Hydrogen Storage for Wind Parks - A Real Options Evaluation for an Optimal Investment in More Flexibility
In this paper, we investigate the economic viability of hydrogen storage for excess electricity produced in wind power plants. To this end, we define two scenarios and use both Monte Carlo simulation and real options analysis. The use of hydrogen as a storage medium helps to increase capacity utilization of the wind parks; in the case of disconnection of the wind park (grid overload, grid stability considerations), the investor can also offer system-relevant services by producing reserve energy. It also allows temporal arbitrage, i.e. the purchasing of electrical energy at low spot market prices in order to generate hydrogen, and the selling of electricity that is generated from hydrogen at high spot market prices. Finally, system services can be offered in the form of minute reserve.
|Date of creation:||Feb 2013|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.eonerc.rwth-aachen.de/fcn|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Venetsanos, Konstantinos & Angelopoulou, Penelope & Tsoutsos, Theocharis, 2002. "Renewable energy sources project appraisal under uncertainty: the case of wind energy exploitation within a changing energy market environment," Energy Policy, Elsevier, vol. 30(4), pages 293-307, March.
- Boomsma, Trine Krogh & Meade, Nigel & Fleten, Stein-Erik, 2012. "Renewable energy investments under different support schemes: A real options approach," European Journal of Operational Research, Elsevier, vol. 220(1), pages 225-237.
- Myers, Stewart C., 1977. "Determinants of corporate borrowing," Journal of Financial Economics, Elsevier, vol. 5(2), pages 147-175, November.
- Robert McDonald & Daniel Siegel, 1986. "The Value of Waiting to Invest," The Quarterly Journal of Economics, Oxford University Press, vol. 101(4), pages 707-727.
- Hasan, Nor Shahida & Hassan, Mohammad Yusri & Majid, Md Shah & Rahman, Hasimah Abdul, 2013. "Review of storage schemes for wind energy systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 21(C), pages 237-247.
- Muche, Thomas, 2009. "A real option-based simulation model to evaluate investments in pump storage plants," Energy Policy, Elsevier, vol. 37(11), pages 4851-4862, November.
- Juckenack, Sören & Madlener, Reinhard, 2011. "Optimal Time to Start Serial Production: The Case of the Direct Drive Wind Turbine of Siemens Wind Power A/S," FCN Working Papers 6/2011, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
- Bøckman, Thor & Fleten, Stein-Erik & Juliussen, Erik & Langhammer, Håvard J. & Revdal, Ingemar, 2008.
"Investment timing and optimal capacity choice for small hydropower projects,"
European Journal of Operational Research,
Elsevier, vol. 190(1), pages 255-267, October.
- Bøckman, Thor & Fleten, Stein-Erik & Juliussen, Erik & Langhammer, Håvard & Revdal, Ingemar, 2006. "Investment timing and optimal capacity choice for small hydropower projects," MPRA Paper 2693, University Library of Munich, Germany, revised 31 Dec 2006.
- Khan, M.J. & Iqbal, M.T., 2009. "Analysis of a small wind-hydrogen stand-alone hybrid energy system," Applied Energy, Elsevier, vol. 86(11), pages 2429-2442, November.
- Zoulias, E.I. & Lymberopoulos, N., 2007. "Techno-economic analysis of the integration of hydrogen energy technologies in renewable energy-based stand-alone power systems," Renewable Energy, Elsevier, vol. 32(4), pages 680-696.
- van Benthem, A.A. & Kramer, G.J. & Ramer, R., 2006. "An options approach to investment in a hydrogen infrastructure," Energy Policy, Elsevier, vol. 34(17), pages 2949-2963, November.
- Black, Fischer & Scholes, Myron S, 1973. "The Pricing of Options and Corporate Liabilities," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 637-54, May-June.
- Madlener, Reinhard & Latz, Jochen, 2013. "Economics of centralized and decentralized compressed air energy storage for enhanced grid integration of wind power," Applied Energy, Elsevier, vol. 101(C), pages 299-309.
- Díaz-González, Francisco & Sumper, Andreas & Gomis-Bellmunt, Oriol & Villafáfila-Robles, Roberto, 2012. "A review of energy storage technologies for wind power applications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(4), pages 2154-2171.
- Elverhøi, Morten & Fleten, Stein-Erik & Fuss, Sabine & Heggedal, Ane Marte & Szolgayova, Jana & Troland, Ole Christian, 2010. "Evaluation of hydropower upgrade projects - a real options approach," MPRA Paper 23005, University Library of Munich, Germany.
- Rombauts, Yannick & Delarue, Erik & D’haeseleer, William, 2011. "Optimal portfolio-theory-based allocation of wind power: Taking into account cross-border transmission-capacity constraints," Renewable Energy, Elsevier, vol. 36(9), pages 2374-2387.
When requesting a correction, please mention this item's handle: RePEc:ris:fcnwpa:2013_003. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hendrik Schmitz)
If references are entirely missing, you can add them using this form.