skip to main content
OSTI.GOV title logo U.S. Department of Energy
Office of Scientific and Technical Information

Title: Valuation and cost reduction of behind-the-meter hydrogen production in Hawaii

Abstract

A 250kW hydrogen electrolysis facility was recently installed at the Natural Energy Laboratory of Hawaii Authority's (NELHA's) campus. This facility that will begin operation in 2020 to produce hydrogen for fuel cell buses on the island to demonstrate of the application of hydrogen to decarbonize transportation. Given the size of the electrolysis station, it has the potential to significantly increase electricity costs for the campus, which is subject to energy and peak demand charges from the local utility. In this paper, we analyze the cost of hydrogen production at NELHA given the rate structure options available from the utility. Production costs are estimated using optimal versus constant scheduling of the facility to meet the buses’ demand. A model of the electrolysis station is used to capture changes in production efficiency over the power range in the optimization routine. The effects of combining the station and campus load versus standalone operation and increasing solar generation are also explored. The analyses surrounding this scenario show the importance of multiple factors on the potential profitability of hydrogen production in behind-the-meter applications and show trends that could have implications for other similar installations.

Authors:
ORCiD logo [1];  [2];  [3];  [4]
  1. Sandia National Lab. (SNL-NM), Albuquerque, NM (United States)
  2. GRandalytics, Honolulu, HI (United States)
  3. Hydrogen and Renewable Energy System Analysis (H2RESA), Pickering, ON (Canada)
  4. Univ. of Hawaii at Manoa, Honolulu, HI (United States). Hawaii Natural Energy Inst.
Publication Date:
Research Org.:
Sandia National Lab. (SNL-NM), Albuquerque, NM (United States)
Sponsoring Org.:
USDOE Office of Electricity (OE); USDOE National Nuclear Security Administration (NNSA)
OSTI Identifier:
1670181
Report Number(s):
SAND-2020-5374J
Journal ID: ISSN 2329-2229; 686283
Grant/Contract Number:  
AC04-94AL85000; NA0003525
Resource Type:
Journal Article: Accepted Manuscript
Journal Name:
MRS Energy & Sustainability
Additional Journal Information:
Journal Volume: 7; Journal ID: ISSN 2329-2229
Publisher:
Materials Research Society - Cambridge University Press
Country of Publication:
United States
Language:
English
Subject:
storage; economics; efficiency; sustainability

Citation Formats

Headley, Alexander, Randolf, Günter, Virji, Mebs, and Ewan, Mitch. Valuation and cost reduction of behind-the-meter hydrogen production in Hawaii. United States: N. p., 2020. Web. doi:10.1557/mre.2020.20.
Headley, Alexander, Randolf, Günter, Virji, Mebs, & Ewan, Mitch. Valuation and cost reduction of behind-the-meter hydrogen production in Hawaii. United States. doi:10.1557/mre.2020.20.
Headley, Alexander, Randolf, Günter, Virji, Mebs, and Ewan, Mitch. Mon . "Valuation and cost reduction of behind-the-meter hydrogen production in Hawaii". United States. doi:10.1557/mre.2020.20. https://www.osti.gov/servlets/purl/1670181.
@article{osti_1670181,
title = {Valuation and cost reduction of behind-the-meter hydrogen production in Hawaii},
author = {Headley, Alexander and Randolf, Günter and Virji, Mebs and Ewan, Mitch},
abstractNote = {A 250kW hydrogen electrolysis facility was recently installed at the Natural Energy Laboratory of Hawaii Authority's (NELHA's) campus. This facility that will begin operation in 2020 to produce hydrogen for fuel cell buses on the island to demonstrate of the application of hydrogen to decarbonize transportation. Given the size of the electrolysis station, it has the potential to significantly increase electricity costs for the campus, which is subject to energy and peak demand charges from the local utility. In this paper, we analyze the cost of hydrogen production at NELHA given the rate structure options available from the utility. Production costs are estimated using optimal versus constant scheduling of the facility to meet the buses’ demand. A model of the electrolysis station is used to capture changes in production efficiency over the power range in the optimization routine. The effects of combining the station and campus load versus standalone operation and increasing solar generation are also explored. The analyses surrounding this scenario show the importance of multiple factors on the potential profitability of hydrogen production in behind-the-meter applications and show trends that could have implications for other similar installations.},
doi = {10.1557/mre.2020.20},
journal = {MRS Energy & Sustainability},
issn = {2329-2229},
number = ,
volume = 7,
place = {United States},
year = {2020},
month = {9}
}

Journal Article:
Free Publicly Available Full Text
Publisher's Version of Record

Save / Share:

Works referenced in this record:

Pyomo: modeling and solving mathematical programs in Python
journal, August 2011

  • Hart, William E.; Watson, Jean-Paul; Woodruff, David L.
  • Mathematical Programming Computation, Vol. 3, Issue 3
  • DOI: 10.1007/s12532-011-0026-8

Comparative assessment of hydrogen production methods from renewable and non-renewable sources
journal, January 2014


Power-to-Gas: Electrolyzers as an alternative to network expansion – An example from a distribution system operator
journal, January 2018


Opportunities for Energy Storage in CAISO: Day-Ahead and Real-Time Market Arbitrage
conference, June 2018

  • Byrne, Raymond H.; Nguyen, Tu A.; Copp, David A.
  • 2018 International Symposium on Power Electronics, Electrical Drives, Automation and Motion (SPEEDAM)
  • DOI: 10.1109/SPEEDAM.2018.8445408

Analyses of hydrogen energy system as a grid management tool for the Hawaiian Isles
journal, March 2020


Battery energy storage technology for power systems—An overview
journal, April 2009


(Invited) Development of a Hydrogen Energy System as a Grid Frequency Management Tool
journal, August 2016


Energy Management and Optimization Methods for Grid Energy Storage Systems
journal, January 2018


The role of hydrogen and fuel cells in the global energy system
journal, January 2019

  • Staffell, Iain; Scamman, Daniel; Velazquez Abad, Anthony
  • Energy & Environmental Science, Vol. 12, Issue 2
  • DOI: 10.1039/C8EE01157E

Quantifying the flexibility of hydrogen production systems to support large-scale renewable energy integration
journal, September 2018


Design and operation of a stochastic hydrogen supply chain network under demand uncertainty
journal, March 2012