From Curtailed Renewable Energy to Green Hydrogen: Infrastructure Planning for Hydrogen Fuel-Cell Vehicles

Abstract

Problem definition: Hydrogen fuel-cell vehicles (HFVs) have been proposed as a promising green transportation alternative. For regions experiencing renewable energy curtailment, promoting HFVs can achieve the dual benefit of reducing curtailment and developing sustainable transportation. However, promoting HFVs faces several major hurdles, including uncertain vehicle adoption, the lack of refueling infrastructure, the spatial mismatch between hydrogen demand and renewable sources for hydrogen production, and the strained power transmission infrastructure. In this paper, we address these challenges and study how to promote HFV adoption by deploying HFV infrastructure and utilizing renewable resources. Methodology/results: We formulate a planning model that jointly determines the location and capacities of hydrogen refueling stations (HRSs) and hydrogen plants as well as electricity transmission and grid upgrade. Despite the complexity of explicitly considering drivers’ HFV adoption behavior, the bilevel optimization model can be reformulated as a tractable mixed-integer second-order cone program. We apply our model calibrated with real data to the case of Sichuan, a province in China with abundant hydro resources and a vast amount of hydropower curtailment. Managerial implications: We obtain the following findings. (i) The optimal deployment of HRSs displays vastly different spatial patterns depending on the HFV adoption target. The capital city, a transportation hub, is excluded from the plan under a low target and only emerges as the center of HFV adoption under a high target. (ii) Promoting the HFV adoption can overall help reduce hydropower curtailment, but the effectiveness depends on factors such as the adoption target and the grid upgrade cost. (iii) Being a versatile energy carrier, hydrogen can be transported to various locations, which allows for strategic placement of HRSs in locations distinct from hydrogen plant sites. This flexibility offers HFVs greater potential cost savings and curtailment reduction compared with other alternative fuel vehicles (e.g., electric vehicles) under current cost estimates. Funding: W. Qi acknowledges the support from the National Natural Science Foundation of China [Grants 72242106 and 72188101] and the Natural Sciences and Engineering Research Council of Canada [Grant RGPIN-2019-04769]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2022.0381 .