Optimizing site selection for hydrogen production in Iceland

While the world energy demand is steadily growing, the concern for the environmental aspects of energy use and natural resource exploitation has increased. A new market has emerged for renewable energy, often referred to as “green energy”. This paper presents an optimization model developed as part of a feasibility study on the idea of exporting renewable energy in the form of hydrogen, from Iceland to the continent of Europe.The goal is to find the most economical ways of producing hydrogen solely via electrolysis from water, using electricity from hydro and geothermal power.The mixed integer programming model presented here facilitates the search for optimal choices from the 23 potential power plants, 11 of which are based on geothermal sources, and 12 are hydropower stations. The best locations for hydrogen production are in the southwest region of Iceland and the least expensive hydrogen production is at energy demand between 2 and 4 TWh/yr. At lower demand, the cost of energy is relatively higher, due to inefficient use of power plants and transfer lines. At higher demand, the cost of constructing new power transfer lines increases, leading to higher overall energy costs.