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Hydrogen Storage for Wind Parks - A Real Options Evaluation for an Optimal Investment in More Flexibility

  • Kroniger, Daniel


    (RWTH Aachen University)

  • Madlener, Reinhard


    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

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.

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Paper provided by E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN) in its series FCN Working Papers with number 3/2013.

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Length: 47 pages
Date of creation: Feb 2013
Date of revision:
Handle: RePEc:ris:fcnwpa:2013_003
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  1. 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.
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  6. 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.
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  9. 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).
  10. 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.
  11. 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.
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  14. 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.
  15. 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.
  16. 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.
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