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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. Green, Richard & Vasilakos, Nicholas, 2010. "Market behaviour with large amounts of intermittent generation," Energy Policy, Elsevier, vol. 38(7), pages 3211-3220, July.
    2. Richard Green and Nicholas Vasilakos, 2012. "Storing Wind for a Rainy Day: What Kind of Electricity Does Denmark Export?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    3. 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.
    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. 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.
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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. Pejman Bahramian & Glenn Jenkins & Frank Milne, 2020. "The Displacement Impacts of Wind Power Electricity Generation: Costly Lessons from Ontario," Working Paper 1440, Economics Department, Queen's University.
    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. 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.
    6. Roach, Martin & Meeus, Leonardo, 2020. "The welfare and price effects of sector coupling with power-to-gas," Energy Economics, Elsevier, vol. 86(C).
    7. 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.

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