUR/kgH2). The cost of hydrogen in Europe can be reduced by around 10 EUR/MWhH2 if the hydrogen consumption is positioned strategically in regions with good conditions for wind and solar power and a low electricity demand. The cost savings potential that can be obtained from full temporal flexibility of hydrogen consumption is 3-fold higher than that linked to strategic localisation of the hydrogen consumption. The cost of hydrogen per kg increases, and the value of flexibility diminishes, as the size of the hydrogen demand increases relative to the traditional demand for electricity and the available VRE resources. Low-cost hydrogen is, thus, achieved by implementing efficiency and flexibility measures for hydrogen consumers, as well as increasing acceptance of VRE.

Suggested Citation

  • Walter, Viktor & Göransson, Lisa & Taljegard, Maria & Öberg, Simon & Odenberger, Mikael, 2023. "Low-cost hydrogen in the future European electricity system – Enabled by flexibility in time and space," Applied Energy, Elsevier, vol. 330(PB).
    • Handle: RePEc:eee:appene:v:330:y:2023:i:pb:s0306261922015720
    DOI: 10.1016/j.apenergy.2022.120315
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    References listed on IDEAS

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    1. Lisa Göransson & Mariliis Lehtveer & Emil Nyholm & Maria Taljegard & Viktor Walter, 2019. "The Benefit of Collaboration in the North European Electricity System Transition—System and Sector Perspectives," Energies, MDPI, vol. 12(24), pages 1-23, December.
    2. Walter, Viktor & Göransson, Lisa, 2022. "Trade as a variation management strategy for wind and solar power integration," Energy, Elsevier, vol. 238(PA).
    3. Lux, Benjamin & Pfluger, Benjamin, 2020. "A supply curve of electricity-based hydrogen in a decarbonized European energy system in 2050," Applied Energy, Elsevier, vol. 269(C).
    4. Toktarova, Alla & Walter, Viktor & Göransson, Lisa & Johnsson, Filip, 2022. "Interaction between electrified steel production and the north European electricity system," Applied Energy, Elsevier, vol. 310(C).
    5. Göransson, Lisa & Goop, Joel & Odenberger, Mikael & Johnsson, Filip, 2017. "Impact of thermal plant cycling on the cost-optimal composition of a regional electricity generation system," Applied Energy, Elsevier, vol. 197(C), pages 230-240.
    6. Kan, Xiaoming & Hedenus, Fredrik & Reichenberg, Lina, 2020. "The cost of a future low-carbon electricity system without nuclear power – the case of Sweden," Energy, Elsevier, vol. 195(C).
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