8 research outputs found
The effects of electricity tariffs on cost-minimal hydrogen supply chains and their impact on electricity prices and redispatch costs
Hydrogen fueled transportation can contribute substantially to the reduction of global carbon emissions. However, the production of hydrogen through electrolysis creates interdependencies with electricity systems. Therefore, we present a new model which couples the hydrogen supply chain with the electricity system. We use this model to analyse a case study of Germany in 2030. We find that if efficient spatially resolved electricity tariffs are applied instead of existing uniform tariffs, electrolyzers are placed primarily at low-cost nodes and farther away from consumption centers. For hydrogen, this leads to higher transportation costs, but lower production costs, and lower total costs. Moreover, costs for congestion management decrease substantially
Integrating Hydrogen in Single-Price Electricity Systems: The Effects of Spatial Economic Signals
Hydrogen can contribute substantially to the reduction of carbon emissions in
industry and transportation. However, the production of hydrogen through
electrolysis creates interdependencies between hydrogen supply chains and
electricity systems. Therefore, as governments worldwide are planning
considerable financial subsidies and new regulation to promote hydrogen
infrastructure investments in the next years, energy policy research is needed
to guide such policies with holistic analyses. In this study, we link a
electrolytic hydrogen supply chain model with an electricity system dispatch
model, for a cross-sectoral case study of Germany in 2030. We find that
hydrogen infrastructure investments and their effects on the electricity system
are strongly influenced by electricity prices. Given current uniform prices,
hydrogen production increases congestion costs in the electricity grid by 17%.
In contrast, passing spatially resolved electricity price signals leads to
electrolyzers being placed at low-cost grid nodes and further away from
consumption centers. This causes lower end-use costs for hydrogen. Moreover,
congestion management costs decrease substantially, by up to 20% compared to
the benchmark case without hydrogen. These savings could be transferred into
according subsidies for hydrogen production. Thus, our study demonstrates the
benefits of differentiating economic signals for hydrogen production based on
spatial criteria
The Efficiency and Distributional Effects of Alternative Residential Electricity Rate Designs
Electricity tariffs typically charge residential users a volumetric rate that covers the bulk of energy, transmission, and distribution costs. The resulting prices, charged per unit of electricity consumed, do not reflect marginal costs and vary little across time and space. The emergence of distributed energy resourcesâsuch as solar photovoltaics and energy storageâhas sparked interest among regulators and utilities in reforming electricity tariffs to enable more efficient utilization of these resources. The economic pressure to redesign electricity rates is countered by concerns of how more efficient rate structures might impact different socioeconomic groups. We analyze the bill impacts of alternative rate plans using interval metering data for more than 100,000 customers in the Chicago, Illinois area. We combine these data with granular Census data to assess the incidence of bill changes across different socioeconomic groups. We find that low-income customers would face bill increases on average in a transition to more economically efficient electricity tariffs. However, we demonstrate that simple changes to fixed charges in two-part tariffs can mitigate these disparities while preserving all, or the vast majority, of the efficiency gains. These designs rely exclusively on observable information and could be replicated by utilities in many geographies across the U.S