Exploiting synergies in European wind and hydrogen sectors: A cost-benefit assessment

Abstract

This article outlines an assessment of the perspectives for exploiting synergies between European wind and hydrogen energy sectors, where wind energy conversion to hydrogen is used as a common strategy for reducing network management costs in high wind energy penetration situations, and for production of renewable hydrogen. The attractiveness of this approach, referred to here as a “wind-hydrogen strategy”, is analysed using a cost-benefit approach to evaluate the final impact at the level of the end-consumer when this strategy is implemented. The analysis is conducted for four scenarios, based on different levels of: wind energy penetration in the electricity network area, hydrogen energy price, and environmental taxation on fuels. The effect of technological learning on the outcome is also analysed for the period up to 2050. The results of the analysis indicate that the relative value of the wind energy in the electricity market compared to the hydrogen market is a deciding factor in the attractiveness of the strategy; here the wind energy penetration in the network is a key consideration. Finally, in order to exploit learning effects from linking European wind and hydrogen sectors, action would need to be taken in the short term.