Cost minimisation of renewable hydrogen in a Dutch neighbourhood while meeting European Union sustainability targets

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Decentralised renewable energy production in the form of fuels or electricity can have large scale deployment in future energy systems, but the feasibility needs to be assessed. The novelty of this paper is in the design and implementation of a mixed integer linear programming optimisation model to minimise the net present cost of decentralised hydrogen production for different energy demands on neighbourhood urban scale, while simultaneously adhering to European Union targets on greenhouse gas emission reductions. The energy system configurations optimised were assumed to possibly consist of a variable number or size of wind turbines, solar photovoltaics, grey grid electricity usage, battery storage, electrolyser, and hydrogen storage. The demands served are hydrogen for heating and mobility, and electricity for the households. A hydrogen residential heating project currently being developed in Hoogeveen, The Netherlands, served as a case study. Six scenarios were compared, each taking one or multiple energy demand services into question. For each scenario the levelised cost of hydrogen was calculated. The lowest levelised cost of hydrogen was found for the combined heating and mobility scenario: 8.36 €/kg for heating and 9.83 €/kg for mobility. The results support potential cost reductions of combined demand patterns of different energy services. A sensitivity analysis showed a strong influence of electrolyser efficiency, wind turbine parameters, and emission reduction factor on levelised cost. Wind energy was strongly preferred because of the lower cost and the low greenhouse gas emissions, compared to solar photovoltaics and grid electricity. Increasing electrolyser efficiency and greenhouse gas emission reduction of the used technologies deserve further research.
Original languageEnglish
Pages (from-to)1-13
Number of pages13
JournalEnergy Conversion and Management
Issue number115903
Publication statusPublished - 1 Sept 2022


  • hydrogen
  • supply chain optimization
  • greenhouse gas emission reduction
  • MILP
  • decentralized energy systems


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