Electrolysis as a flexibility resource on energy islands: The case of the North Sea

Energy islands are meant to facilitate offshore sector integration by combining offshore wind energy with power-to-x technologies and storage. In this study, we investigate the operation of electrolysers on energy islands, assess their potential contribution to flexibility provision, and analyse different market integration strategies of the islands. For this purpose, a two-stage stochastic optimisation model is developed to determine the cost-efficient dispatch for an integrated day-ahead and balancing electricity market. For the market integration of the energy island, we align our approach to the current debate and compare the case of a single offshore bidding zone to a case where the energy island is integrated into a home market zone. We find that electrolysers on energy islands will run at low capacity factors and provide flexibility in 29-36% of their run time. In addition, offshore electrolysers produce more hydrogen when they are allocated to an offshore bidding zone, and thus earn higher profits. We conclude that combining offshore wind with electrolysers on an energy island relies on additional economic incentives if their main role is envisioned to be the delivery of balancing flexibility.