The effects of electricity tariffs on cost-minimal hydrogen supply chains and their impact on electricity prices and redispatch costs

Abstract

Hydrogen fueled transportation can contribute substantially to the reduction of global carbon emissions. However, the production of hydrogen through electrolysis creates interdependencies with electricity systems. Therefore, we present a new model which couples the hydrogen supply chain with the electricity system. We use this model to analyse a case study of Germany in 2030. We find that if efficient spatially resolved electricity tariffs are applied instead of existing uniform tariffs, electrolyzers are placed primarily at low-cost nodes and farther away from consumption centers. For hydrogen, this leads to higher transportation costs, but lower production costs, and lower total costs. Moreover, costs for congestion management decrease substantially.