How the interplay between grid characteristics and renewable resources determines optimal temporal correlation for grid-connected hydrogen certification

Designing interoperable and trusted certification schemes is critical to enable trade in so-called “green” commodities like hydrogen and should avoid imposing onerous reporting requirements or inflating production costs. As certification schemes develop around the world, the criteria under which grid electricity can be defined as “renewable” will have important implications for production cost and true emissions from grid-connected hydrogen production. Here we show that the impact of temporal correlation settings on emissions and electrolyser profitability is determined by the interplay between the quality of the local renewable resources and characteristics of regional electricity grids. We focus on Australia as a potential exporter of large volumes of low-emissions hydrogen and model hybrid hydrogen production systems powered by a mix of renewable and grid electricity under different temporal correlation settings at over 330 different locations. We find that yearly time matching provides a balance between providing accurate certification of zero emissions hydrogen and increasing costs under Australian PGO scheme. In high-cost grids, lowest-cost hydrogen is produced at sites with good renewable resources and producers are incentivized to develop new renewable energy capacity. Conversely, only very stringent temporal correlation is sufficient to limit actual emissions below zero in grids where electricity prices are low and this increases production costs significantly. Moreover, tightening the temporal correlation rules at a later date will not expose first-mover projects to the disproportionate cost penalties. Instead, overly restrictive temporal correlation may limit the opportunity to design flexible configurations, resulting in overly conservative systems that reduce cost-effectiveness.