Sector coupling via hydrogen to lower the cost of energy system decarbonization

Abstract

There is growing interest in hydrogen (H 2 ) use for long-duration energy storage in a future electric grid dominated by variable renewable energy (VRE) resources. Modelling the role of H 2 as grid-scale energy storage, often referred as "power-to-gas-to-power (P2G2P)" overlooks the cost-sharing and emission benefits from using the deployed H 2 production and storage assets to also supply H 2 for decarbonizing other end-use sectors where direct electrification may be challenged. Here, we develop a generalized modelling framework for co-optimizing energy infrastructure investment and operation across power and transportation sectors and the supply chains of electricity and H 2 , while accounting for spatio-temporal variations in energy demand and supply. Applying this sector-coupling framework to the U.S. Northeast under a range of technology cost and carbon price scenarios, we find a greater value of power-to-H 2 (P2G) versus P2G2P routes. P2G provides flexible demand response, while the extra cost and efficiency penalties of P2G2P routes make the solution less attractive for grid balancing. The effects of sector-coupling are significant, boosting renewable energy generation by 12-55% with both increased capacities and reduced curtailments and reducing the total system cost (or levelized costs of energy) by 6-14% under 96% decarbonization scenarios. Both the cost savings and emission reductions from sector coupling increase with H 2 demand for other end-uses, more than doubling for a 96% decarbonization scenario as H 2 demand quadraples. Moreover, we found that the deployment of carbon capture and storage is more cost-effective in the H 2 sector because of the lower cost and higher utilization rate. These findings highlight the importance of using an integrated multi-sector energy system framework with multiple energy vectors in planning energy system decarbonization pathways.