Modelling Decentralized Hydrogen Systems: Lessons Learned and Challenges from German Regions

Abstract

Green hydrogen produced by power-to-gas will play a major role in the defossilization of the energy system as it offers both carbon-neutral chemical energy and the chance to provide flexibility. This paper provides an extensive analysis of hydrogen production in decentralized energy systems, as well as possible operation modes (H2 generation or system flexibility). Modelling was realized for municipalities—the lowest administrative unit in Germany, thus providing high spatial resolution—in the linear optimization framework OEMOF. The results allowed for a detailed regional analysis of the specific operating modes and were analyzed using full-load hours, share of used negative residual load, installed capacity and levelized cost of hydrogen to derive the operation mode of power-to-gas to produce hydrogen. The results show that power-to-gas is mainly characterized by constant hydrogen production and rarely provides flexibility to the system. Main drivers of this dominant operation mode include future demand for hydrogen and the fact that high full-load hours reduce hydrogen-production costs. However, changes in the regulatory, market and technical framework could promote more flexibility and support possible use cases for the central technology to succeed in the energy transition.

Model Supported Business Case Scenario Analysis for Decentral Hydrogen Conversion, Storage and Consumption within Energy Hubs

“…Hydrogen storage is a promising option suitable for long-term seasonal storage of excess power generated by variable renewable energy sources, as explained in [19]. The surplus power is converted to hydrogen as an energy carrier, which can be further converted to methane, methanol or other synthetic fuels.…”

Towards a Theory of Local Energy Transition

“…Nevertheless, using Germany as an example, many business models may not be viable under current market conditions. Jarosch et al [108] found that the price of hydrogen needs to be sufficiently high and changes in electricity price components, such as more flexible grid-usage fees, must be realized. Other forms of long-term energy storage may be taken into consideration, depending on their location.…”