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

Alexandra Lüth, Yannick Werner, Ruud Egging-Bratseth, Jalal Kazempour

Research output: Working paperResearch

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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.
Original languageEnglish
Place of PublicationFrederiksberg
PublisherCopenhagen Business School [wp]
Number of pages38
Publication statusPublished - 2022
SeriesWorking Paper / Department of Economics. Copenhagen Business School
Number13-2022
SeriesCSEI Working Paper
Number2022-06

Keywords

  • Energy islands
  • Offshore energy hub
  • Flexibility resources
  • Bidding zones
  • Hydrogen

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