On the consistency of renewable-to-hydrogen pricing

• Published in: CSEE Journal of Power and Energy Systems Vol. 8; no. 2; pp. 392 - 402
• Main Authors: Litao Zheng, Jianxiao Wang, Yang Yu, Gengyin Li, Ming Zhou, Qing Xia, Guizhi Xu
• Format: Journal Article
• Language: English
• Published: Beijing Chinese Society for Electrical Engineering Journal of Power and Energy Systems 01.03.2022; China electric power research institute
• Subjects: Clearing; Consistency; Development strategies; Energy development; Hydrogen; Hydrogen-based energy; Marginal pricing; Mixed integer; Pricing; Supply chains
• ISSN: 2096-0042; 2096-0042
• DOI: 10.17775/CSEEJPES.2021.05630

With the proposal of carbon neutrality goals and hydrogen energy development strategies in various countries, the development and construction of hydrogen supply chains have become important priorities. However, existing research has paid little attention to the hydrogen market and pricing. Therefore, a hydrogen pricing method based on marginal pricing theory is proposed in this paper, which adapts to hydrogen systems with renewable-to-hydrogen as a major source, in the future. A hydrogen energy market is established to define the industrial chain of hydrogen and the hydrogen trading process. The hydrogen market-clearing model is formulated considering a dynamic line pack. Due to its nonconvexity, the model is equivalently converted into mixed-integer second-order cone programming, and the optimality gap is minimized by introducing a penalty term. Based on the clearing solution, the concept and calculation method of the locational marginal hydrogen price (LMHP) are proposed with respect to the locational marginal price (LMP) in electricity markets. Case studies based on a modified Belgium 20-node gas network and Pennsylvania, New Jersey, and Maryland (PJM) market operation data demonstrate the consistency between LMHP and LMP.