Investments in green hydrogen as a flexibility source for the European power system by 2050: Does it pay off?

Mohammadreza Ahang, Pedro Crespo del Granado and Asgeir Tomasgard

Applied Energy, 2025, vol. 378, issue PA, No S0306261924020397

Abstract: The European Union aims to deploy a high share of renewable energy sources in Europe’s power system by 2050. Large-scale intermittent wind and solar power production requires flexibility to ensure an adequate supply–demand balance. Green hydrogen (GH) can increase power systems’ flexibility and decrease renewable energy production’s curtailment. However, investing in GH is costly and dependent on electricity prices, which are important for operational costs in electrolysis. Moreover, the use of GH for power system flexibility might not be economically viable if there is no hydrogen demand from the hydrogen market. If so, questions would arise as to, what would be the incentives to introduce GH as a source of flexibility in the power system, and how would electrolyzer costs, hydrogen demand, and other factors affect the economic viability of GH usage for power system flexibility. The paper implements a European power system model formulated as a stochastic program to address these questions. The authors use the model to compare various instances with hydrogen in the power system to a no-hydrogen instance. The results indicate that by 2050 deployment of approximately 140 GW of GH will pay off investments and make the technology economically viable. We find that the price of hydrogen is estimated to be around €30/MWh.

Keywords: Energy system model; Flexibility in power systems; Green hydrogen; Energy transition; Capacity expansion (search for similar items in EconPapers)
Date: 2025
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0306261924020397
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:appene:v:378:y:2025:i:pa:s0306261924020397

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/bibliographic
http://www.elsevier. ... 405891/bibliographic

DOI: 10.1016/j.apenergy.2024.124656

Access Statistics for this article

Applied Energy is currently edited by J. Yan

More articles in Applied Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().