In a significant stride towards decarbonizing the power sector, researchers have unveiled a novel framework to assess the economic viability of electrolytic hydrogen-based power-to-gas-to-power (PGP) systems. Published in the journal *Nature Communications* (translated to *Nature Communications* in English), the study led by Ayodeji Okunlola from the University of Alberta’s Department of Mechanical Engineering, offers a roadmap for integrating electrolytic hydrogen into fossil fuel-dependent grids, balancing the interests of electricity system operators, risk-averse investors, and government entities.
The research underscores the pivotal role of targeted emissions pricing in achieving cost-effective PGP integration. “Given the risk-averse investor’s inherent pursuit of profit maximization, a break-even carbon abatement cost of at least 57 Canadian Dollars per tonne of CO₂ by 2030 is essential,” Okunlola asserts. This pricing strategy, coupled with a shift in electricity market dispatch rules from sole system marginal price reduction to system-wide emissions reduction, is crucial for stimulating price discovery for low-cost hydrogen production and contingency reserve provision by the PGP system.
The study’s findings hold substantial commercial implications for the energy sector. By providing a clear economic framework, it enables policymakers to capture and incentivize the role of electrolytic hydrogen in low-carbon power sector planning. This could accelerate the adoption of electrolytic hydrogen in greenhouse gas-intensive power sectors, fostering a more sustainable energy landscape.
Moreover, the research highlights the need for a balanced approach that considers the competing objectives of various stakeholders. “Achieving cost-effective PGP integration requires a nuanced understanding of the electricity system operator’s goals, the risk-averse investor’s profit motives, and the government’s environmental objectives,” Okunlola explains. This holistic perspective is key to driving the widespread adoption of electrolytic hydrogen technologies.
The study’s insights could shape future developments in the field, paving the way for innovative solutions that align economic viability with environmental sustainability. As the energy sector grapples with the challenges of decarbonization, this research offers a beacon of hope, illuminating the path towards a greener, more efficient energy future.