A local electricity-hydrogen market model for industrial parks

Abstract

Hydrogen is called to play a vital role in the decarbonization of the energy sector. Its importance is notable for industries, where it finds multiple applications, but also for electricity generation through fuel-cells. Due to the existence of mature conversion technologies, the electricity‑hydrogen nexus is expected to be frequently present in the future for multiple applications. In this sense, it is very important to develop computational tools that consider both energy vectors and their links. Following this idea, this paper develops a local electricity‑hydrogen market model for industrial parks. The new model is suitable for systems with a notable presence of hydrogen consumers and on-site hydrogen generation through water electrolysis. The proposed market framework is capable to jointly reveal local electricity and hydrogen prices without ignoring the strong physical and financial interactions between systems. The mathematical notation arises from Stackelberg-based models for the electricity and hydrogen pricing sub-problems, which are solved iteratively until reaching convergence, thus resulting in a holistic optimization framework solvable by average machines. A case study is presented with results, which serve to validate the new tool as well as analyse several important aspects such as the role of fuel-cells or local renewable generation. Moreover, the results obtained allows us to show how both sub-systems are capable to cooperate seeking the collective welfare, thus augmenting the possibilities and flexibility of the whole system.Hydrogen is called to play a vital role in the decarbonization of the energy sector. Its importance is notable for industries, where it finds multiple applications, but also for electricity generation through fuel-cells. Due to the existence of mature conversion technologies, the electricity‑hydrogen nexus is expected to be frequently present in the future for multiple applications. In this sense, it is very important to develop computational tools that consider both energy vectors and their links. Following this idea, this paper develops a local electricity‑hydrogen market model for industrial parks. The new model is suitable for systems with a notable presence of hydrogen consumers and on-site hydrogen generation through water electrolysis. The proposed market framework is capable to jointly reveal local electricity and hydrogen prices without ignoring the strong physical and financial interactions between systems. The mathematical notation arises from Stackelberg-based models for the electricity and hydrogen pricing sub-problems, which are solved iteratively until reaching convergence, thus resulting in a holistic optimization framework solvable by average machines. A case study is presented with results, which serve to validate the new tool as well as analyse several important aspects such as the role of fuel-cells or local renewable generation. Moreover, the results obtained allows us to show how both sub-systems are capable to cooperate seeking the collective welfare, thus augmenting the possibilities and flexibility of the whole system.