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    Study: EV charging stations boost spending at nearby businesses

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    Charging stations for electric vehicles are essential for cleaning up the transportation sector. A new study by MIT researchers suggests they’re good for business, too.The study found that, in California, opening a charging station boosted annual spending at each nearby business by an average of about $1,500 in 2019 and about $400 between January 2021 and June 2023. The spending bump amounts to thousands of extra dollars annually for nearby businesses, with the increase particularly pronounced for businesses in underresourced areas.The study’s authors hope the research paints a more holistic picture of the benefits of EV charging stations, beyond environmental factors.“These increases are equal to a significant chunk of the cost of installing an EV charger, and I hope this study sheds light on these economic benefits,” says lead author Yunhan Zheng MCP ’21, SM ’21, PhD ’24, a postdoc at the Singapore-MIT Alliance for Research and Technology (SMART). “The findings could also diversify the income stream for charger providers and site hosts, and lead to more informed business models for EV charging stations.”Zheng’s co-authors on the paper, which was published today in Nature Communications, are David Keith, a senior lecturer at the MIT Sloan School of Management; Jinhua Zhao, an MIT professor of cities and transportation; and alumni Shenhao Wang MCP ’17, SM ’17, PhD ’20 and Mi Diao MCP ’06, PhD ’10.Understanding the EV effectIncreasing the number of electric vehicle charging stations is seen as a key prerequisite for the transition to a cleaner, electrified transportation sector. As such, the 2021 U.S. Infrastructure Investment and Jobs Act committed $7.5 billion to build a national network of public electric vehicle chargers across the U.S.But a large amount of private investment will also be needed to make charging stations ubiquitous.“The U.S. is investing a lot in EV chargers and really encouraging EV adoption, but many EV charging providers can’t make enough money at this stage, and getting to profitability is a major challenge,” Zheng says.EV advocates have long argued that the presence of charging stations brings economic benefits to surrounding communities, but Zheng says previous studies on their impact relied on surveys or were small-scale. Her team of collaborators wanted to make advocates’ claims more empirical.For their study, the researchers collected data from over 4,000 charging stations in California and 140,000 businesses, relying on anonymized credit and debit card transactions to measure changes in consumer spending. The researchers used data from 2019 through June of 2023, skipping the year 2020 to minimize the impact of the pandemic.To judge whether charging stations caused customer spending increases, the researchers compared data from businesses within 500 meters of new charging stations before and after their installation. They also analyzed transactions from similar businesses in the same time frame that weren’t near charging stations.Supercharging nearby businessesThe researchers found that installing a charging station boosted annual spending at nearby establishments by an average of 1.4 percent in 2019 and 0.8 percent from January 2021 to June 2023.While that might sound like a small amount per business, it amounts to thousands of dollars in overall consumer spending increases. Specifically, those percentages translate to almost $23,000 in cumulative spending increases in 2019 and about $3,400 per year from 2021 through June 2023.Zheng says the decline in spending increases over the two time periods might be due to a saturation of EV chargers, leading to lower utilization, as well as an overall decrease in spending per business after the Covid-19 pandemic and a reduced number of businesses served by each EV charging station in the second period. Despite this decline, the annual impact of a charging station on all its surrounding businesses would still cover approximately 11.2 percent of the average infrastructure and installation cost of a standard charging station.Through both time frames, the spending increases were highest for businesses within about a football field’s distance from the new stations. They were also significant for businesses in disadvantaged and low-income areas, as designated by California and the Justice40 Initiative.“The positive impacts of EV charging stations on businesses are not constrained solely to some high-income neighborhoods,” Wang says. “It highlights the importance for policymakers to develop EV charging stations in marginalized areas, because they not only foster a cleaner environment, but also serve as a catalyst for enhancing economic vitality.”Zheng believes the findings hold a lesson for charging station developers seeking to improve the profitability of their projects.“The joint gas station and convenience store business model could also be adopted to EV charging stations,” Zheng says. “Traditionally, many gas stations are affiliated with retail store chains, which enables owners to both sell fuel and attract customers to diversify their revenue stream. EV charging providers could consider a similar approach to internalize the positive impact of EV charging stations.”Zheng also says the findings could support the creation of new funding models for charging stations, such as multiple businesses sharing the costs of construction so they can all benefit from the added spending.Those changes could accelerate the creation of charging networks, but Zheng cautions that further research is needed to understand how much the study’s findings can be extrapolated to other areas. She encourages other researchers to study the economic effects of charging stations and hopes future research includes states beyond California and even other countries.“A huge number of studies have focused on retail sales effects from traditional transportation infrastructure, such as rail and subway stations, bus stops, and street configurations,” Zhao says. “This research provides evidence for an important, emerging piece of transportation infrastructure and shows a consistently positive effect on local businesses, paving the way for future research in this area.”The research was supported, in part, by the Singapore-MIT Alliance for Research and Technology (SMART) and the Singapore National Research Foundation. Diao was partially supported by the Natural Science Foundation of Shanghai and the Fundamental Research Funds for the Central Universities of China. More

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      Elaine Liu: Charging ahead

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      MIT senior Elaine Siyu Liu doesn’t own an electric car, or any car. But she sees the impact of electric vehicles (EVs) and renewables on the grid as two pieces of an energy puzzle she wants to solve.The U.S. Department of Energy reports that the number of public and private EV charging ports nearly doubled in the past three years, and many more are in the works. Users expect to plug in at their convenience, charge up, and drive away. But what if the grid can’t handle it?Electricity demand, long stagnant in the United States, has spiked due to EVs, data centers that drive artificial intelligence, and industry. Grid planners forecast an increase of 2.6 percent to 4.7 percent in electricity demand over the next five years, according to data reported to federal regulators. Everyone from EV charging-station operators to utility-system operators needs help navigating a system in flux.That’s where Liu’s work comes in.Liu, who is studying mathematics and electrical engineering and computer science (EECS), is interested in distribution — how to get electricity from a centralized location to consumers. “I see power systems as a good venue for theoretical research as an application tool,” she says. “I’m interested in it because I’m familiar with the optimization and probability techniques used to map this level of problem.”Liu grew up in Beijing, then after middle school moved with her parents to Canada and enrolled in a prep school in Oakville, Ontario, 30 miles outside Toronto.Liu stumbled upon an opportunity to take part in a regional math competition and eventually started a math club, but at the time, the school’s culture surrounding math surprised her. Being exposed to what seemed to be some students’ aversion to math, she says, “I don’t think my feelings about math changed. I think my feelings about how people feel about math changed.”Liu brought her passion for math to MIT. The summer after her sophomore year, she took on the first of the two Undergraduate Research Opportunity Program projects she completed with electric power system expert Marija Ilić, a joint adjunct professor in EECS and a senior research scientist at the MIT Laboratory for Information and Decision Systems.Predicting the gridSince 2022, with the help of funding from the MIT Energy Initiative (MITEI), Liu has been working with Ilić on identifying ways in which the grid is challenged.One factor is the addition of renewables to the energy pipeline. A gap in wind or sun might cause a lag in power generation. If this lag occurs during peak demand, it could mean trouble for a grid already taxed by extreme weather and other unforeseen events.If you think of the grid as a network of dozens of interconnected parts, once an element in the network fails — say, a tree downs a transmission line — the electricity that used to go through that line needs to be rerouted. This may overload other lines, creating what’s known as a cascade failure.“This all happens really quickly and has very large downstream effects,” Liu says. “Millions of people will have instant blackouts.”Even if the system can handle a single downed line, Liu notes that “the nuance is that there are now a lot of renewables, and renewables are less predictable. You can’t predict a gap in wind or sun. When such things happen, there’s suddenly not enough generation and too much demand. So the same kind of failure would happen, but on a larger and more uncontrollable scale.”Renewables’ varying output has the added complication of causing voltage fluctuations. “We plug in our devices expecting a voltage of 110, but because of oscillations, you will never get exactly 110,” Liu says. “So even when you can deliver enough electricity, if you can’t deliver it at the specific voltage level that is required, that’s a problem.”Liu and Ilić are building a model to predict how and when the grid might fail. Lacking access to privatized data, Liu runs her models with European industry data and test cases made available to universities. “I have a fake power grid that I run my experiments on,” she says. “You can take the same tool and run it on the real power grid.”Liu’s model predicts cascade failures as they evolve. Supply from a wind generator, for example, might drop precipitously over the course of an hour. The model analyzes which substations and which households will be affected. “After we know we need to do something, this prediction tool can enable system operators to strategically intervene ahead of time,” Liu says.Dictating price and powerLast year, Liu turned her attention to EVs, which provide a different kind of challenge than renewables.In 2022, S&P Global reported that lawmakers argued that the U.S. Federal Energy Regulatory Commission’s (FERC) wholesale power rate structure was unfair for EV charging station operators.In addition to operators paying by the kilowatt-hour, some also pay more for electricity during peak demand hours. Only a few EVs charging up during those hours could result in higher costs for the operator even if their overall energy use is low.Anticipating how much power EVs will need is more complex than predicting energy needed for, say, heating and cooling. Unlike buildings, EVs move around, making it difficult to predict energy consumption at any given time. “If users don’t like the price at one charging station or how long the line is, they’ll go somewhere else,” Liu says. “Where to allocate EV chargers is a problem that a lot of people are dealing with right now.”One approach would be for FERC to dictate to EV users when and where to charge and what price they’ll pay. To Liu, this isn’t an attractive option. “No one likes to be told what to do,” she says.Liu is looking at optimizing a market-based solution that would be acceptable to top-level energy producers — wind and solar farms and nuclear plants — all the way down to the municipal aggregators that secure electricity at competitive rates and oversee distribution to the consumer.Analyzing the location, movement, and behavior patterns of all the EVs driven daily in Boston and other major energy hubs, she notes, could help demand aggregators determine where to place EV chargers and how much to charge consumers, akin to Walmart deciding how much to mark up wholesale eggs in different markets.Last year, Liu presented the work at MITEI’s annual research conference. This spring, Liu and Ilić are submitting a paper on the market optimization analysis to a journal of the Institute of Electrical and Electronics Engineers.Liu has come to terms with her early introduction to attitudes toward STEM that struck her as markedly different from those in China. She says, “I think the (prep) school had a very strong ‘math is for nerds’ vibe, especially for girls. There was a ‘why are you giving yourself more work?’ kind of mentality. But over time, I just learned to disregard that.”After graduation, Liu, the only undergraduate researcher in Ilić’s MIT Electric Energy Systems Group, plans to apply to fellowships and graduate programs in EECS, applied math, and operations research.Based on her analysis, Liu says that the market could effectively determine the price and availability of charging stations. Offering incentives for EV owners to charge during the day instead of at night when demand is high could help avoid grid overload and prevent extra costs to operators. “People would still retain the ability to go to a different charging station if they chose to,” she says. “I’m arguing that this works.” More

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      Bringing sustainable and affordable electricity to all

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      When MIT electrical engineer Reja Amatya PhD ’12 arrived in Rwanda in 2015, she was whisked off to a village. She saw that diesel generators provided power to the local health center, bank, and shops, but like most of rural Rwanda, Karambi’s 200 homes did not have electricity. Amatya knew the hilly terrain would make it challenging to connect the village to high-voltage lines from the capital, Kigali, 50 kilometers away.

      While many consider electricity a basic human right, there are places where people have never flipped a light switch. Among the United Nations’ Sustainable Development Goals is global access to affordable, reliable, and sustainable energy by 2030. Recently, the U.N. reported that progress in global electrification had slowed due to the challenge of reaching those hardest to reach.

      Researchers from the MIT Energy Initiative (MITEI) and Comillas Pontifical University in Madrid created Waya Energy Inc., a Cambridge, Massachusetts-based startup commercializing MIT-developed planning and analysis software, to help governments determine the most cost-effective ways to provide electricity to all their citizens.

      The researchers’ 2015 trip to Rwanda marked the beginning of four years of phone calls, Zoom meetings, and international travel to help the east African country — still reeling from the 1994 genocide that killed more than a million people — develop a national electrification strategy and extend its power infrastructure.

      Amatya, Waya president and one of five Waya co-founders, knew that electrifying Karambi and the rest of the country would provide new opportunities for work, education, and connections — and the ability to charge cellphones, often an expensive and inconvenient undertaking.

      To date, Waya — with funding from the Asian Development Bank, the African Development Bank, the Inter-American Development Bank for Latin America, and the World Bank — has helped governments develop electrification plans in 22 countries on almost every continent, including in refugee camps in sub-Saharan Africa’s Sahel and Chad regions, where violence has led to 3 million internally displaced people.

      “With a modeling and visualization tool like ours, we are able to look at the entire spectrum of need and demand and say, ‘OK, what might be the most optimized solution?’” Amatya says.

      More than 15 graduate students and researchers from MIT and Comillas contributed to the development of Waya’s software under the supervision of Robert Stoner, the interim director at MITEI, and Ignacio Pérez-Arriaga, a visiting professor at the MIT Sloan School of Management from Comillas. Pérez-Arriaga looks at how changing electricity use patterns have forced utilities worldwide to rethink antiquated business models.

      The team’s Reference Electrification Model (REM) software pulls information from population density maps, satellite images, infrastructure data, and geospatial points of interest to determine where extending the grid will be most cost-effective and where other solutions would be more practical.

      “I always say we are agnostic to the technology,” Amatya says. “Traditionally, the only way to provide long-term reliable access was through the grid, but that’s changing. In many developing countries, there are many more challenges for utilities to provide reliable service.”

      Off-grid solutions

      Waya co-founder Stoner, who is also the founding director of the MIT Tata Center for Technology and Design, recognized early on that connecting homes to existing infrastructure was not always economically feasible. What’s more, billions of people with grid connections had unreliable access due to uneven regulation and challenging terrain.

      With Waya co-founders Andres Gonzalez-Garcia, a MITEI affiliate researcher, and Professor Fernando de Cuadra Garcia of Comillas, Pérez-Arriaga and Stoner led a team that developed a set of principles to guide universal regional electrification. Their approach — which they dubbed the Integrated Distribution Framework — incorporates elements of optimal planning as well as novel business models and regulation. Getting all three right is “necessary,” Stoner says, “if you want a viable long-term outcome.”

      Amatya says, “Initially, we designed REM to understand what the level of demand is in these countries with very rural and poor populations, and what the system should look like to serve it. We took a lot of that input into developing the model.” In 2019, Waya was created to commercialize the software and add consulting to the package of services the team provides.

      Now, in addition to advising governments and regulators on how to expand existing grids, Waya proposes options such as a mini-grid, powered by renewables like wind, hydropower, or solar, to serve single villages or large-scale mini-grid solutions for larger areas. In some cases, an even more localized, scalable solution is a mesh grid, which might consist of a single solar panel for a few houses that, over time, can be expanded and ultimately connected to the main grid.

      The REM software has been used to design off-grid systems for remote and mountainous regions in Uganda, Peru, Nigeria, Cambodia, Indonesia, India, and elsewhere. When Tata Power, India’s largest integrated power company, saw how well mini-grids would serve parts of east India, the company created a mini-grid division called Tata Renewables.

      Amatya notes that the REM software enables her to come up with an entire national electrification plan from her workspace in Cambridge. But site visits and on-the-ground partners are critical in helping the Waya team understand existing systems, engage with clients to assess demand, and identify stakeholders. In Haiti, an energy consultant reported that the existing grid had typically been operational only six out of every 24 hours. In Karambi, University of Rwanda students surveyed the village’s 200 families and helped lead a community-wide meeting.

      Waya connects with on-the-ground experts and agencies “who can engage directly with the government and other stakeholders, because many times those are the doors that we knock on,” Amatya says. “Local energy ministries, utilities, and regulators have to be open to regulatory change. They have to be open to working with financial institutions and new technology.”

      The goals of regulators, energy providers, funding agencies, and government officials must align in real time “to provide reliable access to energy for a billion people,” she says.

      Moving past challenges

      Growing up in Kathmandu, Amatya used to travel to remote villages with her father, an electrical engineer who designed cable systems for landlines for Nepal Telecom. She remembers being fascinated by the high-voltage lines crisscrossing Nepal on these trips. Now, she points out utility poles to her children and explains how the distribution lines carry power from local substations to customers.

      After majoring in engineering science and physics at Smith College, Amatya completed her PhD in electrical engineering at MIT in 2012. Within two years, she was traveling to off-grid communities in India as a research scientist exploring potential technologies for providing access. There were unexpected challenges: At the time, digitized geospatial data didn’t exist for many regions. In India in 2013, the team used phones to take pictures of paper maps spread out on tables. Team members now scour digital data available through Facebook, Google, Microsoft, and other sources for useful geographical information. 

      It’s one thing to create a plan, Amatya says, but how it gets utilized and implemented becomes a big question. With all the players involved — funding agencies, elected officials, utilities, private companies, and regulators within the countries themselves — it’s sometimes hard to know who’s responsible for next steps.

      “Besides providing technical expertise, our team engages with governments to, let’s say, develop a financial plan or an implementation plan,” she says. Ideally, Waya hopes to stay involved with each project long enough to ensure that its proposal becomes the national electrification strategy of the country. That’s no small feat, given the multiple players, the opaque nature of government, and the need to enact a regulatory framework where none may have existed.

      For Rwanda, Waya identified areas without service, estimated future demand, and proposed the most cost-effective ways to meet that demand with a mix of grid and off-grid solutions. Based on the electrification plan developed by the Waya team, officials have said they hope to have the entire country electrified by 2024.

      In 2017, by the time the team submitted its master plan, which included an off-grid solution for Karambi, Amatya was surprised to learn that electrification in the village had already occurred — an example, she says, of the challenging nature of local planning.

      Perhaps because of Waya’s focus and outreach efforts, Karambi had become a priority. However it happened, Amatya is happy that Karambi’s 200 families finally have access to electricity. More

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      Preparing global online learners for the clean energy transition

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      After a career devoted to making the electric power system more efficient and resilient, Marija Ilic came to MIT in 2018 eager not just to extend her research in new directions, but to prepare a new generation for the challenges of the clean-energy transition.

      To that end, Ilic, a senior research scientist in MIT’s Laboratory for Information and Decisions Systems (LIDS) and a senior staff member at Lincoln Laboratory in the Energy Systems Group, designed an edX course that captures her methods and vision: Principles of Modeling, Simulation, and Control for Electric Energy Systems.

      EdX is a provider of massive open online courses produced in partnership with MIT, Harvard University, and other leading universities. Ilic’s class made its online debut in June 2021, running for 12 weeks, and it is one of an expanding set of online courses funded by the MIT Energy Initiative (MITEI) to provide global learners with a view of the shifting energy landscape.

      Ilic first taught a version of the class while a professor at Carnegie Mellon University, rolled out a second iteration at MIT just as the pandemic struck, and then revamped the class for its current online presentation. But no matter the course location, Ilic focuses on a central theme: “With the need for decarbonization, which will mean accommodating new energy sources such as solar and wind, we must rethink how we operate power systems,” she says. “This class is about how to pose and solve the kinds of problems we will face during this transformation.”

      Hot global topic

      The edX class has been designed to welcome a broad mix of students. In summer 2021, more than 2,000 signed up from 109 countries, ranging from high school students to retirees. In surveys, some said they were drawn to the class by the opportunity to advance their knowledge of modeling. Many others hoped to learn about the move to decarbonize energy systems.

      “The energy transition is a hot topic everywhere in the world, not just in the U.S.,” says teaching assistant Miroslav Kosanic. “In the class, there were veterans of the oil industry and others working in investment and finance jobs related to energy who wanted to understand the potential impacts of changes in energy systems, as well as students from different fields and professors seeking to update their curricula — all gathered into a community.”

      Kosanic, who is currently a PhD student at MIT in electrical engineering and computer science, had taken this class remotely in the spring semester of 2021, while he was still in college in Serbia. “I knew I was interested in power systems, but this course was eye-opening for me, showing how to apply control theory and to model different components of these systems,” he says. “I finished the course and thought, this is just the beginning, and I’d like to learn a lot more.” Kosanic performed so well online that Ilic recruited him to MIT, as a LIDS researcher and edX course teaching assistant, where he grades homework assignments and moderates a lively learner community forum.

      A platform for problem-solving

      The course starts with fundamental concepts in electric power systems operations and management, and it steadily adds layers of complexity, posing real-world problems along the way. Ilic explains how voltage travels from point to point across transmission lines and how grid managers modulate systems to ensure that enough, but not too much, electricity flows. “To deliver power from one location to the next one, operators must constantly make adjustments to ensure that the receiving end can handle the voltage transmitted, optimizing voltage to avoid overheating the wires,” she says.

      In her early lectures, Ilic notes the fundamental constraints of current grid operations, organized around a hierarchy of regional managers dealing with a handful of very large oil, gas, coal, and nuclear power plants, and occupied primarily with the steady delivery of megawatt-hours to far-flung customers. But historically, this top-down structure doesn’t do a good job of preventing loss of energy due to sub-optimal transmission conditions or due to outages related to extreme weather events.

      These issues promise to grow for grid operators as distributed resources such as solar and wind enter the picture, Ilic tells students. In the United States, under new rules dictated by the Federal Energy Regulatory Commission, utilities must begin to integrate the distributed, intermittent electricity produced by wind farms, solar complexes, and even by homes and cars, which flows at voltages much lower than electricity produced by large power plants.

      Finding ways to optimize existing energy systems and to accommodate low- and zero-carbon energy sources requires powerful new modes of analysis and problem-solving. This is where Ilic’s toolbox comes in: a mathematical modeling strategy and companion software that simplifies the input and output of electrical systems, no matter how large or how small. “In the last part of the course, we take up modeling different solutions to electric service in a way that is technology-agnostic, where it only matters how much a black-box energy source produces, and the rates of production and consumption,” says Ilic.

      This black-box modeling approach, which Ilic pioneered in her research, enables students to see, for instance, “what is happening with their own household consumption, and how it affects the larger system,” says Rupamathi Jaddivada PhD ’20, a co-instructor of the edX class and a postdoc in electrical engineering and computer science. “Without getting lost in details of current or voltage, or how different components work, we think about electric energy systems as dynamical components interacting with each other, at different spatial scales.” This means that with just a basic knowledge of physical laws, high school and undergraduate students can take advantage of the course “and get excited about cleaner and more reliable energy,” adds Ilic.

      What Jaddivada and Ilic describe as “zoom in, zoom out” systems thinking leverages the ubiquity of digital communications and the so-called “internet of things.” Energy devices of all scales can link directly to other devices in a network instead of just to a central operations hub, allowing for real-time adjustments in voltage, for instance, vastly improving the potential for optimizing energy flows.

      “In the course, we discuss how information exchange will be key to integrating new end-to-end energy resources and, because of this interactivity, how we can model better ways of controlling entire energy networks,” says Ilic. “It’s a big lesson of the course to show the value of information and software in enabling us to decarbonize the system and build resilience, rather than just building hardware.”

      By the end of the course, students are invited to pursue independent research projects. Some might model the impact of a new energy source on a local grid or investigate different options for reducing energy loss in transmission lines.

      “It would be nice if they see that we don’t have to rely on hardware or large-scale solutions to bring about improved electric service and a clean and resilient grid, but instead on information technologies such as smart components exchanging data in real time, or microgrids in neighborhoods that sustain themselves even when they lose power,” says Ilic. “I hope students walk away convinced that it does make sense to rethink how we operate our basic power systems and that with systematic, physics-based modeling and IT methods we can enable better, more flexible operation in the future.”

      This article appears in the Autumn 2021 issue of Energy Futures, the magazine of the MIT Energy Initiative More

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      Coupling power and hydrogen sector pathways to benefit decarbonization

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      Governments and companies worldwide are increasing their investments in hydrogen research and development, indicating a growing recognition that hydrogen could play a significant role in meeting global energy system decarbonization goals. Since hydrogen is light, energy-dense, storable, and produces no direct carbon dioxide emissions at the point of use, this versatile energy carrier has the potential to be harnessed in a variety of ways in a future clean energy system.

      Often considered in the context of grid-scale energy storage, hydrogen has garnered renewed interest, in part due to expectations that our future electric grid will be dominated by variable renewable energy (VRE) sources such as wind and solar, as well as decreasing costs for water electrolyzers — both of which could make clean, “green” hydrogen more cost-competitive with fossil-fuel-based production. But hydrogen’s versatility as a clean energy fuel also makes it an attractive option to meet energy demand and to open pathways for decarbonization in hard-to-abate sectors where direct electrification is difficult, such as transportation, buildings, and industry.

      “We’ve seen a lot of progress and analysis around pathways to decarbonize electricity, but we may not be able to electrify all end uses. This means that just decarbonizing electricity supply is not sufficient, and we must develop other decarbonization strategies as well,” says Dharik Mallapragada, a research scientist at the MIT Energy Initiative (MITEI). “Hydrogen is an interesting energy carrier to explore, but understanding the role for hydrogen requires us to study the interactions between the electricity system and a future hydrogen supply chain.”

      In a recent paper, researchers from MIT and Shell present a framework to systematically study the role and impact of hydrogen-based technology pathways in a future low-carbon, integrated energy system, taking into account interactions with the electric grid and the spatio-temporal variations in energy demand and supply. The developed framework co-optimizes infrastructure investment and operation across the electricity and hydrogen supply chain under various emissions price scenarios. When applied to a Northeast U.S. case study, the researchers find this approach results in substantial benefits — in terms of costs and emissions reduction — as it takes advantage of hydrogen’s potential to provide the electricity system with a large flexible load when produced through electrolysis, while also enabling decarbonization of difficult-to-electrify, end-use sectors.

      The research team includes Mallapragada; Guannan He, a postdoc at MITEI; Abhishek Bose, a graduate research assistant at MITEI; Clara Heuberger-Austin, a researcher at Shell; and Emre Gençer, a research scientist at MITEI. Their findings are published in the journal Energy & Environmental Science.

      Cross-sector modeling

      “We need a cross-sector framework to analyze each energy carrier’s economics and role across multiple systems if we are to really understand the cost/benefits of direct electrification or other decarbonization strategies,” says He.

      To do that analysis, the team developed the Decision Optimization of Low-carbon Power-HYdrogen Network (DOLPHYN) model, which allows the user to study the role of hydrogen in low-carbon energy systems, the effects of coupling the power and hydrogen sectors, and the trade-offs between various technology options across both supply chains — spanning production, transport, storage, and end use, and their impact on decarbonization goals.

      “We are seeing great interest from industry and government, because they are all asking questions about where to invest their money and how to prioritize their decarbonization strategies,” says Gençer. Heuberger-Austin adds, “Being able to assess the system-level interactions between electricity and the emerging hydrogen economy is of paramount importance to drive technology development and support strategic value chain decisions. The DOLPHYN model can be instrumental in tackling those kinds of questions.”

      For a predefined set of electricity and hydrogen demand scenarios, the model determines the least-cost technology mix across the power and hydrogen sectors while adhering to a variety of operation and policy constraints. The model can incorporate a range of technology options — from VRE generation to carbon capture and storage (CCS) used with both power and hydrogen generation to trucks and pipelines used for hydrogen transport. With its flexible structure, the model can be readily adapted to represent emerging technology options and evaluate their long-term value to the energy system.

      As an important addition, the model takes into account process-level carbon emissions by allowing the user to add a cost penalty on emissions in both sectors. “If you have a limited emissions budget, we are able to explore the question of where to prioritize the limited emissions to get the best bang for your buck in terms of decarbonization,” says Mallapragada.

      Insights from a case study

      To test their model, the researchers investigated the Northeast U.S. energy system under a variety of demand, technology, and carbon price scenarios. While their major conclusions can be generalized for other regions, the Northeast proved to be a particularly interesting case study. This region has current legislation and regulatory support for renewable generation, as well as increasing emission-reduction targets, a number of which are quite stringent. It also has a high demand for energy for heating — a sector that is difficult to electrify and could particularly benefit from hydrogen and from coupling the power and hydrogen systems.

      The researchers find that when combining the power and hydrogen sectors through electrolysis or hydrogen-based power generation, there is more operational flexibility to support VRE integration in the power sector and a reduced need for alternative grid-balancing supply-side resources such as battery storage or dispatchable gas generation, which in turn reduces the overall system cost. This increased VRE penetration also leads to a reduction in emissions compared to scenarios without sector-coupling. “The flexibility that electricity-based hydrogen production provides in terms of balancing the grid is as important as the hydrogen it is going to produce for decarbonizing other end uses,” says Mallapragada. They found this type of grid interaction to be more favorable than conventional hydrogen-based electricity storage, which can incur additional capital costs and efficiency losses when converting hydrogen back to power. This suggests that the role of hydrogen in the grid could be more beneficial as a source of flexible demand than as storage.

      The researchers’ multi-sector modeling approach also highlighted that CCS is more cost-effective when utilized in the hydrogen supply chain, versus the power sector. They note that counter to this observation, by the end of the decade, six times more CCS projects will be deployed in the power sector than for use in hydrogen production — a fact that emphasizes the need for more cross-sectoral modeling when planning future energy systems.

      In this study, the researchers tested the robustness of their conclusions against a number of factors, such as how the inclusion of non-combustion greenhouse gas emissions (including methane emissions) from natural gas used in power and hydrogen production impacts the model outcomes. They find that including the upstream emissions footprint of natural gas within the model boundary does not impact the value of sector coupling in regards to VRE integration and cost savings for decarbonization; in fact, the value actually grows because of the increased emphasis on electricity-based hydrogen production over natural gas-based pathways.

      “You cannot achieve climate targets unless you take a holistic approach,” says Gençer. “This is a systems problem. There are sectors that you cannot decarbonize with electrification, and there are other sectors that you cannot decarbonize without carbon capture, and if you think about everything together, there is a synergistic solution that significantly minimizes the infrastructure costs.”

      This research was supported, in part, by Shell Global Solutions International B.V. in Amsterdam, the Netherlands, and MITEI’s Low-Carbon Energy Centers for Electric Power Systems and Carbon Capture, Utilization, and Storage. More