Scandinavian Working Papers in Business Administration
Discussion Papers,
Norwegian School of Economics, Department of Business and Management Science
No 2025/1: Hydrogen in Renewable-Intensive Energy Systems: Path to Becoming a Cost-Effective and Efficient Storage Solution
Chunzi Qu (), Rasmus Noss Bang (), Leif K. Sandal () and Stein Ivar Steinshamn ()
Additional contact information
Chunzi Qu: Dept. of Business and Management Science, Norwegian School of Economics, Postal: NHH , Department of Business and Management Science, Helleveien 30, N-5045 Bergen, Norway
Rasmus Noss Bang: SNF - Centre for Applied Research at NHH, Postal: SNF - Centre for Applied Research at NHH, Helleveien 30, N-5045 Bergen, Norway
Leif K. Sandal: Dept. of Business and Management Science, Norwegian School of Economics, Postal: NHH , Department of Business and Management Science, Helleveien 30, N-5045 Bergen, Norway
Stein Ivar Steinshamn: Dept. of Business and Management Science, Norwegian School of Economics, Postal: NHH , Department of Business and Management Science, Helleveien 30, N-5045 Bergen, Norway
Abstract: This paper examines the integration of hydrogen storage in renewable-intensive energy sys tems. Current hydrogen storage technology is too costly and inefficient, but reducing hydrogen costs to 12.5% of current levels and increasing round-trip efficiency to 70% could make it com petitive. These are challenging targets but feasible given positive predictions on cost reduction and efficiency attainability currently. Hydrogen storage reduces total energy system costs by partly replacing lithium batteries to lower storage costs, due to its suitability for long-term storage, while increasing grid flexibility to lower transmission costs. Moreover, integrating hydrogen can decrease the share of nuclear and fossil fuels in the generation mix, reducing generation costs. Italy and Germany are identified as primary targets for hydrogen expansion in Europe. In scenarios of limited lithium supply, hydrogen becomes more competitive and essential to compensate for system storage capacity shortages, though it may not reduce total system costs.
Keywords: European energy system; Hydrogen storage; Optimization model; Storage capacity expansion
Language: English
24 pages, January 13, 2025
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