IDEAS home Printed from https://ideas.repec.org/p/zbw/esprep/258999.html
   My bibliography  Save this paper

Flexible green hydrogen: Economic benefits without increasing power sector emissions

Author

Listed:
  • Ruhnau, Oliver
  • Schiele, Johanna

Abstract

Electrolytic hydrogen complements renewable energy in many net-zero energy scenarios. In these long-term scenarios with full decarbonization, the “greenness” of hydrogen is without question. In current energy systems, however, the ramp-up of hydrogen production may cause additional emissions. To avoid this potential adverse effect, recently proposed EU regulation defines strict requirements for electrolytic hydrogen to qualify as green: electrolyzers must run on additional renewable generation, which is produced in a temporally and geographically congruent manner. Focusing on the temporal dimension, this paper argues in favor of a more flexible definition of green hydrogen, which keeps the additionality criterion on a yearly basis but allows for dispatch optimization on a market basis within that period. We develop a model that optimizes dispatch and investment of a wind-hydrogen system—including wind turbines, hydrogen electrolysis, and hydrogen storage—and apply the model to a German case study based on data from 2017-2021. Contrasting different regulatory conditions, we show that a flexible definition of green hydrogen can reduce costs without additional power sector emissions. By contrast, requiring simultaneity implies that a rational investor would build a much larger wind turbine, hydrogen electrolyzer, and hydrogen storage than needed. This leads to additional costs, underutilized resources, and a potential slow-down of green hydrogen deployment. We discuss that current trends in the energy transition are likely to amplify the economic and environmental benefits of a flexible definition of green hydrogen and recommend this as the way forward for a sustainable hydrogen policy.

Suggested Citation

  • Ruhnau, Oliver & Schiele, Johanna, 2022. "Flexible green hydrogen: Economic benefits without increasing power sector emissions," EconStor Preprints 258999, ZBW - Leibniz Information Centre for Economics.
  • Handle: RePEc:zbw:esprep:258999
    Note: Please cite as: Ruhnau, O., Schiele, J. (2023): "Flexible green hydrogen: The effect of relaxing simultaneity requirements on project design, economics, and power sector emissions", Energy Policy, https://doi.org/10.1016/j.enpol.2023.113763
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/258999/1/Ruhnau%20and%20Schiele%202022.%20Flexible%20green%20hydrogen.%20Working%20Paper.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gunther Glenk & Stefan Reichelstein, 2019. "Publisher Correction: Economics of converting renewable power to hydrogen," Nature Energy, Nature, vol. 4(4), pages 347-347, April.
    2. Blanco, Herib & Nijs, Wouter & Ruf, Johannes & Faaij, André, 2018. "Potential for hydrogen and Power-to-Liquid in a low-carbon EU energy system using cost optimization," Applied Energy, Elsevier, vol. 232(C), pages 617-639.
    3. Ruhnau, Oliver, 2022. "How flexible electricity demand stabilizes wind and solar market values: The case of hydrogen electrolyzers," Applied Energy, Elsevier, vol. 307(C).
    4. Stiewe, Clemens & Ruhnau, Oliver & Hirth, Lion, 2022. "European industry responds to high energy prices: The case of German ammonia production," EconStor Preprints 253251, ZBW - Leibniz Information Centre for Economics.
    5. Gunther Glenk & Stefan Reichelstein, 2019. "Economics of converting renewable power to hydrogen," Nature Energy, Nature, vol. 4(3), pages 216-222, March.
    6. Schlund, David & Theile, Philipp, 2022. "Simultaneity of green energy and hydrogen production: Analysing the dispatch of a grid-connected electrolyser," Energy Policy, Elsevier, vol. 166(C).
    7. 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.
    8. Blanco, Herib & Nijs, Wouter & Ruf, Johannes & Faaij, André, 2018. "Potential of Power-to-Methane in the EU energy transition to a low carbon system using cost optimization," Applied Energy, Elsevier, vol. 232(C), pages 323-340.
    9. Fleschutz, Markus & Bohlayer, Markus & Braun, Marco & Henze, Gregor & Murphy, Michael D., 2021. "The effect of price-based demand response on carbon emissions in European electricity markets: The importance of adequate carbon prices," Applied Energy, Elsevier, vol. 295(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bucksteeg, Michael & Mikurda, Jennifer & Weber, Christoph, 2023. "Integration of power-to-gas into electricity markets during the ramp-up phase—Assessing the role of carbon pricing," Energy Economics, Elsevier, vol. 124(C).
    2. Langenmayr, Uwe & Ruppert, Manuel, 2023. "Renewable origin, additionality, temporal and geographical correlation – eFuels production in Germany under the RED II regime," Energy Policy, Elsevier, vol. 183(C).

    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. Ruhnau, Oliver & Schiele, Johanna, 2023. "Flexible green hydrogen: The effect of relaxing simultaneity requirements on project design, economics, and power sector emissions," Energy Policy, Elsevier, vol. 182(C).
    2. Ruhnau, Oliver & Schiele, Johanna, 2022. "Flexible green hydrogen: Economic benefits without increasing emissions," EconStor Preprints 253267, ZBW - Leibniz Information Centre for Economics.
    3. Bucksteeg, Michael & Mikurda, Jennifer & Weber, Christoph, 2023. "Integration of power-to-gas into electricity markets during the ramp-up phase—Assessing the role of carbon pricing," Energy Economics, Elsevier, vol. 124(C).
    4. Schlund, David & Theile, Philipp, 2021. "Simultaneity of green energy and hydrogen production: Analysing the dispatch of a grid-connected electrolyser," EWI Working Papers 2021-10, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    5. Schlund, David & Theile, Philipp, 2022. "Simultaneity of green energy and hydrogen production: Analysing the dispatch of a grid-connected electrolyser," Energy Policy, Elsevier, vol. 166(C).
    6. Kirchem, Dana & Schill, Wolf-Peter, 2023. "Power sector effects of green hydrogen production in Germany," Energy Policy, Elsevier, vol. 182(C).
    7. 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).
    8. Abadie, Luis Mª & Chamorro, José M., 2023. "Investment in wind-based hydrogen production under economic and physical uncertainties," Applied Energy, Elsevier, vol. 337(C).
    9. 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).
    10. Millinger, M. & Reichenberg, L. & Hedenus, F. & Berndes, G. & Zeyen, E. & Brown, T., 2022. "Are biofuel mandates cost-effective? - An analysis of transport fuels and biomass usage to achieve emissions targets in the European energy system," Applied Energy, Elsevier, vol. 326(C).
    11. Langenmayr, Uwe & Ruppert, Manuel, 2023. "Renewable origin, additionality, temporal and geographical correlation – eFuels production in Germany under the RED II regime," Energy Policy, Elsevier, vol. 183(C).
    12. Bucksteeg, Michael & Mikurda, Jennifer & Weber, Christoph, 2021. "Market integration of power-to-gas during the energy transition—Assessing the role of carbon pricing," EconStor Preprints 242982, ZBW - Leibniz Information Centre for Economics.
    13. Bogdanov, Dmitrii & Toktarova, Alla & Breyer, Christian, 2019. "Transition towards 100% renewable power and heat supply for energy intensive economies and severe continental climate conditions: Case for Kazakhstan," Applied Energy, Elsevier, vol. 253(C), pages 1-1.
    14. Barbara Uliasz-Misiak & Joanna Lewandowska-Śmierzchalska & Rafał Matuła & Radosław Tarkowski, 2022. "Prospects for the Implementation of Underground Hydrogen Storage in the EU," Energies, MDPI, vol. 15(24), pages 1-17, December.
    15. Jafri, Yawer & Wetterlund, Elisabeth & Mesfun, Sennai & Rådberg, Henrik & Mossberg, Johanna & Hulteberg, Christian & Furusjö, Erik, 2020. "Combining expansion in pulp capacity with production of sustainable biofuels – Techno-economic and greenhouse gas emissions assessment of drop-in fuels from black liquor part-streams," Applied Energy, Elsevier, vol. 279(C).
    16. Shaojie Song & Haiyang Lin & Peter Sherman & Xi Yang & Chris P. Nielsen & Xinyu Chen & Michael B. McElroy, 2021. "Production of hydrogen from offshore wind in China and cost-competitive supply to Japan," Nature Communications, Nature, vol. 12(1), pages 1-8, December.
    17. Ringkjøb, Hans-Kristian & Haugan, Peter M. & Nybø, Astrid, 2020. "Transitioning remote Arctic settlements to renewable energy systems – A modelling study of Longyearbyen, Svalbard," Applied Energy, Elsevier, vol. 258(C).
    18. Cassetti, Gabriele & Boitier, Baptiste & Elia, Alessia & Le Mouël, Pierre & Gargiulo, Maurizio & Zagamé, Paul & Nikas, Alexandros & Koasidis, Konstantinos & Doukas, Haris & Chiodi, Alessandro, 2023. "The interplay among COVID-19 economic recovery, behavioural changes, and the European Green Deal: An energy-economic modelling perspective," Energy, Elsevier, vol. 263(PC).
    19. Ortega, Margarita & Río, Pablo del & Ruiz, Pablo & Nijs, Wouter & Politis, Savvas, 2020. "Analysing the influence of trade, technology learning and policy on the employment prospects of wind and solar energy deployment: The EU case," Renewable and Sustainable Energy Reviews, Elsevier, vol. 122(C).
    20. Chauvy, Remi & Dubois, Lionel & Lybaert, Paul & Thomas, Diane & De Weireld, Guy, 2020. "Production of synthetic natural gas from industrial carbon dioxide," Applied Energy, Elsevier, vol. 260(C).

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:zbw:esprep:258999. 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zbwkide.html .

    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.