Economic evaluation of a power-to-hydrogen system providing frequency regulation reserves: a case study of Denmark

Yi Zheng, Chunjun Huang*, Shi You, Yi Zong

*Corresponding author for this work

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Operating costs are dominant in the hydrogen production of a power-to-hydrogen system. An optimal operational strategy or bidding framework is effective in reducing these costs. However, it is still found that the production cost of hydrogen is high. As the electrolysis unit is characterized by high flexibility, providing ancillary service to the grid becomes a potential pathway for revenue stacking. Recent research has demonstrated the feasibility of providing such a service, but the related economics have not been well evaluated. In this work, we propose a comprehensive operation model to enable participation in the day-head, balancing and reserve markets. Three types of reserves are considered by using different operational constraints. Based on the proposed operation framework, we assess the economic performance of a power-to-hydrogen system in Denmark using plentiful actual market data. The results reveal that providing frequency containment reserve and automatic frequency restoration reserve efficiently raises the operational contribution margins. In parallel, by investing in the cash flows, net present value, and break-even hydrogen prices, we conclude that providing reserves makes the power-to-hydrogen project more profitable in the studied period and region.
Original languageEnglish
JournalInternational Journal of Hydrogen Energy
Issue number67
Pages (from-to)26046-26057
Number of pages12
Publication statusPublished - 2023


  • Power to hydrogen
  • Frequency regulation reserve
  • Automatic frequency restoration reserve
  • Manual frequency restoration reserve
  • Mixed integer programming


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