The cost of green hydrogen could be significantly reduced – with a combination of different renewable energy sources and locations. This is shown by EWI researcher Jun.-Prof. Dr. Oliver Ruhnau as co-author in a new article on the costs of producing green hydrogen. The article examines how green hydrogen, produced through electrolysis powered by renewable electricity, can benefit from a diverse portfolio of renewable energy generators. Such a portfolio, combining renewable generators of multiple locations and technologies, allows for a smoother electricity generation profile, which could help achieve compliance with strict emerging regulatory standards at lower costs.
The article is relevant against the background of EU’s ambitious goals for the ramp-up of green hydrogen production and its strict rules for hydrogen to qualify as green. One of these requirements is the hourly temporal matching between the production of hydrogen and renewable electricity. The new article demonstrates that this temporal matching requirement can be more easily fulfilled with technologically and regionally diverse combinations of renewable generators. Ruhnau and his co-authors estimate that combining two locations within Germany, can already yield cost savings in the range of 3–8 percent, and that cost savings may increase up to 21 percent for a nationwide portfolio.
“Our research shows that a diversified portfolio is economically advantageous for producing green hydrogen under strict matching requirements,” said EWI researcher Ruhnau. “This is relevant for investors to minimize the costs of green hydrogen production but also for policy makers to understand the implications of strict matching requirements. In particular, the question arises as to whether large firms gain a competitive advantage through temporal requirements through having easier access to larger generation portfolios.”
The new scientific article, titled “Portfolio Effects in Green Hydrogen Production Under Temporal Matching Requirements,” was recently published in Energy Strategy Reviews and is freely available at https://doi.org/10.1016/j.esr.2024.101580. Other authors include: Nieves Casas Ferrús, formerly Research Associate at the University of Cologne and Reinhard Madlener, professor at the RWTH Aachen University.
