Scandinavian Working Papers in Economics
Working Papers,
Copenhagen Business School, Department of Economics
No 13-2022: Electrolysis as a Flexibility Resource on Energy Islands: The Case of the North Sea
Alexandra Lüth (), Yannick Werner (), Ruud Egging-Bratseth () and Jalal Kazempour ()
Additional contact information
Alexandra Lüth: Department of Economics, Copenhagen Business School, Postal: Copenhagen Business School, Department of Economics, Porcelaenshaven 16 A. 1. floor, DK-2000 Frederiksberg, Denmark
Yannick Werner: Technical University of Denmark
Ruud Egging-Bratseth: Norwegian University of Science and Technology
Jalal Kazempour: Technical University of Denmark
Abstract: Energy islands are meant to facilitate offshore sector integration by combining offshore wind energy with power-to-x technologies and storage. In this study, we investigate the operation of electrolysers on energy islands: We assess the potential flexibility contribution of the elec-trolyser and then analyse different market integration strategies of the islands. We develop a two-stage stochastic optimisation model to find the cost-efficient dispatch for an integrated day-ahead and balancing electricity market. For the market integration of the energy island we align our approach to the current debate and compare the case of a single offshore bidding zone to a case where the energy island is integrated into a home market zone. We find that electrolysers on energy islands will run at low capacity factors and provide flexibility in 26–30 % of their run time. In addition, offshore electrolysers produce more hydrogen when they are allocated to an offshore bidding zone, and thus earn higher profits. We conclude that combining offshore wind with electrolysers on an energy island relies on additional economic incentives if their main role is envisioned to be the delivery of balancing flexibility.
Keywords: Energy islands; Offshore energy hub; Flexibility resources; Bidding zones; Hydrogen
JEL-codes: C44; C61; C63; D47; L94; L95; Q41; Q42; Q48
Language: English
38 pages, August 29, 2022
Full text files
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