Synergies between Renewable Energy and Flexibility Investments: A Case of a Medium-Sized Industry

Abstract

Climate and energy policies are tools used to steer the development of a sustainable economy supplied by equally sustainable energy systems. End-users should plan their investments accounting for future policies, such as incentives for system-oriented consumption, emission prices and hydrogen economy, to ensure long-term competitiveness. In this work, the utilization of variable renewable energy and flexibility potentials in a case study of an aggregate industry is investigated. An energy concept considering PV and battery expansion, flexible production, fuel cell electric trucks (FCEV) and hydrogen production is proposed, and analysed under expected techno-economic conditions and policies of 2030 using an energy system optimization model. Under this concept, total costs and emissions are reduced by 14% and 70%, respectively, compared to the business-as-usual system. The main benefit of PV investment is the lowered electricity procurement. Flexibility from schedulable manufacturing and hydrogen production increases not only the self-consumption of PV generation from 51% to 80% but also the optimal PV capacity by 41%. Despite the expected cost reduction and efficiency improvement, FCEV is still not competitive to diesel trucks due to higher investment and fuel prices, i.e., its adoption increases the costs by 8%. However, this is resolved when hydrogen can be produced from own surplus electricity generation. Our findings reveal synergistic effects between different potentials and the importance of enabling local business models, e.g., regional hydrogen production and storage services. The SWOT analysis of the proposed concept shows that the pursuit of sustainability via new technologies entails new opportunities and risks. Lastly, end-users and policymakers are advised to plan their investments and supports towards integration of multiple application, consumption sectors and infrastructure.

Keywords

• optimization
• investment
• renewable energy
• demand-side management
• hydrogen economy