Flexible green hydrogen: The effect of relaxing simultaneity requirements on project design, economics, and power sector emissions

Oliver Ruhnau and Johanna Schiele

Energy Policy, 2023, vol. 182, issue C

Abstract: In many net-zero energy scenarios, electrolytic hydrogen is a key component to decarbonize hard-to-abate sectors and to provide flexibility to the power sector. In current energy systems that are not yet fully decarbonized, however, the hydrogen ramp-up raises the concern of increasing power sector emissions. To avoid such additional emissions, recent EU regulation defines requirements for electrolytic hydrogen to qualify as green along three dimensions: the additionality, the proximity, and the simultaneity of renewable electricity generation. Focusing on the temporal dimension, this article investigates the effects of a strict hourly simultaneity requirement, full temporal flexibility, as well as simultaneity exemptions in the current EU regulation. We develop a model of a renewables-hydrogen project, consisting of individual wind turbines, solar panels, hydrogen electrolysis, and hydrogen storage. As a novelty, the model optimizes not only dispatch but also investment decisions, and we expose it to different regulatory conditions. We show that a flexible definition of green hydrogen does not necessarily increase power sector emissions. By contrast, requiring hourly simultaneity implies that rational investors build much larger wind turbines, hydrogen electrolyzers, and hydrogen storage than needed—meaning additional costs and embedded carbon, underutilized assets, and a potential slow-down of green hydrogen deployment. These adverse effects can only partially be mitigated by including solar panels and by the EU simultaneity exceptions. We argue that current energy transition trends further lower the risk of increasing power sector emissions under a flexible definition of green hydrogen and recommend this as the way forward for a sustainable hydrogen policy.

Keywords: Green hydrogen; Renewable energy; Flexible electricity demand; Carbon emissions (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:182:y:2023:i:c:s0301421523003488

DOI: 10.1016/j.enpol.2023.113763

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