Economic Optimization of the Hydrogen Demand in a Hard-to-Abate Industrial Sector

Hydrogen is a zero-emission fuel that, if produced from renewable sources (so-called green hydrogen), can provide a significant contribution in the decarbonization of several sectors. The main drawback that still hinders its deployment is its high cost, as well as critical operational issues related to the entire supply chain, both for safety and efficiency reasons. Incentives and certification schemes are needed to support the green hydrogen. In this paper, with the aim to identify the green hydrogen supply chain and associated costs, an energy hub with electricity and hydrogen demands has been studied comparing the centralized green hydrogen production and distribution via trucks, against the installation of an on-site green hydrogen production plant made up of renewable power generation, an electricity storage system, and an electrolyzer. The problem was modeled and solved as a MILP optimization in MATLAB environment. Furthermore, a sensitivity analysis on the cost was carried out, which showed that even if the truck transportation cost for hydrogen is set at 0 a/kg, it is still more cost-effective to install an on-site electrolyzer to produce the required hydrogen.