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Potential of new business models for grid integrated water electrolysis

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  • Larscheid, Patrick
  • Lück, Lara
  • Moser, Albert

Abstract

Grid integrated water electrolysers have the potential of coupling electric power systems subjected to high shares of renewable energy sources with sectors of hydrogen demand, thus contributing to European decarbonization goals in future. We therefore investigate the business potential of future electrolyser applications in cross-commodity arbitrage trading by applying a complex power market simulation method for future scenarios and different European countries. Based on this, we evaluate the potential of additional provision of grid services towards grid operators in order to increase the electrolyser utilization ratio. For this, we use a method that identifies measures of transmission grid operators in order to ensure secure grid operation. In this context, uncertain hydrogen prices and different sectors of hydrogen demand are addressed through sensitivities of different hydrogen sales prices. The analysis shows a high dependency of business model efficiency on the hydrogen price. While cross-commodity arbitrage trading can achieve profitability for the transportation sector, applications for the industry sector and natural gas system are less efficient. The results however indicate that for these less efficient applications grid service provision can be an option of increasing the electrolyser utilization ratio thus increasing its profitability.

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  • Larscheid, Patrick & Lück, Lara & Moser, Albert, 2018. "Potential of new business models for grid integrated water electrolysis," Renewable Energy, Elsevier, vol. 125(C), pages 599-608.
    • Handle: RePEc:eee:renene:v:125:y:2018:i:c:p:599-608
    DOI: 10.1016/j.renene.2018.02.074
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    1. Hobbie, Hannes & Lieberwirth, Martin, 2022. "Impact of hydrogen deployment scenarios on the economic effciency of electricity transmission system operation: A model-based case study for the German market area," EconStor Preprints 262112, ZBW - Leibniz Information Centre for Economics.
    2. Samuel Simon Araya & Vincenzo Liso & Xiaoti Cui & Na Li & Jimin Zhu & Simon Lennart Sahlin & Søren Højgaard Jensen & Mads Pagh Nielsen & Søren Knudsen Kær, 2020. "A Review of The Methanol Economy: The Fuel Cell Route," Energies, MDPI, vol. 13(3), pages 1-32, January.
    3. 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).
    4. Yue, Meiling & Lambert, Hugo & Pahon, Elodie & Roche, Robin & Jemei, Samir & Hissel, Daniel, 2021. "Hydrogen energy systems: A critical review of technologies, applications, trends and challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 146(C).
    5. Zhao, Jin & Patwary, Ataul Karim & Qayyum, Abdul & Alharthi, Majed & Bashir, Furrukh & Mohsin, Muhammad & Hanif, Imran & Abbas, Qaiser, 2022. "The determinants of renewable energy sources for the fueling of green and sustainable economy," Energy, Elsevier, vol. 238(PC).
    6. Layritz, Lucia S. & Dolganova, Iulia & Finkbeiner, Matthias & Luderer, Gunnar & Penteado, Alberto T. & Ueckerdt, Falko & Repke, Jens-Uwe, 2021. "The potential of direct steam cracker electrification and carbon capture & utilization via oxidative coupling of methane as decarbonization strategies for ethylene production," Applied Energy, Elsevier, vol. 296(C).
    7. Lieberwirth, Martin & Hobbie, Hannes, 2022. "Decarbonizing the Industry Sector and its Effect on Electricity Transmission Grid Operation - Implications from a Model Based Analysis for Germany," EconStor Preprints 261839, ZBW - Leibniz Information Centre for Economics.
    8. Zheng, Yi & You, Shi & Huang, Chunjun & Jin, Xin, 2023. "Model-based economic analysis of off-grid wind/hydrogen systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 187(C).
    9. Chien, FengSheng & Ngo, Quang-Thanh & Hsu, Ching-Chi & Chau, Ka Yin & Mohsin, Muhammad, 2021. "Assessing the capacity of renewable power production for green energy system: a way forward towards zero carbon electrification," MPRA Paper 109667, University Library of Munich, Germany.
    10. Fokkema, Jan Eise & uit het Broek, Michiel A.J. & Schrotenboer, Albert H. & Land, Martin J. & Van Foreest, Nicky D., 2022. "Seasonal hydrogen storage decisions under constrained electricity distribution capacity," Renewable Energy, Elsevier, vol. 195(C), pages 76-91.
    11. Fan Li & Dong Liu & Ke Sun & Songheng Yang & Fangzheng Peng & Kexin Zhang & Guodong Guo & Yuan Si, 2024. "Towards a Future Hydrogen Supply Chain: A Review of Technologies and Challenges," Sustainability, MDPI, vol. 16(5), pages 1-36, February.
    12. Lin, Haiyang & Wu, Qiuwei & Chen, Xinyu & Yang, Xi & Guo, Xinyang & Lv, Jiajun & Lu, Tianguang & Song, Shaojie & McElroy, Michael, 2021. "Economic and technological feasibility of using power-to-hydrogen technology under higher wind penetration in China," Renewable Energy, Elsevier, vol. 173(C), pages 569-580.
    13. Hobbie, Hannes & Lieberwirth, Martin, 2024. "Compounding or Curative? Investigating the impact of electrolyzer deployment on congestion management in the German power grid," Energy Policy, Elsevier, vol. 185(C).

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