Valuation of Combined Wind Power Plant and Hydrogen Storage: A Decision Tree Approach

Schuster, Martin; Walther, Thomas (2017): Valuation of Combined Wind Power Plant and Hydrogen Storage: A Decision Tree Approach, in: IEEE Xplore: Proceedings of the 14th International Conference on the European Energy Market (EEM), Dresden 2017, pp. 1-6. DOI: 10.1109/EEM.2017.7981912 ©2017 IEEE

6 Pages Posted: 25 Feb 2020

See all articles by Martin Schuster

Martin Schuster

Dresden University of Technology - Chair of Finance and Finacial Services

Thomas Walther

Utrecht University - School of Economics; Dresden University of Technology - Faculty of Economics and Business Management

Date Written: July 17, 2017

Abstract

This article analyses the profitability of a wind power plant in combination with a hydrogen storage. We distinguish between off- and on-shore locations with a 50 MW unit. The hydrogen of the storage unit can be used to either be re-electrified or directly marketed. The study analyses the profitability of a combination of power-plant and hydrogen storages under different scenarios. The profitability is measured by means of the Decision Tree Approach. This approach allows combining different paths of Discounted Cash Flow calculations under various scenarios and accounts for uncertainties of investment decisions. Our results show that re-electrification is not profitable under any scenario in our framework (Germany). On the contrary, wholesale of hydrogen can lead to positive returns, depending on the underlying parameters, regardless of the location of the power plant.

Keywords: Hydrogen Storage, Wind Power Plants, Decision Tree Approach, Discounted Cash Flow Analysis

Suggested Citation

Schuster, Martin and Walther, Thomas, Valuation of Combined Wind Power Plant and Hydrogen Storage: A Decision Tree Approach (July 17, 2017). Schuster, Martin; Walther, Thomas (2017): Valuation of Combined Wind Power Plant and Hydrogen Storage: A Decision Tree Approach, in: IEEE Xplore: Proceedings of the 14th International Conference on the European Energy Market (EEM), Dresden 2017, pp. 1-6. DOI: 10.1109/EEM.2017.7981912 ©2017 IEEE, Available at SSRN: https://ssrn.com/abstract=3524862

Martin Schuster

Dresden University of Technology - Chair of Finance and Finacial Services ( email )

Dresden
Germany

Thomas Walther (Contact Author)

Utrecht University - School of Economics ( email )

Kriekenpitplein 21-22
Adam Smith Building
Utrecht, +31 30 253 7373 3584 EC
Netherlands

HOME PAGE: http://www.thomas-walther.info

Dresden University of Technology - Faculty of Economics and Business Management ( email )

Mommsenstrasse 13
Dresden, D-01062
Germany

HOME PAGE: http://www.tu-dresden.de/wiwi/finance

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