Hydrogen Storage for Wind Parks - A Real Options Evaluation for an Optimal Investment in More Flexibility

Daniel Kroniger () and Reinhard Madlener
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Daniel Kroniger: RWTH Aachen University, Postal: Templergraben 55, 52056 Aachen, Germany

No 3/2013, FCN Working Papers from E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)

Abstract: In this paper, we investigate the economic viability of hydrogen storage for excess electricity produced in wind power plants. To this end, we define two scenarios and use both Monte Carlo simulation and real options analysis. The use of hydrogen as a storage medium helps to increase capacity utilization of the wind parks; in the case of disconnection of the wind park (grid overload, grid stability considerations), the investor can also offer system-relevant services by producing reserve energy. It also allows temporal arbitrage, i.e. the purchasing of electrical energy at low spot market prices in order to generate hydrogen, and the selling of electricity that is generated from hydrogen at high spot market prices. Finally, system services can be offered in the form of minute reserve.

Keywords: Wind power; hydrogen storage; real options analysis; optimal investment decision-making (search for similar items in EconPapers)
Pages: 47 pages
Date: 2013-02
New Economics Papers: this item is included in nep-ene
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Citations: View citations in EconPapers (3)

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Journal Article: Hydrogen storage for wind parks: A real options evaluation for an optimal investment in more flexibility (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:fcnwpa:2013_003

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