Electricity system arbitrage to maximise the value of a hydrogen electrolyser: a case study of the UK

This study examines niche approaches to electrolyser integration into the electricity system. Electrolysers are directly connected to offshore wind farms to lower electricity supply costs. The system integrates onsite electricity and hydrogen storage, exporting to or importing from the grid only when prices are favourable. Electricity price arbitrage in this system could reduce the levelised cost of hydrogen (LCOH) by 17%–29% for offshore wind-powered systems without batteries, and by 1%–2% for grid-powered systems under UK electricity market prices in 2023–24. For offshore wind systems with battery storage, LCOH reductions of 1%–3% are achievable through arbitrage. Profitability also depends on electrolyser type, hydrogen demand, and structural variations in electricity pricing. These findings highlight the importance of incorporating such niche configurations into energy and electricity system models.