Abstract
This study performs a techno-economic analysis of hydrogen underground storage systems for grid electricity storage, evaluating their economic viability at the plant scale using dynamic optimization. It explores the feasibility of various system configurations and revenue models in the context of volatile electricity prices and the necessity for multiple revenue streams. The hypothesis tested is that large-scale hydrogen storage, despite its low round-trip efficiency, can be economically viable with the right mix of revenue streams. This study uses scenario-based analysis to assess the impacts of different system configurations, including engaging in time-shifting arbitrage, ancillary service markets and blending hydrogen with natural gas. Results indicate potential annual net cash flows of up to $1.5 million from ancillary services integration and $5.2 million from natural gas blending, contingent on specific system sizes. The study concludes that hydrogen underground storage for grid electricity storage can be profitable, and emphasizes that proper system design and precise electricity price forecasting are crucial for optimizing system performance and economic returns. This research sets the stage for further investigations into the scalability of hydrogen storage systems and their broader implications for grid electricity storage and energy market dynamics.
| Original language | English |
|---|---|
| Article number | 119115 |
| Journal | Energy Conversion and Management |
| Volume | 322 |
| DOIs | |
| State | Published - Dec 15 2024 |
Funding
Fig. 1 illustrates the day-ahead market prices of CAISO SP15, using a 7-day rolling average to smooth out the hourly price fluctuations and more clearly reveal seasonal pricing trends. This approach offers a cleaner view compared to the more variable real hourly prices, which are shown as faint lines in the background. The data reveals significant price volatility over the three-year period, with notable peaks during summer months, a sharp increase at the end of 2022 due to the energy crisis triggered by the conflict between Russia and Ukraine, and occasional price spikes at other times. The analysis also highlights weekly patterns in electricity prices, typically showing lower prices over weekends and higher prices mid-week. Hourly price trends reveal the characteristic \u201Cduck curve\u201D, largely influenced by solar power production and shifts in demand tied to daily human activities. Over the three years, the range of electricity prices is broad, with 2022 displaying extreme variability from negative prices to peaks exceeding $400/MWh. This visualization underscores the inherent volatility and trends within the grid electricity pricing, indicating the potential for profitability through HUS, particularly via time-shift arbitrage. This strategy involves purchasing electricity at low prices and selling it at higher prices, allowing for profit generation from the price differential. This work was supported by Utah Governor\u2019s Office of Energy Development [grant number 171881]; U.S. Department of Energy [grant number DE-EE0009708].
| Funders | Funder number |
|---|---|
| Russia and Ukraine | |
| Utah Office of Energy Development | 171881 |
| U.S. Department of Energy | DE-EE0009708 |
Keywords
- Dynamic optimization
- Electrolyzer
- Grid electricity storage
- Hydrogen underground storage
- Seasonal energy storage
- Techno-economic analysis
