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

Chunzi Qu (), Rasmus Noss Bang (), Leif Sandal () and Stein Ivar Steinshamn
Additional contact information
Chunzi Qu: Dept. of Business and Management Science, Norwegian School of Economics, Postal: NHH , Department of Business and Management Science, Helleveien 30, N-5045 Bergen, Norway, https://www.nhh.no/en/employees/faculty/chunzi-qu/
Rasmus Noss Bang: SNF - Centre for Applied Research at NHH, Postal: SNF - Centre for Applied Research at NHH, Helleveien 30, N-5045 Bergen, Norway, https://snf.no/en/personnel/rasmus-noss-bang/

No 2025/1, Discussion Papers from Norwegian School of Economics, Department of Business and Management Science

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.

Keywords: European energy system; Hydrogen storage; Optimization model; Storage capacity expansion (search for similar items in EconPapers)
JEL-codes: Q40 Q50 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2025-01-13
New Economics Papers: this item is included in nep-ene and nep-env
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