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

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 these 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 electrolyzer 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 for a 68 MW wind farm in northwestern Germany. The approach extends an existing site-specific design method by introducing a battery energy storage system (BESS) and enhancing the electrolyzer model with part-load efficiency and operating-mode-dependent degradation. Results indicate that neglecting degradation leads to an underestimation of levelized cost of hydrogen (LCOH) by EUR 1.2 kg −1 , corresponding to 21 %, while neglecting both degradation and part-load efficiency increases this underestimation to 35 %. Concurrently, the inclusion of the BESS can reduce electrolyzer degradation by one-fifth and increase the annual operational profit by 7 %, while the LCOH remains constant. For the design phase, a price-independent operational strategy aiming to maximize renewable hydrogen yield was implemented, representing a conservative operation simplification. In a second step, this operational assumption within the design phase was compared to a mixed-integer linear (MIL) operational optimization. This assessment reveals two key findings: firstly, the assumption of a constant achievable electricity price over the system's lifetime leads to a 23 % overestimation of annual operational profits when compared to the more realistic electricity sales on the German day-ahead market in 2024. Secondly, the operation heuristic of the design method demonstrates high economic competitiveness, deviating by only 2 %. However, reducing the hydrogen price considerably increases this deviation, highlighting the strong price-dependence of the operation strategy and demonstrating that the determined operation assumptions within the design method significantly underestimate potential profits under altered price conditions. 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 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 strategic investment decisions.