Case study of a site-specific design and operation optimization of a wind farm co-located PEM electrolyzer and BESS including degradation

Abstract. The expansion of volatile renewable energy sources leads to increased electricity price volatility and cannibalization effects, intensifying the economic pressure on project developers. Decentralized hybrid energy systems for renewable hydrogen production offer a solution to exploit these price fluctuations and counteract curtailment during hours of low or negative electricity prices. However, the design and operation of those systems are inherently coupled and significantly influenced by external factors, such as electricity and hydrogen prices that can be achieved over the lifetime. To determine an economically optimal design, specifically the power of an electrolyzers and the capacity of a battery, both site-specific and plant-specific characteristics must be considered.

First, this paper presents a methodology for determining the optimal electrolyzer rated power and lithium-ion buffer battery capacity size for a 68 MW wind farm in north-western Germany. The approach extends an existing site-specific design method by introducing a battery storage system and enhancing the electrolyzer model with part-load efficiency and operating-mode-dependent degradation. Results indicate that neglecting degradation leads to an underestimation of the levelized cost of hydrogen (LCOH) by 1.2 € kg⁻¹, corresponding 21 %, while neglecting both degradation and part-load efficiency increases this underestimation to 35 %. Concurrently, the inclusion of the battery energy storage system (BESS) can reduce electrolyzer degradation by more than one-third and increase the annual operational profit by 5 %, while it leads to a marginal LCOH increase of 1 % due to higher capital expenditures. For the design phase, a price-independent operational strategy aiming to maximizing renewable hydrogen yield was implemented, representing a necessary simplification.

This operational assumption within the design phase was validated in a second step through a mixed-integer linear (MIL) operational optimization. This assessment reveals two key findings: Firstly, the assumption of a constant archivable electricity price over the systems lifetime leads to a 23 % overestimation of annual operational profits when compared to the more realistic electricity sales at the German day-ahead market in 2024. Secondly, the operation heuristic of the design method demonstrates high economic competitiveness, deviating by only 4.5 % from the theoretical MIL optimum even under reduced hydrogen pricing. Nevertheless, this performance may be site-specific, as integrated optimization may yield significantly higher added value in markets characterized by greater price volatility or different meteorological profiles. Beyond these specific results, the model showcases the critical importance of integrating high-fidelity physical effects for electrolyzer models, alongside the strategic inclusion of battery storage. Furthermore, it demonstrates that a rigorous consideration of the operational strategy is necessary for a robust and reliable system assessment to account for volatile external factors. Overall, the proposed method provides wind farm developers with a tool to evaluate and optimize site-specific wind-hydrogen-battery systems to derive well-founded strategic investment decisions.