Power-to-X strategies for Smart Energy Regions: a vision for green hydrogen valleys

The necessity to contain the environmental impact due to fossil fuel use, and their limited availability, has made it necessary to increase the coverage of world energy demand with renewable sources, through a gradual transition from an energy system based mainly on the use of non-renewable sources to one which provides for greater integration of renewable sources (Azeem et al., 2020; Lund & Kempton, 2014).

The transition to future energy systems foresees their complete transformation, including distributed generation based on the sustainable use of renewable sources and the organization of territorial systems according to the ‘smart energy systems’ (SES) approach (Gestore dei Servizi Energetici - GSE S.p.A, n.d.; Lund, 2014).

The use of this approach makes energy systems more complex because it brings with it a series of issues related both to the use of renewable energy sources (RES), whose production is uncertain over time and to the balance and security in the supply which, in a distributed production configuration, presents the need to a more coordinated and controlled management of the interconnections between the different sectors (Lund, 2014).

For this reason, to perform energy system analyses (of energy demand and supply) and to evaluate an optimal integration of renewables into the system, especially variable ones, an ‘hour-by-hour’ simulation model is needed, taking into account all the possible interactions of the energy sectors, users, and technologies.

Future energy grids will require coordination with other infrastructures to identify synergies, increase efficiency, and reduce costs compared to solutions that solely focus on one grid.

In solving the mismatch between demand and production, technologies play a crucial role. Smart grids, for example, can regulate energy flows according to changes in supply and demand, helping to balance the grid and reduce excesses, while also enabling the integration of RES.

Energy storage technologies such as batteries, flywheels, hydropower storage, and electric vehicles can help balance the grid as well.

Battery Energy Storage Systems (BESS) can provide stability, reliability, and resilience to the grid and enhance its performance and flexibility (Zhao et al., 2023). They can offer ancillary services by providing energy during the peak demand but also by storing excess energy from renewables, reducing the need for conventional power plants to ramp up production during peak hours (Killer et al., 2020). They can also assist in restarting power plants and grid infrastructure without relying on external energy sources (Griesheim et al., 2020).

It is expected that the global demand for BESSs will grow by 25% annually, with a long-term price target of 100$/kWh for board market penetration (Bai & Song, 2023) with lithium-ion batteries as a prevalent choice due to their high energy and power density, low self-discharge, and high round-trip efficiency. However, while innovation on batteries continues, further cost reductions depend on critical mineral prices (IEA (2023)).

In addition to these systems, it is possible to use the electrical surplus to produce hydrogen, via electrolysis (alkaline, PEM, SOECs, etc.), which can be used both as an energy carrier and in industrial processes.

Power-to-Gas (P2G) indicates a group of technologies that convert surplus electricity into hydrogen or methane to be used as fuel or energy storage medium. P2G is seen as a promising strategy to integrate renewable energy sources into the energy system, as it allows for the conversion of excess renewable energy into a storable form that can be used to balance the grid and provide energy on demand. In recent years, there has been a growing interest in P2G strategies as part of the energy planning process and a significant body of literature has emerged on the topic (Burre et al., 2020; Dolci et al., 2019; Ince et al., 2021; Koj et al., 2019a, 2019b; Raimondi & Spazzafumo, 2023; Skov et al., 2021; Sorrenti et al., 2022; Terna Spa, n.d.). By storing excess renewable energy in the form of hydrogen or methane, P2G can help to balance the grid and provide energy. This can help to mitigate the intermittency of renewable energy sources and increase their overall value to the energy system.

P2G can provide a range of energy services, including electricity generation, heat production, and transportation fuel. The versatility of P2G makes it an attractive option for energy planning, as it can be used to address multiple energy challenges (Liu et al., 2017).

The economic viability of P2G strategies depends on a range of factors, including the cost of renewable energy sources, the cost of the P2G technology, and the market demand for the resulting products (Liu et al., 2017). Some studies have found that P2G can be economically competitive in certain scenarios, while others have suggested that it may be more cost-effective to use other forms of energy storage (Pastore et al., 2022a; Pastore et al., 2022b).

The regulatory framework for P2G is still evolving, and there is a need for clear policies and regulations to support its deployment (Dolci et al., 2019). The deployment of this technology is subject to legal barriers, which may differ from one country to another. The most frequently considered pathway, from a legal standpoint, is using hydrogen for mobility (Dolci et al., 2019).

The environmental benefits of P2G depend on the source of the renewable energy used to power the technology. If renewable energy sources are used exclusively, P2G can help reduce greenhouse gas emissions and improve air quality, whereas fossil fuels used to power the technology limit its environmental benefits (Partidário et al., 2020).

Overall, the literature suggests that the economic viability and environmental benefits of P2G will depend on a range of factors, and clear policies and regulations will be needed to support its deployment (Patore, 2023).

The overall objective of this work was to evaluate the benefits and the technical feasibility of the integration of hydrogen in a defined regional energy strategy that already meets the European targets of reducing CO₂ emissions by 2050.

Many studies have performed energy modeling with a holistic approach, analyzing and implementing energy planning strategies at national, regional, local, and urban levels to achieve challenging sustainability objectives (Piacentino et al., 2019), like higher integration of RES, flexibility, and sustainable heating, but also investigating the possibility to use hydrogen in the strategies (P2G measures).

At the country scale Colbertaldo et al. (2018), n, (n.d.) have analyzed scenarios for Italy for the years 2030 and 2050, considering the transportation and power sector and foreseeing RES integration and hydrogen use for fuel cell mobility; however, these actions could not allow achieving the decarbonization targets.

At regional level, in Bellocchi et al. (2020), Automobile Club Italia, (n.d.) the authors performed a multi-objective optimization to set an energy strategy for an Italian region, Valle d’Aosta, considering transportation and building consumption. Energy efficiency measures and PV system installations were considered key actions to reduce emissions (up to 50%).

These types of strategies could be considered guidelines for policymakers and are particularly useful for those territories that are affected by the need to increase energy security, like islands or mountain communities.

In Cabrera et al. (2018), QGIS, (n.d.) for example, the authors implemented a smart energy strategy for an island, Gran Canaria, considering the power, heating, transportation, and desalination. The energy mix considered in one scenario could reach an emission reduction equal to 75%. The scenarios used the CO₂ captured and biogas methanation to produce electro-fuels.

In Prina et al. (2018) energy efficiency measures in building sector were foreseen for the South Tyrol region, Italy; the authors performed a multi-objective optimization, considering the transport, heat, and power sectors to achieve 44% emission reduction and keeping the costs equal to the reference scenario.

From the analysis of the literature, it has emerged that the energy mix and in particular the RES installed capacity are chosen without using both top-down and bottom-up approaches. Moreover, in many of the works, the smart energy systems are modeled, not considering all the sectors involved in energy consumption.

The energy system considered in this study is a southern Italian region, Campania, whose outlined energy plan for the year 2050 does not foresee hydrogen production (Battaglia et al., 2022). Starting from that energy model configuration, the authors considered the integration of alkaline electrolyzers to produce hydrogen to be used in the transport sector, to analyze the effect of hydrogen production on the overall performance of the energy strategy.

The main objective of this paper is to provide an assessment of the potential of green hydrogen production in the region, within an already set strategy towards 2050 based on a holistic approach to energy modeling and a combined bottom-up and top-down analysis for RES potential evaluation.

The remaining part of this paper is organized as follows: the “Materials and method” section describes the methodology, the “Results” section presents the main results obtained from the application of the method to the case study, the discussion is displayed in the “Discussion” section, and the “Conclusion” section concern conclusions with indication of future developments.

This paper is based on a previous energy strategy implementation (Battaglia et al., 2022), set up for a regional energy system, considering a future scenario (year 2050), whose goal was to obtain 80% CO₂ emission reduction, compared to 1990 levels, in line with the European environmental goals for that future year.

For the sake of clarity, a brief description of the overall methodology is here presented. The details are available in Battaglia et al. (2022).

The research performed in Battaglia et al. (2022) allowed us to schematize the guidelines for the correct territorial integration of available resources together with energy efficiency policies; the analysis of the achievement of the objectives imposed at national level, Burden Sharing; and the level of ‘smartness’ of a regional system.

The methodology proposed by the research allowed to not only implement future scenarios with the smart energy system approach but also to include site-specific RES potential in the hourly analysis and evaluate flexibility.

To do this, the actual regional energy system model was implemented, starting from the evaluation of the energy consumption and production for a reference year (2017) for each sector of the system (electricity, heating, cooling, industry, and transport), using a bottom-up approach with GIS and energy tools, on an hourly basis.

The entire system was built in the main techno-economic model, which is EnergyPLAN (Lund, Thellufsen, et al. 2021), whose characteristics are described in the following sub-section.

Starting from the reference model of the energy system, a further integration of RES was adopted. The results used to evaluate the sustainability of the system are related to the energy, emissions, and costs.

The subsections presented below describe the four main steps of this work: Implementation of the regional baseline model (“Main model description” section), Validation of the model (“Validation” section), Identification of future scenarios with RES integration (“Integration of RES in future scenarios” section), Implementation of scenarios with Power-to-Gas strategy (“Hydrogen production” section), Future scenario definition (“Future scenario definition” section), Cost analysis (“Cost analysis” section), and Sensitivity analysis (“Sensitivity analysis” section).

In this section, the main findings of the study are presented in order to assess the efficacy of the strategies implemented for the Campania Region. The first subsection displays the future scenarios related to the development of the energy system in the years 2030 and 2050, a second section describes the results obtained by the adoption of the Power-to-Gas strategies to abate the surplus electricity from RES. Finally, the results of the sensitivity analysis are shown.

The data presented highlight the potential for hydrogen production through electrolyzers to play a significant role in decarbonizing transport sector. The results denote that hydrogen, when produced via electrolysis and stored, can cover a notable portion of the transportation sector’s energy needs.

In examining the scenarios, achieving a substantial impact requires substantial infrastructure.

The diminished excess electricity production, albeit a trade-off, indicates a more balanced energy utilization.

From an economic standpoint, while the Power-to-Gas scenarios show comparable costs to the 2050 scenario without hydrogen production, it is notable that the reduction in exported electricity does not necessarily translate to positive cost impacts in alternative 2050 scenarios. This underscores the complexity of balancing energy production, storage, and transportation needs while considering economic viability.

The presented data emphasizes the importance of scaling electrolyzer capacity and storage to achieve substantial sector penetration. Future strategies should focus on optimizing these infrastructure aspects to balance efficiency and cost-effectiveness.

This study aimed to investigate the performance improvement potential of the integration of the Power-to-Gas strategy in Campania region, Italy, considering a future scenario that already meets the European environmental goal of 80% reduction of CO₂ emission concerning the 1990 level.

In all the Power-to-Gas scenarios implemented, by integrating hydrogen production into the energy strategy, the energy system can move towards a more sustainable development, reducing greenhouse gas emissions, and in particular hydrogen fuel cells can provide a clean alternative to traditional internal combustion engines.

Integrating electrolyzers with the grid offers different insights. With a reduced capacity of 1300 MW and storage of 0.9 GWh, the efficiency slightly decreases, yet still manages to cover 10% of light transport needs.

Moreover, this diversification of endogenous energy sources can enhance energy security by reducing reliance on a single primary energy source, especially for territories heavily dependent on imported fossil fuels. High use of RES could also have social benefits since the majority of the energy is independent of the market dynamics since it is produced locally and self-consumed.

Other important challenges to overcome are infrastructure development, costs, and safety considerations. As the technology matures and becomes more accessible, hydrogen could play a significant role in reducing emissions and diversifying the transportation sector.

The authors’ findings indicate that there is space for a further reduction of emissions and a breakdown of surplus electric energy produced by RES.