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Hydrogen in Renewable-Intensive Energy Systems: Path to Becoming a Cost-Effective and Efficient Storage Solution

Author

Listed:
  • Qu, Chunzi

    (Dept. of Business and Management Science, Norwegian School of Economics)

  • Bang, Rasmus Noss

    (SNF - Centre for Applied Research at NHH)

  • Sandal, Leif K.

    (Dept. of Business and Management Science, Norwegian School of Economics)

  • Steinshamn, Stein Ivar

    (Dept. of Business and Management Science, Norwegian School of Economics)

Abstract

This paper examines the integration of hydrogen storage in renewable-intensive energy sys tems. Current hydrogen storage technology is too costly and inefficient, but reducing hydrogen costs to 12.5% of current levels and increasing round-trip efficiency to 70% could make it com petitive. These are challenging targets but feasible given positive predictions on cost reduction and efficiency attainability currently. Hydrogen storage reduces total energy system costs by partly replacing lithium batteries to lower storage costs, due to its suitability for long-term storage, while increasing grid flexibility to lower transmission costs. Moreover, integrating hydrogen can decrease the share of nuclear and fossil fuels in the generation mix, reducing generation costs. Italy and Germany are identified as primary targets for hydrogen expansion in Europe. In scenarios of limited lithium supply, hydrogen becomes more competitive and essential to compensate for system storage capacity shortages, though it may not reduce total system costs.

Suggested Citation

  • Qu, Chunzi & Bang, Rasmus Noss & Sandal, Leif K. & Steinshamn, Stein Ivar, 2025. "Hydrogen in Renewable-Intensive Energy Systems: Path to Becoming a Cost-Effective and Efficient Storage Solution," Discussion Papers 2025/1, Norwegian School of Economics, Department of Business and Management Science.
    • Handle: RePEc:hhs:nhhfms:2025_001
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    References listed on IDEAS

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    More about this item

    Keywords

    European energy system; Hydrogen storage; Optimization model; Storage capacity expansion;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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