Optimal design of sustainable power-to-fuels supply chains for seasonal energy storage

Energy storage is key in enabling high penetration of intermittent renewable sources into the energy supply mix. One attractive way of storing energy is to do so in the form of chemical fuels produced from electricity, also referred to as “power-to-fuels”. Apart from its promise for large-scale seasonal energy storage, it also has advantages at the supply chain level due to the ease of transportation. Therefore, these fuels have been proposed as energy carriers for various applications. In this work, these potential benefits are assessed by optimizing the design of power-to-fuels supply chains for seasonal energy storage over large geographical regions. Distribution decisions are integrated with hourly production decisions over the time horizon of a year in order to account for seasonal changes and obtain plant capacities suitable for time-varying operation. A heuristic decomposition approach is developed to solve industrial-scale instances of the resulting optimization problem. The proposed framework is applied to a region of Spain where the energy transition is particularly significant due to the decommissioning of coal-based power generation facilities. The results show how an efficient power-to-fuels supply chain can help replace conventional with renewable energy sources.