Techno-economic model for evaluating the economic feasibility of green hydrogen production within an electrical storage and grid-connected system

Abstract

The transition to a low-carbon energy system has increased interest in green hydrogen as a sustainable energy carrier. This thesis presents a comprehensive techno-economic model designed to assess the economic feasibility of green hydrogen production within an RES integrated system that includes electrical storage and grid connectivity.

The model takes into account real-time electricity market dynamics, variability in renewable energy sources (RES), and interactions among system components such as the electrolyser, battery, RES assets, and the grid. Using a mixed-integer linear programming (MILP) approach, optimal dispatch schedules are derived to minimise costs and maximise revenues from hydrogen production and participation in the energy market for a given system configuration.

A large number of simulations are conducted with varying system configurations to create a landscape of hydrogen generation prices. The case studies, which apply real-world data, indicate that under current market conditions, green hydrogen does not achieve parity with conventional grey hydrogen. Additionally, the inclusion of electrical storage appears to negatively affect profitability.

Key parameters, such as electricity prices, capital expenditures (CAPEX), and local factors, critically influence the viability of green hydrogen projects. Furthermore, maintaining a high capacity factor for the electrolyser depends significantly on grid connection. The findings conclude that, to make green hydrogen generation profitable with on-site assets, it is necessary to oversize RES assets and ensure that grid charges and power prices are favourable. While high variability in power prices may benefit arbitrage opportunities, it currently does not sufficiently offset the capital costs associated with electrical storage.