Portfolio Effects in Green Hydrogen Production Under Temporal Matching Requirements

M. Nieves Casas Ferrús (), Oliver Ruhnau () and Reinhard Madlener
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M. Nieves Casas Ferrús: RWTH Aachen university
Oliver Ruhnau: Faculty of Economics and Institute of Energy Economics University of Cologne

No 18/2023, FCN Working Papers from E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)

Abstract: This article investigates temporal matching requirements for green hydrogen. While previous studies found that a more granular matching increases production costs, we focus on cost advantages under hourly matching through technological and geographical diversification. To quantify the resulting portfolio effects, we further develop and apply a linear cost-optimization model. We identify two types of portfolio effects, “technological” and “locational”, and quantify them for different portfolio sizes and types of electricity generation technologies. We find portfolio effects in the range of 3–7% when aggregating two locations, and up to 21% for a Germany-wide portfolio. We discuss the implications of our findings in terms of discrimination against small players and for the modeling of temporal matching requirements.

Keywords: Green hydrogen; renewable energy; portfolio effects; risk diversification (search for similar items in EconPapers)
JEL-codes: Q42 Q48 Q58 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2023-12-01
New Economics Papers: this item is included in nep-ene and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:ris:fcnwpa:2023_018

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