Evaluating the Economic Impact of Using Curtailed Renewable Energy Sources for Green Hydrogen Production

Renewable energy investments has led to problem like oversupply of energy due to unavailability of large-scale energy storage options and intermittent nature of renewable energy. The excess energy can be harnessed into more profitable means such as hydrogen. In this study, hydrogen production via alkaline water electrolyser (AWE) powered by curtailed renewable energy is evaluated based on hourly curtailment data for California renewable energy curtailment for the year 2020. Dynamic optimization is adopted to solve the mixed-integer linear programming (MILP) problem to maximize the profits. The results show that implementing 100% availability of solar curtailment in hydrogen production for California would result in the highest profit and would be the fastest to achieve payback. From sensitivity analysis it was observed that the technology costs were the most sensitive parameters and may reduce capital expenditures in the near future and generate more profit. Further, given large solar installation capacity, solar curtailment dominates wind curtailment, making the exploitation of curtailed wind alone unprofitable. Overall, the study provides an outlook from both operator’s and investor’s perspectives in which the curtailed energy could be effectively utilized and converted into profit rather than a waste.