IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v175y2023ics0301421523000241.html
   My bibliography  Save this article

Power-to-X in energy hubs: A Danish case study of renewable fuel production

Author

Listed:
  • Kountouris, Ioannis
  • Langer, Lissy
  • Bramstoft, Rasmus
  • Münster, Marie
  • Keles, Dogan

Abstract

The European Commission recently proposed requirements for the production of renewable fuels as these are required to decarbonize the hard-to-electrify parts of the industrial and heavy transport sectors. Power-to-X (P2X) energy hubs enable efficient synergies between energy infrastructures, production facilities, and storage options. In this study, we explore the optimal operation of an energy hub by leveraging the flexibility of P2X, including hydrogen, methanol, and ammonia synthesizers by analyzing potential revenue streams such as the day-ahead and ancillary services markets. We propose EnerHub2X, a mixed-integer linear program that maximizes the hub’s profit based on current market prices, considering the technical constraints of P2X, such as unit commitment and non-linear efficiencies. We investigate a representative Danish energy hub and find that without price incentives, it mainly sells renewable electricity and produces compressed hydrogen. A sufficient amount of renewable ammonia and methanol is only produced by adding a price premium of about 50% (0.16 €/kg) to the conventional fuel prices. To utilize production efficiently, on-site renewable energy sources and P2X must be carefully aligned. We show that renewable power purchase agreements can provide flexibility while complying with the rules set by the European Commission.

Suggested Citation

  • Kountouris, Ioannis & Langer, Lissy & Bramstoft, Rasmus & Münster, Marie & Keles, Dogan, 2023. "Power-to-X in energy hubs: A Danish case study of renewable fuel production," Energy Policy, Elsevier, vol. 175(C).
    • Handle: RePEc:eee:enepol:v:175:y:2023:i:c:s0301421523000241
    DOI: 10.1016/j.enpol.2023.113439
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421523000241
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2023.113439?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zhang, Hanfei & Wang, Ligang & Van herle, Jan & Maréchal, François & Desideri, Umberto, 2020. "Techno-economic comparison of green ammonia production processes," Applied Energy, Elsevier, vol. 259(C).
    2. Mancarella, Pierluigi, 2014. "MES (multi-energy systems): An overview of concepts and evaluation models," Energy, Elsevier, vol. 65(C), pages 1-17.
    3. Bramstoft, Rasmus & Pizarro-Alonso, Amalia & Jensen, Ida Græsted & Ravn, Hans & Münster, Marie, 2020. "Modelling of renewable gas and renewable liquid fuels in future integrated energy systems," Applied Energy, Elsevier, vol. 268(C).
    4. Lin, Haiyang & Wu, Qiuwei & Chen, Xinyu & Yang, Xi & Guo, Xinyang & Lv, Jiajun & Lu, Tianguang & Song, Shaojie & McElroy, Michael, 2021. "Economic and technological feasibility of using power-to-hydrogen technology under higher wind penetration in China," Renewable Energy, Elsevier, vol. 173(C), pages 569-580.
    5. Gunther Glenk & Stefan Reichelstein, 2019. "Publisher Correction: Economics of converting renewable power to hydrogen," Nature Energy, Nature, vol. 4(4), pages 347-347, April.
    6. Pérez-Fortes, Mar & Schöneberger, Jan C. & Boulamanti, Aikaterini & Tzimas, Evangelos, 2016. "Methanol synthesis using captured CO2 as raw material: Techno-economic and environmental assessment," Applied Energy, Elsevier, vol. 161(C), pages 718-732.
    7. Lester, Mason Scott & Bramstoft, Rasmus & Münster, Marie, 2020. "Analysis on Electrofuels in Future Energy Systems: A 2050 Case Study," Energy, Elsevier, vol. 199(C).
    8. Zheng, Yi & You, Shi & Bindner, Henrik W. & Münster, Marie, 2022. "Optimal day-ahead dispatch of an alkaline electrolyser system concerning thermal–electric properties and state-transitional dynamics," Applied Energy, Elsevier, vol. 307(C).
    9. Chen, Yue & Wei, Wei & Liu, Feng & Wu, Qiuwei & Mei, Shengwei, 2018. "Analyzing and validating the economic efficiency of managing a cluster of energy hubs in multi-carrier energy systems," Applied Energy, Elsevier, vol. 230(C), pages 403-416.
    10. Durakovic, Goran & del Granado, Pedro Crespo & Tomasgard, Asgeir, 2023. "Powering Europe with North Sea offshore wind: The impact of hydrogen investments on grid infrastructure and power prices," Energy, Elsevier, vol. 263(PA).
    11. Campion, Nicolas & Nami, Hossein & Swisher, Philip R. & Vang Hendriksen, Peter & Münster, Marie, 2023. "Techno-economic assessment of green ammonia production with different wind and solar potentials," Renewable and Sustainable Energy Reviews, Elsevier, vol. 173(C).
    12. Kauw, Marco & Benders, René M.J. & Visser, Cindy, 2015. "Green methanol from hydrogen and carbon dioxide using geothermal energy and/or hydropower in Iceland or excess renewable electricity in Germany," Energy, Elsevier, vol. 90(P1), pages 208-217.
    13. Frick, Konor & Wendt, Daniel & Talbot, Paul & Rabiti, Cristian & Boardman, Richard, 2022. "Technoeconomic assessment of hydrogen cogeneration via high temperature steam electrolysis with a light-water reactor," Applied Energy, Elsevier, vol. 306(PB).
    14. Gunther Glenk & Stefan Reichelstein, 2019. "Economics of converting renewable power to hydrogen," Nature Energy, Nature, vol. 4(3), pages 216-222, March.
    15. Klyapovskiy, Sergey & Zheng, Yi & You, Shi & Bindner, Henrik W., 2021. "Optimal operation of the hydrogen-based energy management system with P2X demand response and ammonia plant," Applied Energy, Elsevier, vol. 304(C).
    16. Wu, Xiong & Qi, Shixiong & Wang, Zhao & Duan, Chao & Wang, Xiuli & Li, Furong, 2019. "Optimal scheduling for microgrids with hydrogen fueling stations considering uncertainty using data-driven approach," Applied Energy, Elsevier, vol. 253(C), pages 1-1.
    17. Parra, David & Zhang, Xiaojin & Bauer, Christian & Patel, Martin K., 2017. "An integrated techno-economic and life cycle environmental assessment of power-to-gas systems," Applied Energy, Elsevier, vol. 193(C), pages 440-454.
    18. Mendicino, Luca & Menniti, Daniele & Pinnarelli, Anna & Sorrentino, Nicola, 2019. "Corporate power purchase agreement: Formulation of the related levelized cost of energy and its application to a real life case study," Applied Energy, Elsevier, vol. 253(C), pages 1-1.
    19. Falko Ueckerdt & Christian Bauer & Alois Dirnaichner & Jordan Everall & Romain Sacchi & Gunnar Luderer, 2021. "Potential and risks of hydrogen-based e-fuels in climate change mitigation," Nature Climate Change, Nature, vol. 11(5), pages 384-393, May.
    20. Skov, Iva Ridjan & Schneider, Noémi, 2022. "Incentive structures for power-to-X and e-fuel pathways for transport in EU and member states," Energy Policy, Elsevier, vol. 168(C).
    21. Mohammadi, Mohammad & Noorollahi, Younes & Mohammadi-ivatloo, Behnam & Yousefi, Hossein, 2017. "Energy hub: From a model to a concept – A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 1512-1527.
    22. Brown, T. & Schlachtberger, D. & Kies, A. & Schramm, S. & Greiner, M., 2018. "Synergies of sector coupling and transmission reinforcement in a cost-optimised, highly renewable European energy system," Energy, Elsevier, vol. 160(C), pages 720-739.
    23. Lüth, Alexandra & Werner, Yannick & Egging-Bratseth, Ruud & Kazempour, Jalal, 2022. "Electrolysis as a Flexibility Resource on Energy Islands: The Case of the North Sea," Working Papers 13-2022, Copenhagen Business School, Department of Economics.
    24. Guelpa, Elisa & Bischi, Aldo & Verda, Vittorio & Chertkov, Michael & Lund, Henrik, 2019. "Towards future infrastructures for sustainable multi-energy systems: A review," Energy, Elsevier, vol. 184(C), pages 2-21.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Osorio-Aravena, Juan Carlos & Aghahosseini, Arman & Bogdanov, Dmitrii & Caldera, Upeksha & Ghorbani, Narges & Mensah, Theophilus Nii Odai & Haas, Jannik & Muñoz-Cerón, Emilio & Breyer, Christian, 2023. "Synergies of electrical and sectoral integration: Analysing geographical multi-node scenarios with sector coupling variations for a transition towards a fully renewables-based energy system," Energy, Elsevier, vol. 279(C).
    2. Kirchem, Dana & Schill, Wolf-Peter, 2023. "Power sector effects of green hydrogen production in Germany," Energy Policy, Elsevier, vol. 182(C).
    3. Petkov, Ivalin & Gabrielli, Paolo, 2020. "Power-to-hydrogen as seasonal energy storage: an uncertainty analysis for optimal design of low-carbon multi-energy systems," Applied Energy, Elsevier, vol. 274(C).
    4. Abadie, Luis Mª & Chamorro, José M., 2023. "Investment in wind-based hydrogen production under economic and physical uncertainties," Applied Energy, Elsevier, vol. 337(C).
    5. Fridgen, Gilbert & Keller, Robert & Körner, Marc-Fabian & Schöpf, Michael, 2020. "A holistic view on sector coupling," Energy Policy, Elsevier, vol. 147(C).
    6. Stöckl, Fabian & Schill, Wolf-Peter & Zerrahn, Alexander, 2021. "Optimal supply chains and power sector benefits of green hydrogen," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 11.
    7. Lim, Dongjun & Lee, Boreum & Lee, Hyunjun & Byun, Manhee & Lim, Hankwon, 2022. "Projected cost analysis of hybrid methanol production from tri-reforming of methane integrated with various water electrolysis systems: Technical and economic assessment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 155(C).
    8. Jasmine Ramsebner & Reinhard Haas & Amela Ajanovic & Martin Wietschel, 2021. "The sector coupling concept: A critical review," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 10(4), July.
    9. Zheng, Yi & You, Shi & Bindner, Henrik W. & Münster, Marie, 2022. "Optimal day-ahead dispatch of an alkaline electrolyser system concerning thermal–electric properties and state-transitional dynamics," Applied Energy, Elsevier, vol. 307(C).
    10. Rosa, Lorenzo & Mazzotti, Marco, 2022. "Potential for hydrogen production from sustainable biomass with carbon capture and storage," Renewable and Sustainable Energy Reviews, Elsevier, vol. 157(C).
    11. McDonagh, Shane & Ahmed, Shorif & Desmond, Cian & Murphy, Jerry D, 2020. "Hydrogen from offshore wind: Investor perspective on the profitability of a hybrid system including for curtailment," Applied Energy, Elsevier, vol. 265(C).
    12. Lasemi, Mohammad Ali & Arabkoohsar, Ahmad & Hajizadeh, Amin & Mohammadi-ivatloo, Behnam, 2022. "A comprehensive review on optimization challenges of smart energy hubs under uncertainty factors," Renewable and Sustainable Energy Reviews, Elsevier, vol. 160(C).
    13. Blanco, Herib & Leaver, Jonathan & Dodds, Paul E. & Dickinson, Robert & García-Gusano, Diego & Iribarren, Diego & Lind, Arne & Wang, Changlong & Danebergs, Janis & Baumann, Martin, 2022. "A taxonomy of models for investigating hydrogen energy systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 167(C).
    14. Qi, Meng & Park, Jinwoo & Landon, Robert Stephen & Kim, Jeongdong & Liu, Yi & Moon, Il, 2022. "Continuous and flexible Renewable-Power-to-Methane via liquid CO2 energy storage: Revisiting the techno-economic potential," Renewable and Sustainable Energy Reviews, Elsevier, vol. 153(C).
    15. Abraham Castro Garcia & Shuo Cheng & Jeffrey S. Cross, 2021. "Removing the Bottleneck on Wind Power Potential to Create Liquid Fuels from Locally Available Biomass," Energies, MDPI, vol. 14(12), pages 1-12, June.
    16. Maximilian Parzen & Fabian Neumann & Addrian H. Van Der Weijde & Daniel Friedrich & Aristides Kiprakis, 2021. "Beyond cost reduction: Improving the value of energy storage in electricity systems," Papers 2101.10092, arXiv.org, revised Jul 2022.
    17. Campion, Nicolas & Nami, Hossein & Swisher, Philip R. & Vang Hendriksen, Peter & Münster, Marie, 2023. "Techno-economic assessment of green ammonia production with different wind and solar potentials," Renewable and Sustainable Energy Reviews, Elsevier, vol. 173(C).
    18. Fodstad, Marte & Crespo del Granado, Pedro & Hellemo, Lars & Knudsen, Brage Rugstad & Pisciella, Paolo & Silvast, Antti & Bordin, Chiara & Schmidt, Sarah & Straus, Julian, 2022. "Next frontiers in energy system modelling: A review on challenges and the state of the art," Renewable and Sustainable Energy Reviews, Elsevier, vol. 160(C).
    19. Qiu, Dawei & Dong, Zihang & Zhang, Xi & Wang, Yi & Strbac, Goran, 2022. "Safe reinforcement learning for real-time automatic control in a smart energy-hub," Applied Energy, Elsevier, vol. 309(C).
    20. Daniel Scamman & Baltazar Solano-Rodríguez & Steve Pye & Lai Fong Chiu & Andrew Z. P. Smith & Tiziano Gallo Cassarino & Mark Barrett & Robert Lowe, 2020. "Heat Decarbonisation Modelling Approaches in the UK: An Energy System Architecture Perspective," Energies, MDPI, vol. 13(8), pages 1-28, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:175:y:2023:i:c:s0301421523000241. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.