Complying with low-emission hydrogen standards in long-term integrated supply chains

Abstract

Renewable hydrogen is a promising alternative to increase the presence of renewable energy in hard-to-decarbonize economic sectors. Renewable-fuel regulation standards have been formalizing to ensure that on-grid electrolytic production is primarily powered by renewable electricity. This work evaluates the mid- and long-term impact of integrating renewable hydrogen supply chains into the expansion and operation of the power system using a tailored modification of the open-source energy modeling system (OSeMOSYS). The model optimizes the joint expansion of the Chilean power system and a hydrogen supply chain for exports, between 2025 and 2060, under the European standard for renewable hydrogen. Results show that incorporating renewable hydrogen supply chains that comply with this standard impacts the infrastructure and operation of the power system during its transition towards decarbonization. Between 2025 and 2040, the off-grid hydrogen production scenario results in distributed production, requiring internal hydrogen transport and low grid reliance. Conversely, a scenario that assumes Power Purchase Agreements for renewable electricity results in centralized hydrogen production, with higher electricity transmission investments and grid reliance. For the scenarios studied, the average systemic cost of hydrogen production ranges from $2.9/kgH₂ to $6.4/kgH₂.