Economically Optimal Operation of a Power-to-Hydrogen/Gas Unit as a Balancing Services Provider

The ongoing transition in energy systems from fossil fuels to renewable sources of energy has resulted in a growing uncertainty in all levels of the energy value chain. It has consequently increased the need for higher integration of flexibility technologies to allow for maintaining the secure and reliable operation of the energy systems. Power-to-Hydrogen/Gas (P2HG) technologies are considered as a source of flexibility in power systems. This paper aims to investigate an economically efficient operation of a P2HG unit that is connected to power, gas, oxygen, hydrogen and water infrastructures and is interacting with the respective markets. To this end, it introduces an optimization model that seeks to maximize the profit of the P2HG from participating in various markets considering price forecast uncertainties. The simulation results demonstrate the effectiveness of the proposed approach in containing the impact of price forecast, in the context of the Dutch resources market environment. A key observation is that providing balancing services to the power system accounts for a major share of the revenue of the P2HG unit. It is concluded that under the assumption made, the P2HG unit can have a positive business case in which market revenues fully cover the investment and operational costs of the unit.