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Optimal supply chains and power sector benefits of green hydrogen.

ABSTRACT: Green hydrogen can help to decarbonize parts of the transportation sector, but its power sector interactions are not well understood so far. It may contribute to integrating variable renewable energy sources if production is sufficiently flexible in time. Using an open-source co-optimization model of the power sector and four options for supplying hydrogen at German filling stations, we find a trade-off between energy efficiency and temporal flexibility. For lower shares of renewables and hydrogen, more energy-efficient and less flexible small-scale on-site electrolysis is optimal. For higher shares of renewables and/or hydrogen, more flexible but less energy-efficient large-scale hydrogen supply chains gain importance, as they allow to temporally disentangle hydrogen production from demand via storage. Liquid hydrogen emerges as particularly beneficial, followed by liquid organic hydrogen carriers and gaseous hydrogen. Large-scale hydrogen supply chains can deliver substantial power sector benefits, mainly through reduced renewable curtailment. Energy modelers and system planners should consider the distinct flexibility characteristics of hydrogen supply chains in more detail when assessing the role of green hydrogen in future energy transition scenarios. We also propose two alternative cost and emission metrics which could be useful in future analyses.

SUBMITTER: Stockl F

PROVIDER: S-EPMC8271012 | biostudies-literature |

REPOSITORIES: biostudies-literature

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Project description:With the wider recognition of the concept of environmental protection and sustainable development, more and more manufacturers have begun to implement green manufacturing strategies. However, green development is a gradual process, and the coexistence of ordinary and green products is common. This paper examines the competition between ordinary products and green ones based on supply chains, and discusses the impact of retailers' horizontal cooperation on pricing, greenness, market demand, profit, and other related decisions and results. Model solutions and numerical experiments have shown that consumers' green preference (CGP) has a positive impact on the results of green products and negative effects on those of ordinary ones; however, the impact of competition intensity (CI) is more complex, and the trend tends to change if it exceeds a certain critical value. In general, cooperation encourages retailers to raise prices and make manufacturers lower wholesale prices, but the retail and wholesale prices of green products are always higher than the corresponding prices of ordinary ones. Market demand can be reduced due to cooperation, but it is conducive to strengthening green products' greenness. However, if CI exceeds a certain threshold, the greenness will be weakened by cooperation. Both retailers can benefit from cooperation easily and they always reach a win-win situation, but manufacturers suffer badly as a result. Nevertheless, when CI is weak, cooperation will bring a greater profit improvement to the whole chain of ordinary products; in this case, if a retailer is willing to compensate for a manufacturer's profit loss and help it benefit from cooperation, the manufacturer will encourage the retailer to cooperate horizontally with the green retailer, but the green chain will be seriously damaged. When CI is strong, the greenness of green products is not obvious enough, and cooperation can bring some chances to achieve a win-win situation for two chains; if the green retailer can obtain a larger share from cooperation under this scenario, it can also enable its manufacturer to obtain compensation and change the profit increment from negative to positive. From an overall perspective, when CI is very weak or very strong, horizontal cooperation is conducive to improving the profit of the entire supply chain competition system, but when CI is relatively flat, independent operation for each chain is more advantageous; if the competition status is stable and unchanged, independent competition will be superior to horizontal cooperation.

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Optimal supply chains and power sector benefits of green hydrogen.

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