Assessing the potential of hydrogen energy storage in a stand-alone electricity grid : applying mathematical programming to balance electricity production and consumption : a case study on the Faroe Islands

Abstract

The increasing adaption of renewable energy sources (RES), with intermittent and nondispatchable production output, requires an increased effort to continuously balance supply to meet demand in electricity grids. Failing to establish this balance can lead to blackouts. Energy storage technologies can be applied to increase the utilization of RES and maintain a balanced grid. This is especially relevant for stand-alone systems that are unable to import or export electricity. A technology showing great potential in resolving this issue is the production and storage of hydrogen gas (Power-to-Hydrogen, PtH2) utilizing excess electricity. This thesis seeks to answer what combinations of production and storage technologies in a stand-alone, multi-energy system (MES), make PtH2 a cost-effective option to balance production and demand. To do this, a mixed integer linear programming model (MILP) is developed and applied to a case study on the Faroe Islands. The model objective is defined to minimize lifetime costs of acquiring, installing and operating the system components while continuously satisfying demand. The model optimizes the system based on one year of input data with hourly resolution. Through six distinct scenarios, each containing different combinations of technologies, we create hypothetical environments with unique characteristics to uncover when PtH2 is a costeffective method of balancing a stand-alone grid. Three sensitivity analyses are conducted to asses how the cost-effectiveness of PtH2 is affected by shifting production towards RES. The results show that PtH2 can be a cost-effective technology, significantly contributing to reduced lifetime costs of a stand-alone energy system. However, some prerequisites are needed for this to be the case. Specifically, PtH2 is cost-effective when large hydro power capacities are unavailable and there is a focus on shifting production from diesel generators towards renewable production. In cases where large capacities in hydro power or diesel generation is available, PtH2 does not prove to reduce total costs of the system. Keywords – Power-to-Hydrogen, Multi-Energy System, Grid-Balancing, Renewable Energy Sources, Energy Storage, Optimization, Mathematical Programming, MILP