Optimization of baseload electricity and hydrogen services by renewables for a nuclear-sized district in South Italy

Abstract

We present an optimization model of an energy district in South Italy that supplies baseload electricity and hydrogen services. The district is sized such that a nuclear reactor could provide these services. We define scenarios for 2050 to explore the system effects of discount rate sensitivity, vetoes on technologies, and cost uncertainties. We address the following issues relevant to decarbonization in South Italy: land-based wind and solar vs. exclusive solar rooftop, extra cost of a veto on nuclear, conservative assumptions on future storage technology and the role of pumped hydro storage, lack of low-cost geological storage of hydrogen and the industrial competitiveness of this carrier, and the methanation synergy with the agroforestry sector. Our results quantify the high system cost of vetoes on land-based wind and solar. Nuclear may enter the optimal mix only with a veto against onshore wind and a hypothesis of equal project risk, hence an equal discount rate, with renewables. Scenarios with land-based wind and solar obtain low-cost hydrogen and thus allow industrial uses for this carrier. The methanation synergy with the agroforestry sector does not offer a system cost advantage but improves the district’s configuration. The extra cost of full decarbonization relative to unregulated fossil gas is small with land-based wind and solar, and significant with vetoes to these technologies.