I presented my paper; A Financial Worksheet For Computing the Levelized Cost of Wind Electricity (US$/MWh, €/MWh) Stored in a Hydrogen Storage System, at the American Wind Energy Association’s WIND 2003 Convention, May 18-21, 2003, in Austin, TX.

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I am a fee based consulting energy economist in private practice.

ABSTRACT FOR WINDPOWER 2003 PAPER

Wind is an intermittent source of electricity. If, in the future, wind electricity could be economically stored, it would increase the market value of the wind electricity. This increase in the market value of wind energy could be realized in:
1. Capacity payments
2. No out of balance payments for the transmission of wind electricity.
3. Extra revenue earned by selling the wind electricity at the premium price in a time of day pricing tariff.

In the electric energy storage cycle, a Hydrogen Storage System (HSS) must first use the wind electricity to produce hydrogen in order to charge (fill) the hydrogen storage facility, second, store the hydrogen until the energy is needed and third, discharge (empty the hydrogen from the storage facility) and convert it back into electricity for sale to the grid. This paper presents a worksheet that computes the levelized cost of stored wind energy (US$/MWh, €/MWh). The paper compares the cost of the stored wind electricity with the premium price of electricity in a time of day pricing tariff.

This paper discusses the technical, financial and economic principles underlying the levelized cost method of computing the cost of wind electricity stored in a HSS. Topics include the electric energy storage cycle (charging, storage, discharge), hydrogen storage verse pumped storage (and verse other future electric storage technologies), the levelized cost method, storage cycle efficiency, depreciation, cost of capital, fixed and variable operating and maintenance costs.

The paper includes the worksheet, "Levelized Cost of Wind Electricity Stored in a 1 MW Hydrogen Storage System". Its benchmark values are for a US model plant located in Colorado. The worksheet converts the benchmark US$ values into € values.

The paper discusses these benchmark values as it analyzes the worksheet’s;
1. Constant, a HSS with a 1 MW rating;
2. Independent variables, electricity spot price-US$/MWh, electricity time of day premium spot price-US$/MWh, cost of wind electricity for charging (filling) the HSS-US$/MWh, number of storage cycles per year, discharge time per cycle-%, storage cycle efficiency, number of MWh stored, capital cost of HSS-$/MWh, cost of capital-%, physical life-yr, fixed and variable O & M  expense, €/US$;
3.  Dependent variable, levelized cost (US$/MWh, €/MWh) of wind electricity stored.

The reader can use the worksheet to do their own computation of the levelized cost of stored wind electricity. The worksheet allows the reader to use their own values for the independent variables. The worksheet also allows the reader to convert the US$ values into € values at the reader determined exchange rate (€/US$). The worksheet HSS is rated at 1 MW, but the reader can scale up the system. The reader can use the worksheet to compare the levelized cost of hydrogen-storage electricity with the levelized cost of pumped-storage electricity (and with the levelized cost of other future electric storage technologies).