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

There is growing interest in using hydrogen (H-2) as a long-duration energy storage resource in a future electric grid dominated by variable renewable energy (VRE) generation. Modeling H-2 use exclusively for grid-scale energy storage, often referred to as power-to-gas-to-power (P2G2P), overlooks the cost-sharing and CO2 emission benefits from using the deployed H-2 assets to decarbonize other end-use sectors where direct electrification is challenging. Here, we develop a generalized framework for co-optimizing infrastructure investments across the electricity and H-2 supply chains, accounting for the spatio-temporal variations in energy demand and supply. We apply this sector-coupling framework to the U.S. Northeast under a range of technology cost and carbon price scenarios and find greater value of power-to-H-2 (P2G) vs. P2G2P routes. Specifically, P2G provides grid flexibility to support VRE integration without the round-trip efficiency penalty and additional cost incurred by P2G2P routes. This form of sector coupling leads to: (a) VRE generation increase by 13-56%, and (b) total system cost (and levelized costs of energy) reduction by 7-16% under deep decarbonization scenarios. Both effects increase as H-2 demand for other end-uses increases, more than doubling for a 97% decarbonization scenario as H-2 demand quadruples. We also find that the grid flexibility enabled by sector coupling makes deployment of carbon capture and storage (CCS) for power generation less cost-effective than its use for low-carbon H-2 production. These findings highlight the importance of using an integrated energy system framework with multiple energy vectors in planning cost-effective energy system decarbonization.

Automated summary

The study highlights the importance of utilizing hydrogen as a long-duration energy storage resource in optimizing the electric grid, particularly in reducing carbon emissions and achieving cost-effectiveness, showing that the shift from power-to-H-2 (P2G) to power-to-gas-to-power (P2G2P) routes may generate greater value.