Optimal Design and Dispatch of Hydrogen Systems Inegrated in Combined Heat and Power Plants for Improving Hydrogen Economy through Excess Heat and Electricity Grid Services

Renewable hydrogen is a promising energy carrier that facilitates greater renewable energy integration while supporting the decarbonization of the industrial and transportation sectors. This study investigates the optimal design and operation of two hydrogen-based energy systems. The first energy system comprises an electrolyser, compressor, and hydrogen storage system. It aims to supply hydrogen as a drop-in fuel for a future potential hydrogen fleet. The electrolyser provides excess heat and oxygen for a combined heat and power (CHP) plantand ancillary services to the grid for frequency support. In the second energy system, the hydrogen stored in the hydrogen tank is used by a fuel cell or gas turbine to sell electricity to the grid following price signals. The optimisation algorithm developed in this study finds the optimal capacities for the hydrogen production and storage systems and optimizes the hourly dispatch of the electrolyser. The profitability of the first investigated hydrogen-based energy system is closely connected to the hydrogen production cost, which fluctuates depending on the average electricity price. The profitability is also affected by the average compensation of the ancillary services and, to a lesser extent, by the value of excess heat and oxygen produced during the electrolysis. Only 2020, marked out by the lowest average electricity price among the investigated years, could lead to a profitable investment for the first studied energy system. The breakeven hydrogen selling price varied between 24.13 SEK/kg in 2020 to 65.63 SEK/kg in 2022 while considering the extra revenues of the grid service compensation and heat and oxygen sale. If only hydrogen sale was considered, the breakeven hydrogen selling prices varied between 31.28 SEK/kg in 2020 to 86.08 SEK/kg in 2022. For the second investigated hydrogen-based energy system, if the threshold electricity price for activating the hydrogen consumption system is the 90th percentile of the electricity prices every week, the profitability is never attained. The fuel cell system leads to lower electrolyser and hydrogen tank capacities to meet the targeted power supply, given the higher assumed efficiency as compared to the gas turbine. Nevertheless, the fuel cell system shows in all the investigated subcases lower net present values as compared to the gas turbine subcases due to the higher investment and running costs. The fuel cell system shows better performances in terms of net present values than the gas turbine only in an optimistic sub case marked out by higher conversion efficiencies and lower investment and running costs for the fuel cell. The profitability of the second investigated hydrogen-based energy system is guaranteed only at an annual average electricity price above 2.7 SEK/kWh.