A Novel Hydrogen Supply Chain Optimization Model - Case Study of Texas and Louisiana

The increasing political momentum advocating for decarbonization efforts has led many governments around the world to unveil national hydrogen strategies. Hydrogen is viewed as a potential enabler of deep decarbonization, notably in hard-to-abate sectors such as the industry. A multi-modal, hourly resolved, linear programming model was developed to assess the infrastructure requirements of a low-carbon supply chain over a large region. It optimizes the deployment of infrastructure from 2025 up to 2050 by assessing four years: 2025, 2030, 2040, and 2050, and is location agnostic. The considered infrastructure encompasses several technologies for production, transmission, and storage. Model results illustrate supply chain requirements in Texas and Louisiana. Edge cases considering 100% electrolytic production were analyzed. Results show that by 2050, with an assumed industrial demand of 276 TWh/year, Texas and Louisiana would require 62 GW of electrolyzers, 102 GW of onshore wind, and 32 GW of solar panels. The resulting levelized cost of hydrogen totaled $5.6–6.3/kgH2 in 2025, decreasing to $3.2–3.5/ kgH2 in 2050. Most of the electricity production occurs in Northwest Texas thanks to high capacity factors for both renewable technologies. Hydrogen is produced locally and transmitted through pipelines to demand centers around the Gulf Coast, instead of electricity being transmitted for electrolytic production co-located with demand. Large-scale hydrogen storage is highly beneficial in the system to provide buffer between varying electrolytic hydrogen production and constant industrial demand requirements. In a system without low-cost storage, liquid and compressed tanks are deployed, and there is a significant renewable capacity overbuild to ensure greater electrolyzer capacity factors, resulting in higher electricity curtailment. A system under carbon constraint sees the deployment of natural gas-derived hydrogen production. Lax carbon constraint target result in an important reliance on this production method due to its low cost, while stricter targets enforce a great share of electrolytic production.