Seasonal hydrogen storage decisions under constrained electricity distribution capacity

The transition to renewable energy systems causes increased decentralization of the energy supply. Solar parks are built to increase renewable energy penetration and to supply local communities that become increasingly self-sufficient. These parks are generally installed in rural areas where electricity grid distribution capacity is limited. This causes the produced energy to create grid congestion. Temporary storage can be a solution. In addition to batteries, which are most suitable for intraday storage, hydrogen provides a long-term storage option and can be used to overcome seasonal mismatches in supply and demand. In this paper, we examine the operational decisions related to storing energy using hydrogen, and buying from or selling to the grid considering grid capacity limitations. We model the problem as a Markov decision process taking into account seasonal production and demand patterns, uncertain solar energy generation, and local electricity prices. We show that ignoring seasonal demand and production patterns is suboptimal. In addition, we show that the introduction of a hydrogen storage facility for a solar farm in rural areas may lead to positive profits, whereas this is loss-making without storage facilities. In a sensitivity analysis, we show that only if distribution capacity is too small, hydrogen storage does not lead to profits and reduced congestion at the cable connection. When the distribution capacity is constrained, a higher storage capacity leads to more buying-related actions from the electricity grid to prevent future shortages and to exploit price differences. This leads to more congestion at the connected cable and is an important insight for policy-makers and net-operators.