On capital utilization in the hydrogen economy: The quest to minimize idle capacity in renewables-rich energy systems

Schalk Cloete, Oliver Ruhnau and Lion Hirth ()

EconStor Preprints from ZBW - Leibniz Information Centre for Economics

Abstract: The hydrogen economy is currently experiencing a surge in attention, partly due to the possibility of absorbing wind and solar energy production peaks through electrolysis. A fundamental challenge with this approach is low utilization rates of various parts of the integrated electricity-hydrogen system. To assess the importance of capacity utilization, this paper introduces a novel stylized numerical energy system model incorporating the major elements of electricity and hydrogen generation, transmission and storage, including both "green" hydrogen from electrolysis and "blue" hydrogen from natural gas reforming with CO2 capture and storage (CCS). Balancing renewables with electrolysis results in low utilization of electrolyzers, hydrogen pipelines and storage infrastructure, or electricity transmission networks, depending on whether electrolyzers are co-located with wind farms or demand centers. Blue hydrogen scenarios face similar constraints. High renewable shares impose low utilization rates of CO2 capture, transport and storage infrastructure for conventional CCS, and of hydrogen transmission and storage infrastructure for a novel process (gas switching reforming) that enables flexible power and hydrogen production. In conclusion, both green and blue hydrogen can facilitate the integration of wind and solar energy, but the cost related to low capacity utilization erodes much of the expected economic benefit.

Keywords: Hydrogen economy; Energy system model; Decarbonization; CO2 capture and storage; Variable renewable energy (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
Note: Please cite as: Cloete, Schalk, Oliver Ruhnau & Lion Hirth (2020): “On capital utilization in the hydrogen economy: The quest to minimize idle capacity in renewables-rich energy systems”, International Journal of Hydrogen Energy, https://doi.org/10.1016/j.ijhydene.2020.09.197
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Citations: View citations in EconPapers (7)

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