A Techno-Economic analysis of combined Hydrogen and Battery systems participating with Ancillary services in SE4

Abstract

The electricity demand in Sweden is expected to double between 2022 and 2035 and the majority of the new electricity is expected to come from wind energy. As intermittent energy increases, so does the need for energy storage that can balance the supply and demand for energy.

Batteries can offer short-term energy storage and their fast response time enables them to offer ancillary services on short notice. Hydrogen storage is another promising type of energy storage that is suitable for long-term storage. By combining hydrogen and batteries, a durable storage with high flexibility is achieved.

In this thesis, a techno-economic analysis of a combined hydrogen and battery system that participates with ancillary services in SE4 is made. This is done through making two models in Excel: a base model that operates based on the spot price and a frequency reserve model based on ancillary service prices. The models are divided into three system sizes, influenced by the planned hydrogen systems in Trelleborg.

The results show that the component costs follows economy of scale, with the large system being the most cost-effective. It is found that participating with ancillary drastically increases the profit of the systems, especially when offering the service FCR. When participating with ancillary services, the battery stands for a large share of the income for the system. It is also seen that utilizing the hydrogen is more beneficial than using a fuel cell. Utilizing bi-products from the hydrogen system was found to further increase profit. Figure 1 shows a summary of the results achieved in the thesis.

Popular Abstract

To offer capacity to remove or add electricity on the grid generates an income which makes an investment go from unprofitable to profitable. It also generates a more stable electricity supply to the grid.

The electricity demand in Sweden is expected to double within a ten-year period, and the expansion of the supply is predicted to be mostly through wind power. This leads to Sweden’s electricity grid being weather dependent and an electricity demand that might not correlate with the electricity being produced. Batteries and hydrogen are two types of energy storage that can help stabilize the electricity grid. Batteries can charge during high electricity production and low demand, and then vice versa. When storing energy in the form of hydrogen the electrical energy is converted into chemical energy. Hydrogen can be produced using water and energy. The energy is used to split the water into oxygen and hydrogen, a process called electrolysis. Similar to a battery, hydrogen is produced when there is a low demand and high production. The process of producing hydrogen can be reversed, and then water and energy are the products. When producing hydrogen not all the electrical energy becomes chemical energy, some of it is released as heat. It is the same for the reversed process, some of the chemical energy becomes heat. This heat can be utilized and added to a district heating network.

Offering capacity, either to remove or add electricity on the grid, can generate income and this is a part of what the thesis is investigating. The thesis analyses how a combination of a hydrogen system and a battery can be a part of stabilizing the grid, the technology needed and an economic analysis. This is done by making two models, one that does not offer capacity and the components only operate from/until a set electricity price. The other model is based on offering capacity to the grid. The models are divided into three systems with different purposes and sizes. Two smaller systems, with the purpose of providing the connected
building/buildings with low electricity prices and one of them is expected to add resilience to a building in case of power outages. The third system has the purpose of producing hydrogen which will be sold to a nearby fuel station.

The results of the thesis indicate that the price of the combined system is affected by economy of scale, the bigger system is more cost effective than the smaller. To offer capacity to the electricity grid is shown to be crucial for the system to have an annual profit. The battery has a large effect on the profit, when offering capacity, it increases it drastically and the opposite when not offering capacity. The importance of extracting hydrogen from the storage frequently is shown to affect the profit greatly, as it allows for more hydrogen being produced. The results also show that using the hydrogen is more profitable than converting it
back to electricity. The utilization of heat adds an extra profit and more of the initial energy is utilized.

• author: Rapp, Sofia and Lenntoft, Elin
• supervisor: Martin Andersson
• organization: Department of Energy Sciences
• course: MVKM01 20241
• year: 2024
• type: H2 - Master's Degree (Two Years)
• subject: Technology and Engineering
• keywords: Hydrogen Technology, Electrolyzer, Fuel Cell, Battery, Ancillary Services, Electricity Markets, Power Balancing, Balancing Markets, District Heating, Heat Utilization, Flexibility, Optimization, LCOH, PEMEC, Li-ion, PEMFC
• report number: LUTMDN/TMHP-24/5584-SE
• ISSN: 0282-1990
• language: English
• id: 9166866
• date added to LUP: 2024-06-24 12:11:55
• date last changed: 2024-06-24 12:11:55