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Turning the wind into hydrogen: The long-run impact on electricity prices and generating capacity

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  • Green, Richard
  • Hu, Helen
  • Vasilakos, Nicholas

Abstract

Hydrogen production via electrolysis has been proposed as a way of absorbing the fluctuating electricity generated by wind power, potentially allowing the use of cheap electricity at times when it would otherwise be in surplus. We show that large-scale adoption of electrolysers would change the shape of the load-duration curve for electricity, affecting the optimal capacity mix. Nuclear power stations will replace gas-fired power stations, as they are able to run for longer periods of time. Changes in the electricity capacity mix will be much greater than changes to the pattern of prices. The long-run supply price of hydrogen will thus tend to be insensitive to the amount produced.

Suggested Citation

  • Green, Richard & Hu, Helen & Vasilakos, Nicholas, 2011. "Turning the wind into hydrogen: The long-run impact on electricity prices and generating capacity," Energy Policy, Elsevier, vol. 39(7), pages 3992-3998, July.
    • Handle: RePEc:eee:enepol:v:39:y:2011:i:7:p:3992-3998
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    References listed on IDEAS

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    1. Richard Green & Nicholas Vasilakos, 2012. "Storing Wind for a Rainy Day: What Kind of Electricity Does Denmark Export?," The Energy Journal, , vol. 33(3), pages 1-22, July.
    2. Green, Richard & Vasilakos, Nicholas, 2010. "Market behaviour with large amounts of intermittent generation," Energy Policy, Elsevier, vol. 38(7), pages 3211-3220, July.
    3. Offer, G.J. & Howey, D. & Contestabile, M. & Clague, R. & Brandon, N.P., 2010. "Comparative analysis of battery electric, hydrogen fuel cell and hybrid vehicles in a future sustainable road transport system," Energy Policy, Elsevier, vol. 38(1), pages 24-29, January.
    4. Richard Green & Nicholas Vasilakos, 2011. "The Long-term Impact of Wind Power on Electricity Prices and Generating Capacity," Discussion Papers 11-09, Department of Economics, University of Birmingham.
    5. Korpås, Magnus & Greiner, Christopher J., 2008. "Opportunities for hydrogen production in connection with wind power in weak grids," Renewable Energy, Elsevier, vol. 33(6), pages 1199-1208.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Blarke, Morten B., 2012. "Towards an intermittency-friendly energy system: Comparing electric boilers and heat pumps in distributed cogeneration," Applied Energy, Elsevier, vol. 91(1), pages 349-365.
    2. Caumon, Pauline & Lopez-Botet Zulueta, Miguel & Louyrette, Jérémy & Albou, Sandrine & Bourasseau, Cyril & Mansilla, Christine, 2015. "Flexible hydrogen production implementation in the French power system: Expected impacts at the French and European levels," Energy, Elsevier, vol. 81(C), pages 556-562.
    3. Bahramian, Pejman & Jenkins, Glenn P. & Milne, Frank, 2021. "The displacement impacts of wind power electricity generation: Costly lessons from Ontario," Energy Policy, Elsevier, vol. 152(C).
    4. van Leeuwen, Charlotte & Mulder, Machiel, 2018. "Power-to-gas in electricity markets dominated by renewables," Applied Energy, Elsevier, vol. 232(C), pages 258-272.
    5. Abadie, Luis Mª & Chamorro, José M., 2023. "Investment in wind-based hydrogen production under economic and physical uncertainties," Applied Energy, Elsevier, vol. 337(C).
    6. Mansilla, C. & Louyrette, J. & Albou, S. & Bourasseau, C. & Dautremont, S., 2013. "Economic competitiveness of off-peak hydrogen production today – A European comparison," Energy, Elsevier, vol. 55(C), pages 996-1001.
    7. Ruhnau, Oliver, 2022. "How flexible electricity demand stabilizes wind and solar market values: The case of hydrogen electrolyzers," Applied Energy, Elsevier, vol. 307(C).
    8. Roach, Martin & Meeus, Leonardo, 2020. "The welfare and price effects of sector coupling with power-to-gas," Energy Economics, Elsevier, vol. 86(C).
    9. Schlund, David & Theile, Philipp, 2021. "Simultaneity of green energy and hydrogen production: Analysing the dispatch of a grid-connected electrolyser," EWI Working Papers 2021-10, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    10. Schlund, David & Theile, Philipp, 2022. "Simultaneity of green energy and hydrogen production: Analysing the dispatch of a grid-connected electrolyser," Energy Policy, Elsevier, vol. 166(C).
    11. Azcárate, Cristina & Blanco, Rosa & Mallor, Fermín & Garde, Raquel & Aguado, Mónica, 2012. "Peaking strategies for the management of wind-H2 energy systems," Renewable Energy, Elsevier, vol. 47(C), pages 103-111.
    12. Michiel Kenis & Vladimir Dvorkin & Tim Schittekatte & Kenneth Bruninx & Erik Delarue & Audun Botterud, 2024. "Evaluating Offshore Electricity Market Design Considering Endogenous Infrastructure Investments: Zonal or Nodal?," Papers 2405.13169, arXiv.org.

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