Electrolysis as a Flexibility Resource on Energy Islands: The Case of the North Sea

Alexandra Lüth (), Yannick Werner (), Rudolf Egging-Bratseth and Jalal Kazempour ()
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Alexandra Lüth: Department of Economics, Copenhagen Business School, Postal: Copenhagen Business School, Department of Economics, Porcelaenshaven 16 A. 1. floor, DK-2000 Frederiksberg, Denmark, https://www.cbs.dk/en/research/departments-and-centres/staff/aleco
Yannick Werner: Technical University of Denmark
Jalal Kazempour: Technical University of Denmark, https://orbit.dtu.dk/en/persons/jalal-kazempour

No 13-2022, Working Papers from Copenhagen Business School, Department of Economics

Abstract: Energy islands are meant to facilitate offshore sector integration by combining offshore wind energy with power-to-x technologies and storage. In this study, we investigate the operation of electrolysers on energy islands: We assess the potential flexibility contribution of the elec-trolyser and then analyse different market integration strategies of the islands. We develop a two-stage stochastic optimisation model to find the cost-efficient dispatch for an integrated day-ahead and balancing electricity market. For the market integration of the energy island we align our approach to the current debate and compare the case of a single offshore bidding zone to a case where the energy island is integrated into a home market zone. We find that electrolysers on energy islands will run at low capacity factors and provide flexibility in 26–30 % of their run time. In addition, offshore electrolysers produce more hydrogen when they are allocated to an offshore bidding zone, and thus earn higher profits. We conclude that combining offshore wind with electrolysers on an energy island relies on additional economic incentives if their main role is envisioned to be the delivery of balancing flexibility.

Keywords: Energy islands; Offshore energy hub; Flexibility resources; Bidding zones; Hydrogen (search for similar items in EconPapers)
JEL-codes: C44 C61 C63 D47 L94 L95 Q41 Q42 Q48 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2022-08-29
New Economics Papers: this item is included in nep-ene
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Citations: View citations in EconPapers (1)

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