"Balancing Profitability and Sustainability: Electrolysis Strategies in the evolving European Hydrogen Market - A Multi-Integer Linear Programming Approach applied to a Case Study in Germany"

11/25/2024

Green hydrogen is a crucial energy carrier for the energy transition, offering significant potential for decarbonizing various sectors. However, large-scale deployment in Europe faces challenges such as renewable electricity variability, hydrogen certification complexities, and new legislative risks. This thesis develops a techno-economic Multi-Integer Linear Programming optimization model to assess the economic viability and environmental impact of integrating electrolyser systems in Europe’s energy landscape, focusing on different operating strategies under the Renewable Energy Directive II and its Delegated Acts. The study contrasts four scenarios: static operation with grid mix-based electricity, static operation with 24/7 Carbon- Free Energy Power Purchase Agreements, flexible operation optimized for Day-Ahead Market prices, and flexible operation with revenue stacking from hydrogen sales and ancillary services. The model is successfully applied through application to a case study for electrolysis in Germany. Findings reveal an inverse relationship between profitability (Net Present Value, Internal Rate of Return, Return On Investment, Levelized Cost of Hydrogen) and sustainability (Levelized CO2 emission Intensity of Hydrogen) across scenarios. Sensitivity analysis shows that economic and environmental outcomes are influenced by system boundaries, which can be targeted by policymakers and industry stakeholders to enhance project viability. This work provides insights into the effects of European legislation on electrolyser project profitability and carbon emissions, offering guidance for stakeholders in the evolving hydrogen market. The study supports the advancement of the hydrogen economy through optimized electrolysis strategies that balance profitability and sustainability.

Authors in the community:

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  P

  Philipp Kristian Eisele

  ist1109213

Supervisors of this institution:

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  R

  Rui Manuel Gameiro de Castro

  ist12375

mechanical-engineering - Mechanical engineering

por - Portuguese

Instituto Superior Técnico