IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v328y2022ics0306261922014192.html
   My bibliography  Save this article

Integrated modelling of European electricity and hydrogen markets

Author

Listed:
  • Hesel, Philipp
  • Braun, Sebastian
  • Zimmermann, Florian
  • Fichtner, Wolf

Abstract

In 2020, the European Commission published a hydrogen strategy announcing different policy measures to support the construction of a European hydrogen infrastructure. Hereby, a target of 40GW installed electrolyser capacity within the EU by 2030 was set, which will cause a significant electricity demand and will link together hydrogen and electricity markets. Therefore, state-of-the-art power modelling must include both electricity and hydrogen. This work proposes a novel approach to integrate hydrogen in existing long-term optimization electricity market dispatch models. A comprehensive modification of the optimization framework is not necessary as the hydrogen market can be modelled in analogy to the electricity market. This is done by implementing hydrogen markets as additional zones within the model with their own hydrogen demands and production. Thus, a hydrogen layer next to the existing electricity layer is created. Next to the dispatch model, hydrogen generation technologies are integrated into a system dynamics investment module, which is interlinked with the optimization model and determines market-driven investments in power plants based on the NPV. As a support scheme for electrolysers, carbon contracts for difference are implemented. Further, a detailed analysis of the German hydrogen and electricity markets is carried out. The analysis shows that renewable energy sources and electrolysers are complementary technologies, which mutually increase their profitability. The model indicates that higher electricity demands caused by electrolysers will not lead to higher electricity prices but reduce the price volatility.

Suggested Citation

  • Hesel, Philipp & Braun, Sebastian & Zimmermann, Florian & Fichtner, Wolf, 2022. "Integrated modelling of European electricity and hydrogen markets," Applied Energy, Elsevier, vol. 328(C).
    • Handle: RePEc:eee:appene:v:328:y:2022:i:c:s0306261922014192
    DOI: 10.1016/j.apenergy.2022.120162
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261922014192
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2022.120162?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hajjaji, Noureddine & Pons, Marie-Noëlle & Houas, Ammar & Renaudin, Viviane, 2012. "Exergy analysis: An efficient tool for understanding and improving hydrogen production via the steam methane reforming process," Energy Policy, Elsevier, vol. 42(C), pages 392-399.
    2. Li, Sheng & Zhang, Xiaosong & Gao, Lin & Jin, Hongguang, 2012. "Learning rates and future cost curves for fossil fuel energy systems with CO2 capture: Methodology and case studies," Applied Energy, Elsevier, vol. 93(C), pages 348-356.
    3. Böhm, Hans & Zauner, Andreas & Rosenfeld, Daniel C. & Tichler, Robert, 2020. "Projecting cost development for future large-scale power-to-gas implementations by scaling effects," Applied Energy, Elsevier, vol. 264(C).
    4. Lux, Benjamin & Pfluger, Benjamin, 2020. "A supply curve of electricity-based hydrogen in a decarbonized European energy system in 2050," Applied Energy, Elsevier, vol. 269(C).
    5. Teufel, Felix & Miller, Michael & Genoese, Massimo & Fichtner, Wolf, 2013. "Review of System Dynamics models for electricity market simulations," Working Paper Series in Production and Energy 2, Karlsruhe Institute of Technology (KIT), Institute for Industrial Production (IIP).
    6. Koirala, Binod & Hers, Sebastiaan & Morales-España, Germán & Özdemir, Özge & Sijm, Jos & Weeda, Marcel, 2021. "Integrated electricity, hydrogen and methane system modelling framework: Application to the Dutch Infrastructure Outlook 2050," Applied Energy, Elsevier, vol. 289(C).
    7. Lacko, R. & Drobnič, B. & Mori, M. & Sekavčnik, M. & Vidmar, M., 2014. "Stand-alone renewable combined heat and power system with hydrogen technologies for household application," Energy, Elsevier, vol. 77(C), pages 164-170.
    8. Finon, Dominique, 1974. "Optimisation model for the French energy sector," Energy Policy, Elsevier, vol. 2(2), pages 136-151, June.
    9. Buttler, Alexander & Spliethoff, Hartmut, 2018. "Current status of water electrolysis for energy storage, grid balancing and sector coupling via power-to-gas and power-to-liquids: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 2440-2454.
    10. Messner, Sabine & Schrattenholzer, Leo, 2000. "MESSAGE–MACRO: linking an energy supply model with a macroeconomic module and solving it iteratively," Energy, Elsevier, vol. 25(3), pages 267-282.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Singer, Gerald & Köll, Rebekka & Aichhorn, Lukas & Pertl, Patrick & Trattner, Alexander, 2023. "Utilizing hydrogen pressure energy by expansion machines – PEM fuel cells in mobile and other potential applications," Applied Energy, Elsevier, vol. 343(C).
    2. Christoph Loschan & Daniel Schwabeneder & Matthias Maldet & Georg Lettner & Hans Auer, 2023. "Hydrogen as Short-Term Flexibility and Seasonal Storage in a Sector-Coupled Electricity Market," Energies, MDPI, vol. 16(14), pages 1-35, July.
    3. Lifeng Du & Yanmei Yang & Luli Zhou & Min Liu, 2024. "Greenhouse Gas Reduction Potential and Economics of Green Hydrogen via Water Electrolysis: A Systematic Review of Value-Chain-Wide Decarbonization," Sustainability, MDPI, vol. 16(11), pages 1-37, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. George, Jan Frederick & Müller, Viktor Paul & Winkler, Jenny & Ragwitz, Mario, 2022. "Is blue hydrogen a bridging technology? - The limits of a CO2 price and the role of state-induced price components for green hydrogen production in Germany," Energy Policy, Elsevier, vol. 167(C).
    2. Després, Jacques & Hadjsaid, Nouredine & Criqui, Patrick & Noirot, Isabelle, 2015. "Modelling the impacts of variable renewable sources on the power sector: Reconsidering the typology of energy modelling tools," Energy, Elsevier, vol. 80(C), pages 486-495.
    3. Kim, Sunwoo & Choi, Yechan & Park, Joungho & Adams, Derrick & Heo, Seongmin & Lee, Jay H., 2024. "Multi-period, multi-timescale stochastic optimization model for simultaneous capacity investment and energy management decisions for hybrid Micro-Grids with green hydrogen production under uncertainty," Renewable and Sustainable Energy Reviews, Elsevier, vol. 190(PA).
    4. Christoph Sejkora & Johannes Lindorfer & Lisa Kühberger & Thomas Kienberger, 2021. "Interlinking the Renewable Electricity and Gas Sectors: A Techno-Economic Case Study for Austria," Energies, MDPI, vol. 14(19), pages 1-38, October.
    5. Lim, Dongjun & Lee, Boreum & Lee, Hyunjun & Byun, Manhee & Lim, Hankwon, 2022. "Projected cost analysis of hybrid methanol production from tri-reforming of methane integrated with various water electrolysis systems: Technical and economic assessment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 155(C).
    6. David Borge-Diez & Enrique Rosales-Asensio & Emin Açıkkalp & Daniel Alonso-Martínez, 2023. "Analysis of Power to Gas Technologies for Energy Intensive Industries in European Union," Energies, MDPI, vol. 16(1), pages 1-22, January.
    7. Möst, Dominik & Perlwitz, Holger, 2009. "Prospects of gas supply until 2020 in Europe and its relevance for the power sector in the context of emission trading," Energy, Elsevier, vol. 34(10), pages 1510-1522.
    8. Koponen, Joonas & Ruuskanen, Vesa & Hehemann, Michael & Rauls, Edward & Kosonen, Antti & Ahola, Jero & Stolten, Detlef, 2020. "Effect of power quality on the design of proton exchange membrane water electrolysis systems," Applied Energy, Elsevier, vol. 279(C).
    9. Möst, Dominik & Fichtner, Wolf, 2010. "Renewable energy sources in European energy supply and interactions with emission trading," Energy Policy, Elsevier, vol. 38(6), pages 2898-2910, June.
    10. Qi, Meng & Park, Jinwoo & Landon, Robert Stephen & Kim, Jeongdong & Liu, Yi & Moon, Il, 2022. "Continuous and flexible Renewable-Power-to-Methane via liquid CO2 energy storage: Revisiting the techno-economic potential," Renewable and Sustainable Energy Reviews, Elsevier, vol. 153(C).
    11. Gábor Pörzse & Zoltán Csedő & Máté Zavarkó, 2021. "Disruption Potential Assessment of the Power-to-Methane Technology," Energies, MDPI, vol. 14(8), pages 1-21, April.
    12. Gawlick, Julia & Hamacher, Thomas, 2023. "Impact of coupling the electricity and hydrogen sector in a zero-emission European energy system in 2050," Energy Policy, Elsevier, vol. 180(C).
    13. Keles, Dogan & Möst, Dominik & Fichtner, Wolf, 2011. "The development of the German energy market until 2030--A critical survey of selected scenarios," Energy Policy, Elsevier, vol. 39(2), pages 812-825, February.
    14. Chen, Xiaoyuan & Chen, Yu & Zhang, Mingshun & Jiang, Shan & Gou, Huayu & Pang, Zhou & Shen, Boyang, 2021. "Hospital-oriented quad-generation (HOQG)—A combined cooling, heating, power and gas (CCHPG) system," Applied Energy, Elsevier, vol. 300(C).
    15. Hurtubia, Byron & Sauma, Enzo, 2021. "Economic and environmental analysis of hydrogen production when complementing renewable energy generation with grid electricity," Applied Energy, Elsevier, vol. 304(C).
    16. Ikäheimo, Jussi & Weiss, Robert & Kiviluoma, Juha & Pursiheimo, Esa & Lindroos, Tomi J., 2022. "Impact of power-to-gas on the cost and design of the future low-carbon urban energy system," Applied Energy, Elsevier, vol. 305(C).
    17. Mohideen, Mohamedazeem M. & Subramanian, Balachandran & Sun, Jingyi & Ge, Jing & Guo, Han & Radhamani, Adiyodi Veettil & Ramakrishna, Seeram & Liu, Yong, 2023. "Techno-economic analysis of different shades of renewable and non-renewable energy-based hydrogen for fuel cell electric vehicles," Renewable and Sustainable Energy Reviews, Elsevier, vol. 174(C).
    18. Ikäheimo, Jussi & Lindroos, Tomi J. & Kiviluoma, Juha, 2023. "Impact of climate and geological storage potential on feasibility of hydrogen fuels," Applied Energy, Elsevier, vol. 342(C).
    19. Rubio Rodríguez, M.A. & Ruyck, J. De & Díaz, P. Roque & Verma, V.K. & Bram, S., 2011. "An LCA based indicator for evaluation of alternative energy routes," Applied Energy, Elsevier, vol. 88(3), pages 630-635, March.
    20. Razmi, Amir Reza & Hanifi, Amir Reza & Shahbakhti, Mahdi, 2023. "Design, thermodynamic, and economic analyses of a green hydrogen storage concept based on solid oxide electrolyzer/fuel cells and heliostat solar field," Renewable Energy, Elsevier, vol. 215(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:328:y:2022:i:c:s0306261922014192. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.