Economic assessment of hydrogen production in a Renewable Energy Community in Italy

Abstract

Renewable Energy Community (REC) is a new paradigm in European Union to produce, transform, share and sell renewables at a local consumer level, also via e-fuel (i.e. hydrogen). This work investigates the economic feasibility of a hydrogen Power-to-Gas (PtG) system realized inside a REC, using only excess renewable electricity, not consumed by REC itself. A single centralized photovoltaic (PV) plant is directly connected to an electrolyser; a hydrogen compressor and two hydrogen storages at low and high pressure complete the PtG system. A scenario of a REC composed by 450 residential electric users (around 1,000 people) has been analysed, coupled with described PtG considering eight different sizes of PV plant. In the study, Italian subsidies to REC shared energy are evaluated as incentives to hydrogen production. An optimal size of PtG components for each PV size is investigated at the limit of economical sustainability, evaluating net present value (NPV) positive and near zero. Results show that for the considered REC, it is possible to produce and sell up to around 3 tons per year of green hydrogen at most to the same lowest selling price declared currently in the Italian market (5 €/kg).

Keywords

• Renewable energy community (REC)
• Hydrogen
• Power-to-gas
• Levelized cost of hydrogen (LCOH)
• Net present value (NPV)
• Shared energy