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Portfolio Effects in Green Hydrogen Production Under Temporal Matching Requirements

Author

Listed:
  • Casas Ferrús, M. Nieves

    (RWTH Aachen university)

  • Ruhnau, Oliver

    (Faculty of Economics and Institute of Energy Economics University of Cologne)

  • Madlener, Reinhard

    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

Abstract

This article investigates temporal matching requirements for green hydrogen. While previous studies found that a more granular matching increases production costs, we focus on cost advantages under hourly matching through technological and geographical diversification. To quantify the resulting portfolio effects, we further develop and apply a linear cost-optimization model. We identify two types of portfolio effects, “technological” and “locational”, and quantify them for different portfolio sizes and types of electricity generation technologies. We find portfolio effects in the range of 3–7% when aggregating two locations, and up to 21% for a Germany-wide portfolio. We discuss the implications of our findings in terms of discrimination against small players and for the modeling of temporal matching requirements.

Suggested Citation

  • Casas Ferrús, M. Nieves & Ruhnau, Oliver & Madlener, Reinhard, 2023. "Portfolio Effects in Green Hydrogen Production Under Temporal Matching Requirements," FCN Working Papers 18/2023, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    • Handle: RePEc:ris:fcnwpa:2023_018
    as

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    References listed on IDEAS

    as
    1. Sabadini, Felipe & Madlener, Reinhard, 2022. "Effectiveness of a serious game for teaching and increasing awareness about the German energy transition," FCN Working Papers 10/2022, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    2. Fleiter, Jannik & Atasoy, Ayse Tugba & Madlener, Reinhard, 2023. "Household Responses to the Tax Treatment of Income from Solar PV Feed-in in Germany," FCN Working Papers 8/2023, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    3. Ruhnau, Oliver, 2022. "How flexible electricity demand stabilizes wind and solar market values: The case of hydrogen electrolyzers," Applied Energy, Elsevier, vol. 307(C).
    4. Liepold, Constanze & Fabianek, Paul & Madlener, Reinhard, 2023. "Tradable Performance Standards for a Greener Automobile Sector: An Economists’ Appraisal of the German Greenhouse Gas Mitigation Quota," FCN Working Papers 9/2023, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    5. Liepold, Constanze & Fabianek, Paul & Madlener, Reinhard, 2023. "A Critical Evaluation of the 2022 Greenhouse Gas Mitigation Quota in Germany from an Environmental Economics and Policy Perspective," FCN Working Papers 10/2023, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    6. Schreiner, Lena & Madlener, Reinhard, 2023. "The Impact of Sustainable Innovation Finance on Achieving Global Climate Goals," FCN Working Papers 3/2023, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    7. Liepold, Constanze & Fabianek, Paul & Madlener, Reinhard, 2023. "A Multi-Criteria Assessment Framework for Direct Load Control in Residential Buildings from an Occupants’ Perspective," FCN Working Papers 15/2023, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
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    More about this item

    Keywords

    Green hydrogen; renewable energy; portfolio effects; risk diversification;
    All these keywords.

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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