Comparative Economic Optimization for an Overseas Hydrogen Supply Chain Using Mixed-Integer Linear Programming

Abstract

As environmental problems become serious, many countries have been striving to change fossil-based energy to renewable and sustainable hydrogen energy. However, there are large capacity differences for each country's hydrogen production, making hydrogen trading necessary. Although extensive research has investigated hydrogen technologies and economics, to the best of our knowledge, no study has examined the optimization of the overall hydrogen supply chain, from overseas supply to domestic consumption, considering various feasibility scenarios. This is a case study on the hydrogen supply chain for South Korea, which is expected to be one of the major hydrogen-importing countries, considering the decarbonized hydrogen requirements of the importing country and the production capacities of exporting countries over two decades. This study's optimized results for a hydrogen supply chain via mixed-integer linear programming reveal that it is most feasible for South Korea to import blue hydrogen from Qatar and Russia and green hydrogen from UAE and India, using liquefied hydrogen in the near term. This is because of the significantly lesser resource prices compared to other countries. The share of blue hydrogen supply dominates in the near term, while the green hydrogen supply is expected to gradually prevail over blue hydrogen due to an exponential drop in the renewable electricity price. With the price drop of green hydrogen, green hydrogen purchases from other countries in tandem with the UAE are predicted, rather than the blue hydrogen supply, considering that long-term demand will exceed the UAE's predicted capacity.