Optimal LOHC facility sizing: Integrating electrolyzer degradation and carbon pricing

Liquid Organic Hydrogen Carriers (LOHC) offer a practical solution to overcome the storage and transportation challenges hindering large-scale adoption of green hydrogen. By leveraging existing fuel infrastructure, LOHC eliminates the need for high-pressure or cryogenic conditions, significantly reducing logistical complexity and cost. This paper presents an advanced optimal sizing framework for a renewable-powered, grid-connected LOHC generation facility designed to simultaneously meet transportation-sector hydrogen demand and participate in the ancillary services market. The framework integrates a detailed non-linear electrolyzer degradation–recovery model and incorporates stack replacement cost and carbon pricing directly into the optimization to incentivize renewable energy utilization. It also accounts for seasonal variations in ancillary service requirements. Embedding degradation and replacement effects within the optimization improves electrolyzer efficiency management, reducing annual efficiency degradation from 2.1% to 1% and extending stack lifetime from 5 to 10 years. Consequently, the facility achieves a substantially higher net present value of $88.38 million compared with a base case that neglects these effects during optimization. The results highlight the economic and operational advantages of degradation-aware optimization and comprehensive market modeling in the long-term planning of hydrogen infrastructure.