Energy Economics

Read some of our latest publications on energy economics, mostly focused on hydrogen:

Li, X., & Mulder, M. (2021), Value of power-to-gas as a flexibility option in integrated electricity and hydrogen markets. Applied Energy, 304, 117863.
Policy Paper 9. (2021), Giving hydrogen a jump start; lessons learned from Dutch policies in other industries
Policy Paper 5. (2019), Outlook for a Dutch hydrogen market. Economic conditions and scenarios
CERRE report. (2019), Future markets for renewable gases and hydrogen: what would be the optimal regulatory provisions?
van Leeuwen, C., & Mulder, M. (2018). Power-to-gas in electricity markets dominated by renewables. Applied Energy, 232, 258-272. https://doi.org/(...)apenergy.2018.09.217
Mulder, M., & Perey, P. (2019). Groene waterstof laat zich lastig rendabel maken. ESB Economisch Statistische Berichten, 2019.

In the Climate Agreement, hydrogen plays an important role in the efforts to make the heat supply, transport and industrial processes more sustainable. After all, hydrogen is a clean source of energy that is also easy to store. This makes hydrogen potentially an ideal solution for mitigating the variability of electricity production from renewable sources such as wind turbines and solar panels. This is the so-called timing flexibility of hydrogen. In addition, hydrogen may also offer so-called end-use flexibility by enabling energy users, like the chemical industry, to replace fossil energy by hydrogen. Another type of flexibility of hydrogen is the so-called locational flexibility, which is that it enables green-electricity producers (e.g. wind turbines) to choose optimal production locations without taking into account the transport capacity of the electricity grid.

The technical feasibility of hydrogen has been researched thoroughly and creates high expectations, but the extent to which hydrogen will be able to meet these high expectations in the future energy transition also depends on various economic factors.

CEnBER is increasingly involved in the research in various economic factors that affect the economic potential of hydrogen. Our director, prof. Machiel Mulder, received various grants for research into the economic feasibility of the large-scale production of hydrogen using electricity and into the development of a hydrogen market. Furthermore, our centre is also closely involved in doing practical research together with external parties. This creates that the centre is now active in multiple research projects with various researchers. See the table below for a brief overview of our current research projects.

Current research projects on Economics of Hydrogen

Click on the plus sign next to the title to read more about each individual research project.

Hydrogen markets (PhD project)

This research studies the economic conditions of creating a hydrogen market by analysing both the supply and the demand side, as well as the industrial structure, of the hydrogen sector. On the supply side, we analyse the interaction between the prices of electricity, natural gas, carbon and hydrogen for various types of hydrogen production technologies. On the demand side, we analyse the willingness-to-pay for hydrogen of households, as well as industrial firms. Regarding the industrial structure, we evaluate the experiences with vertical unbundling in the electricity and gas market.

The economic value of Power-to-Gas as a source of flexibility to energy networks

The transition to more small-scale renewable power generation will cause additional stress to transmission and distribution networks. Congestion problems might appear compromising the reliable and efficient supply of electricity. The simplest solution for network congestion is network expansion; however, network expansion is capital intensive and time-consuming, not making it the best solution to deal with congestion. In recent years Power-to-Gas has gained interest as a solution to supply flexibility in future electric systems. In this line, the proposed research intends to assess the potential of P2G as a source of flexibility to avoid network congestion in future energy systems.

Value of Power-to-Gas as a flexibility option in electricity markets

We investigate the value of power-to-gas as a flexibility option in electricity markets dominated by renewables. In a stylized model, we simulate the short-term equilibria of wholesale electricity, gas, and hydrogen markets coupled by power-to-gas. By comparing the market coupling case with the benchmark case of no power-to-gas, we assess how the variance in the price duration curve reduces due to power-to-gas, which is the market value of power-to-gas as a flexibility option. In addition, we investigate how the market value of power-to-gas changes with an increase of renewables.

Low-carbon hydrogen supply in international perspective

There are numerous activities in North-west Europe regarding research and innovation in low-carbon hydrogen. The combination of the national strategies and technical possibilities for hydrogen can lead to a steep increase in low-carbon hydrogen demand in North-west Europe. Currently, hydrogen produced with renewable electricity in North-west Europe is expensive compared to alternative energy carriers. However, this could change when the low-carbon hydrogen is produced at locations with higher capacityfactors and transported to end-users. We evaluate the production and import of hydrogen from locations with favourable conditions for renewable power generation, as well as hydrogen production based on natural gas with carbon capturing technologies to determine the potential supply routes of low-carbon hydrogen.

More information

If you are interested and would like more information about the current research or potential research opportunities, please contact us:

Machiel Mulder, Professor of Energy Markets, email: machiel.mulder@rug.nl, tel.: +31 6 31035729
Evrim Ursavas, Professor of Energy Logistics, email: e.ursavas@rug.nl, tel.: +31 50 36 37086

Last modified:

02 June 2023 2.09 p.m.