Hydrogen Storage for Wind Parks: A Real Options Evaluation for an Optimal Investment in More Flexibility
FCN Working Paper No. 3/2013
47 Pages Posted: 14 Oct 2013
Date Written: February 2013
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.
Keywords: Wind power, hydrogen storage, real options analysis, optimal investment decision-making
Suggested Citation: Suggested Citation