SOPHIAA (Stochastic Optimization for Producing Hydrogen and Investment in Associated Assets) is a model developed at EWI that optimizes the production of renewable hydrogen in compliance with regulatory requirements. SOPHIAA is a stochastic linear optimization model that minimizes the levelized cost of hydrogen (LCOH) by determining the optimal dimensioning and operation of key system components, including electrolyzers, storage capacities (batteries and hydrogen), and portfolios of power purchase agreements (PPAs). Interaction with the day-ahead electricity market is also possible. In SOPHIAA, stochasticity is incorporated through multiple weather time series, ensuring the system is optimally designed to be robust against weather-related uncertainties. The schematic of SOPHIAA is shown below.
Hydrogen production costs and PPA portfolios for variants of the RFNBO criteria
SOPHIAA can be used to calculate hydrogen production costs and optimal PPA portfolios for different regulatory requirements. The key aspect is the EU’s delegated act defining renewable hydrogen as a Renewable Fuel of Non-Biological Origin (RFNBO), which stipulates that, in most cases, the electricity used for electrolysis must be sourced from renewable energy through PPAs. Different requirements apply to PPAs (in particular additionality, temporal and geographical correlation), which influence hydrogen production costs. Depending on the requirements and preferences of the producer, optimal portfolios for PPAs and storage capacities can be calculated. Various assets are available for this purpose, which can be varied depending on the analysis. We consider PPAs from PV and wind energy (onshore and offshore), as well as capacities from battery and hydrogen storage (above-ground, cavern, and pore storage). Possible purchases and sales on the day-ahead market are included. For the PPA portfolios, 44 potential locations across Germany are considered to analyze the effects of regional diversification. Analyses for sites outside Germany can also be conducted, and additional assets may be incorporated into the model individually.
Optimal operational planning and time series
In addition to dimensioning, SOPHIAA optimizes the operation of all components over an entire calendar year. The base load requirements of the delivered hydrogen profile can be varied. Operations are simulated for several possible weather years in order to analyze risks. The day-ahead market is also taken into account through sales of surplus electricity from PPAs and purchases, as far as regulations allow.
Data basis
We use time series for PV and wind energy at 44 German locations from 45 historical weather years. This allows us to stochastically simulate the availability of PPA electricity from PV and wind energy at 44 German locations. For each historical weather year, we create a synthetic, hourly electricity price time series for the German bidding zone based on the hourly residual load and other parameters. Alternatively, historical price time series can be used.
