Although the transportation and electricity sectors are largely independent today, a shift towards hydrogen as a major transportation fuel could lead to significant integration. Estimating the economic and environmental costs and benefits of hydrogen-based transportation requires understanding the broader energy systems-context within which the hydrogen supply pathways operate. Interactions between hydrogen systems and the dynamic electricity grid are key issues.

This paper presents a scenario analysis of greenhouse gas emission and electricity cost impacts associated with hydrogen supply pathways in California, considering dynamics in both the electricity and transportation sectors. We develop a set of energy demand scenarios for the State through 2050, and model the electricity sector using a dispatch model to simulate the composition of the grid on an hourly basis. The model allocates generation according to a set of rules defined for a given scenario, which governs the addition of future capacity as well as dispatch order. We translate a set of base energy demand scenarios (low, medium, and high) for electricity and transportation fuels into hourly electricity demands, and calculate the emissions and costs associated with the transportation-related marginal electricity demands using the dispatch model.

The figure below represents a preliminary run of the model, and illustrates how hourly electricity generation varies according to demand and resource availability. As demand increases, new generation is brought online to supply it. Each plant has different cost and emission characteristics, leading to variable supply costs and greenhouse gas emissions throughout the day.

The figure illustrates the two important considerations that affect electricity dispatch: demand levels, and supply availability. We investigate both in this paper. Regarding demand levels, we consider the impact on hourly electricity demand of several hydrogen pathways – including production from electrolysis and other methods, and compression and liquefaction demands – and compare the impacts of these marginal electricity demands to those for plug-in hybrid vehicles. We also investigate impacts associated with varying the time-of-day of these demands.

The impacts that grid composition and supply availability have on the emissions and cost characteristics of these transportation fueling pathways is considered as well. Many parameters influence the type of capacity (and its associated characteristics) that is available for dispatch, including technical progress, energy prices (especially natural gas), and state and local policies. We account for these parameters by varying operating costs, supply availability, and the dispatch rules. Rules are set to investigate particular policies, including Renewable Portfolio Standards, electricity import strategies, and greenhouse gas mitigation. The latter is especially intriguing, given recent legislation in California that might significantly affect current and near-term energy markets (e.g., AB 32, AB 1007, AB 1493, SB 107).

We combine the demand and supply scenarios to develop a set of outputs quantifying the greenhouse gas emissions and marginal electricity generation costs associated the scenarios. Together, they provide useful insight regarding a transition to alternative transportation fuel supply strategies in near-term and emerging markets.