  Green hydrogen can help to decarbonize parts of the transportation sector,
but its power sector interactions are not well understood. It may contribute to
integrating variable renewable energy sources if production is sufficiently
flexible in time. Using an open-source co-optimization model of the power
sector and four options for supplying hydrogen at German filling stations, we
find a trade-off between energy efficiency and temporal flexibility: for lower
shares of renewables and hydrogen, more energy-efficient and less flexible
small-scale on-site electrolysis is optimal. For higher shares of renewables
and/or hydrogen, more flexible but less energy-efficient large-scale hydrogen
supply chains gain importance as they allow disentangling hydrogen production
from demand via storage. Liquid hydrogen emerges as particularly beneficial,
followed by liquid organic hydrogen carriers and gaseous hydrogen. Large-scale
hydrogen supply chains can deliver substantial power sector benefits, mainly
through reduced renewable surplus generation. Energy modelers and system
planners should consider the distinct flexibility characteristics of hydrogen
supply chains in more detail when assessing the role of green hydrogen in
future energy transition scenarios.
